The emergence and subsequent popularization of lean has been one of the most significant developments in the history of operations management. Yet, many of lean’s production planning and control techniques – such as the use of Kanban containers for inventory control – which emphasize simplified scheduling and synchronized flow cannot be directly applied to shops that produce high-variety products, such as small and medium sized make-to-order companies.
Workload Control is a production planning and control concept designed to meet the needs of make-to-order companies.
A key challenge these companies face is striking a balance between the input rate of orders and their capacity (i.e. the output rate) to ensure that the shop remains busy while simultaneously delivering confirmed orders in a timely fashion. The key principle of Workload Control is input/output control; i.e. the actual output determines the input. This allows the work-in-process to be stabilized and reduced. Consequently, Workload Control is of special importance to small and medium sized make-to-order companies as it:
Allows lead times to be short, predictable and feasible;
Allows capacity to be controlled and used effectively;
Controls work-in-process and inventory, resulting in a lean shop floor; and,
Its core principles are simple in use and application (see Decision Support System and COBACABANA).
Workload Control supports managers to effectively use the inventory, capacity and lead time buffer through the simultaneous control of inventory, capacity and lead time, integrating production and sales into a hierarchical system of workloads. The hierarchy of workloads consists of: the shop floor workload; the planned workload; and, the total workload.
The shop floor workload, or work-in-process, is controlled through an order release mechanism, which decouples the shop floor from any higher level planning using a pre-shop pool of orders. Jobs are not release immediately once confirmed but flow into a pre-shop pool of orders from which they are released to meet due dates while maintaining work-in-process at a stable level. The planned workload consists of all accepted orders, and therefore includes both the shop floor workload and orders in the pre-shop pool. Finally, the total workload consists of all accepted orders plus a percentage of customer enquiries based on order winning history, known as the “strike rate”. The planned and total workloads are controlled through customer enquiry management.
Order release and customer enquiry management act as workload filters; they are considered complementary tools for reducing variance in the system. Customer enquiry management defines the lead time buffer and controls the incoming workload in line with available capacity. This allows order release to balance the workload on the shop floor, reducing the inventory buffer required and ensuring capacity is used effectively.
Key Definitions
Customer Enquiry Management
When a request for quotation is received, customer enquiry management matches required and available capacity over time, molding the total workload into a shape that can be produced profitably and on time (Kingsman et al., 1993; Hendry et al., 1998). Thereby, customer enquiry management affects two of the three buffers that protect throughput against variability but which must be minimized for lean operations. First, it controls the lead time buffer through its due date function. Second, it affects the safety capacity buffer by planning capacity over time. Customer enquiry management is divided into three inter-dependent parts:
Forward Scheduling (or due date setting): capacity is planned and controlled over time, determining a feasible due date.
Backward Scheduling (or assessing the feasibility of a due date): capacity is planned and controlled over time, checking the feasibility of due dates specified by the customer.
Strike Rate Analysis: using historical data, the probability of winning a tender for a specific set of outcomes is assessed.
The three parts of customer enquiry management provide a company with the necessary tools to overcome the production/sales divide. On the one hand, the sales department wants to maximize sales revenue (i.e. the strike rate) by quoting often unrealistically short due dates and prices. On the other hand, the production department pushes for a high backlog and longer lead times to create a continuous flow on the shop floor. Customer enquiry management supports management in coordinating production and sales. For example, forward/backward scheduling allows the feasibility of a set of due dates and the incurred costs to be determined at sales. The dynamic process of forward/backward scheduling and price and strike rate determination then allows a set of decision criteria – e.g. the expected profit (the mark-up multiplied by the strike rate) – to be developed to support the bidding process and maintain profitability. So, customer enquiry management acts as a first filter, which undertakes some coarse smoothing of the planned workload. This workload smoothing or load balancing over time-periods corresponds to one of the main principles of heijunka in lean operations (see e.g. Marchwinski et al., 2008) and prevents surges in work which temporarily deplete the capacity buffer and increase the work-in-process buffer. The principles of heijunka relate to the leveling of peaks and valleys in the production schedule to create stability in the workload. The creation of this stability has been argued to be the only way of realistically creating a continuous flow of work (e.g. Liker & Meier, 2006).
Order Release Control
Once an order is confirmed by the customer, it enters the planned workload and is considered for release to production. A wide range of order release rules were developed by researchers to control the release of orders to the shop floor (see e.g. Land & Gaalman, 1996 and 1998; Fredendall et al., 2010; Thürer et al., 2012). In general, an effective order release rule combines two functions that determine performance: (i) a load balancing function, so workloads are not only kept within limits or norms but are balanced across resources; and (ii) a timing function, so jobs are released in time to meet their due dates. Balancing the workload across resources through the load balancing function of order release further implements the principles of heijunka in a make-to-order company and reduces both the WIP/inventory buffer and throughput times – while it is recognized that having some inventory buffer is valuable, it must be restricted to a small, stable buffer to have a positive impact on productivity. Workload Control's release rule is designed to achieve the same leveling of workload to capacity achieved using lean tools in repetitive manufacturing (e.g. analyzing workloads with operator balance charts and takt time). However, it does this while allowing the customers of small and medium-sized make-to-order companies to obtain highly customized products. Hence, it reduces the variability of the incoming workload that results from product customization, rather than limiting variation in the product. This is in contrast to repetitive manufacturing, which typically reduces variability in product requirements.
Workload Control
Workload Control is a production planning and control concept designed to meet the needs of make-to-order companies (e.g. Zäpfel & Missbauer, 1993; Stevenson et al., 2005; Thürer et al., 2012; Thürer et al., 2013). Based on the principles of input/output control, Workload Control provides make-to-order companies with many of the benefits of lean’s production planning and control techniques by leveling demand and production over time when work is not standardized and when it is not possible to synchronize flows on the shop floor. Workload Control supports managers to effectively use the inventory, capacity and lead time buffer through the simultaneous control of inventory, capacity and lead time, integrating production and sales into a hierarchical system of workloads (see e.g. Kingsman et al., 1989). The two main control levels of Workload Control are order release and customer enquiry management which act as workload filters; they are considered complementary tools for reducing variance in the system (see e.g. Bechte, 1994; Wiendahl, 1995; Melnyk et al., 1991).