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Process Management Basics (Production Types, Scheduling, Production Control)

Production Management Operations Grade 3 生産管理オペレーション (BC検定) · ビジネス・キャリア検定 生産管理オペレーション3級 · Written by Tokutei Pass based on the official study texts; not copied verbatim.

1. Objectives of Process Management and the Production Planning & Control Cycle

"Process management" is the management activity of efficiently utilizing factory production factors—workers, machinery, and raw materials—to reliably achieve promised delivery dates and production quantities under specified quality and cost.

The main objectives of process management are summarized in four points: 1. Securing (meeting) delivery dates, 2. Shortening production lead time, 3. Reducing work-in-process (WIP) inventory between processes, and 4. Improving operating rates of equipment and workers (reducing idle and waiting time).

Process management consists of two functions: "Production Planning (scheduling, man-hour planning, etc.)," which decides in advance "when, where, what, and how much to make," and "Production Control (order release, progress control, physical inventory control, capacity control)," which directs, monitors, and adjusts production to follow the plan.

Additionally, in make-to-order production when waiting for design completion would miss the delivery date, ordering long-lead-time special materials or purchased parts in advance before final drawings are completed is called "advance ordering (Senkou Tehai)."

Key points


  • Four objectives of process management: 1. Securing delivery dates, 2. Shortening manufacturing lead time, 3. Reducing WIP inventory, 4. Improving equipment and worker operating rates.

  • Process management revolves around the cycle of "Production Planning (P)" and "Production Control (D-C-A: dispatching, progress, physical item, and spare capacity control)."

  • Procuring materials or parts with long lead times ahead of detailed design completion is called "advance ordering (Senkou Tehai)."
WordMeaning
process management
production planning and production control
work-in-process (WIP)
advance ordering / advance arrangement

2. Classification of Production Types 1 (Make-to-Stock vs. Make-to-Order, Decoupling Point)

Based on the timing of orders relative to production start, production types are divided into "Make-to-Stock (MTS)" and "Make-to-Order (MTO)." "Make-to-Stock (Mikomi Seisan)" produces goods in advance based on market demand forecasts and ships them from finished goods inventory.

Make-to-Stock (e.g., daily necessities, home appliances) offers short delivery lead times from customer order to shipment and lowers costs through planned mass production, but carries the risk of excess inventory or unsold stock if forecasts miss.

Conversely, "Make-to-Order (Juchuu Seisan)" starts design, material procurement, and manufacturing only after receiving a customer order and confirming specifications, quantity, and delivery date. While free of finished goods inventory risk, it has a long lead time from order to delivery and large load fluctuations across processes.

Another approach produces common parts or semi-finished modules by "Make-to-Stock" based on forecasts and performs final assembly or customization by "Make-to-Order (BTO)" after receiving an order; this branching point (inventory holding point) between forecast-driven and order-driven production is called the "decoupling point."

Key points


  • Make-to-Stock = producing based on demand forecasts and shipping from finished product inventory (short delivery time, but risks excess or obsolete stock).

  • Make-to-Order = starting production after customer order confirmation (no finished goods inventory, but long delivery lead time and large load fluctuations).

  • Decoupling point = the branching point in the supply chain where Make-to-Stock (semi-finished inventory) switches to Make-to-Order (final assembly).
WordMeaning
Make-to-Stock production (MTS)
Make-to-Order production (MTO)
demand forecasting
decoupling point

3. Classification of Production Types 2 (Variety-Volume, Work Flow, Line vs. Cellular Production)

By the relationship between product variety and volume, production is divided into "low-variety high-volume production" (suited to product layout / flow shop arranging dedicated machines in processing sequence) and "high-variety low-volume production" (suited to functional layout / job shop grouping general-purpose machines by type).

By the continuity of work flow, it is classified into three types: 1. "Job (individual) production" making unique products one by one per order, 2. "Lot (batch) production" producing in fixed batch sizes with setups on shared equipment, and 3. "Continuous production" running the same product nonstop over long periods.

In lot production, increasing lot size reduces setup frequency but increases inventory holding cost, whereas reducing lot size cuts inventory but increases setups; hence "Single-Minute Exchange of Die (Single Setup / SMED)"—shortening setups to under 10 minutes by converting internal setup to external setup—is vital.

Furthermore, in assembly shops, in contrast to "line production" dividing single steps along a conveyor, "cellular manufacturing (cell production)"—where one or a few multi-skilled workers assemble multiple steps to completion inside a U-shaped stall—is widely used for its flexibility toward variety/volume changes and higher worker fulfillment.

3. Classification of Production Types 2 (Variety-Volume, Work Flow, Line vs. Cellular Production)

Key points


  • Low-variety high-volume = dedicated machines, product layout (flow shop); High-variety low-volume = general-purpose machines, functional layout (job shop).

  • Classification by work flow: Individual (job) production, Lot (batch) production (involving setups), and Continuous production.

  • Cellular manufacturing (U-shaped cell line, etc.) uses multi-skilled workers handling multiple processes to flexibly accommodate high-variety low-volume demand.

  • Example: Daily operating time 24,000 sec (400 min), required output 960 units, 4 station times of 18 s, 22 s, 20 s, and 20 s (total 80 s) → Cycle time = 24,000 ÷ 960 = 25 s, Line balancing efficiency = 80 ÷ (4 × 25) × 100 = 80%
WordMeaning
low-variety high-volume vs. high-variety low-volume production
individual, lot, and continuous production
cellular manufacturing (cell production system)
multi-skilled worker (Tanoukou)
Single Setup (SMED under 10 minutes)

4. Scheduling (Master Standard Schedule, Forward/Backward Scheduling, Dispatching Rules)

"Scheduling" is divided by horizon into "master/long-term (annual to semi-annual)," "medium-term (monthly: 1–3 months)," and "short-term (weekly/daily) schedules." The standard required days combining standard processing time with inspection, transport, and delay times is called the "standard schedule (manufacturing lead time)," and serial numbers counted backward from completion are "schedule numbers."

There are two scheduling methods to set start and finish dates. "Forward scheduling" plans forward from the first process starting from the earliest possible start date (such as material arrival) to find the earliest completion date (suited for rush orders, though WIP tends to increase).

Conversely, "Backward scheduling" starts from the customer delivery date and subtracts standard lead times backward from the final process to determine the latest permissible "start deadline date," forming the basis of Just-In-Time (JIT) and MRP.

Meanwhile, priority rules that determine which waiting job to process first on the shop floor are called "dispatching rules (job sequencing rules)."

Representative rules include: 1. First-Come, First-Served (FCFS), 2. Shortest Processing Time (SPT: minimizes average flow/retention time and WIP inventory), 3. Earliest Due Date (EDD: minimizes maximum tardiness), and 4. Minimum Slack (Slack = remaining time until due date - remaining processing time).

Key points


  • Forward scheduling = calculates forward from earliest start date to find earliest completion / Backward scheduling = calculates backward from due date to find latest start date (minimizing WIP).

  • Dispatching rules: SPT (Shortest Processing Time) minimizes average retention time and WIP; EDD (Earliest Due Date) minimizes maximum delivery lateness.

  • Slack (allowance) = (Time remaining until due date) - (Remaining processing time required); smaller (or negative) slack indicates higher urgency.

  • Example: Job A has 10 days until due date and 7 days remaining processing time; Job B has 6 days remaining and 5 days processing time → Slack: A = 10 − 7 = 3 days, B = 6 − 5 = 1 day (prioritize B with minimum slack)
WordMeaning
standard schedule (manufacturing lead time)
Forward Scheduling
Backward Scheduling
dispatching rules (SPT, EDD)

5. Man-Hour (Load) Planning, Infinite/Finite Loading (Yamazumi/Yamakuzushi), and Capacity Control

Alongside scheduling, "man-hour planning (load planning)" compares the "load man-hours" (workload required to fulfill orders or production plans) against "available capacity man-hours" of shop workers and machines by period and process to balance the two.

"Load man-hours" is calculated as "Production quantity × Standard time per unit + Setup time," while "Available capacity man-hours" is calculated as "Number of workers (or machines) × Actual working hours per day × Working days × Expected operating (or efficiency) rate."

Piling up the load man-hours of each job by period onto a chart without considering capacity limits is called "infinite loading / piling up (Yamazumi method)." Leveling the peaks that exceed the available capacity line (overload) into the valleys (surplus capacity) is called "load leveling / peak shaving (Yamakuzushi method)."

When load leveling or "capacity control (Yoryoku Kanri)" reveals Load > Capacity (capacity shortage), countermeasures include: 1. Increasing capacity (overtime, holiday work, receiving support from other departments, adding shifts) and 2. Reducing or shifting load (outsourcing, pulling forward or pushing back schedules, splitting lots).

Key points


  • Load man-hours = Quantity × Unit standard time + Setup time / Spare capacity (Yoryoku) = Available capacity man-hours - Load man-hours.

  • Accumulating workload by period regardless of capacity limits is "Yamazumi (piling up)"; leveling loads that exceed the capacity line is "Yamakuzushi (load leveling)."

  • Countermeasures for capacity shortage: overtime or support workers (capacity boost); outsourcing or rescheduling earlier/later (load adjustment).

  • Example: Producing 600 units with standard time 0.5 h/unit and setup time 20 h → Load man-hours = 600 × 0.5 + 20 = 320 hours

  • Example: 5 workers × 8 actual hours/day × 10 working days × 90% expected utilization (load: 320 hours) → Available capacity man-hours = 5 × 8 × 10 × 0.9 = 360 hours, Surplus capacity = 360 − 320 = 40 hours
WordMeaning
man-hour planning (load planning)
Yamazumi (piling up) and Yamakuzushi (load leveling) methods
spare capacity control (Yoryoku Kanri)
available capacity man-hours

6. Production Control 1 (Order Release, Dispatching/Sashitate, Physical Control, Gantt Chart)

The first step of production control, "order arrangement," includes "manufacturing order release (Seisaku Tehai)" formally instructing production and purchasing departments, and "operation dispatching (Sashitate)" instructing individual workers on specific job sequences and start times based on shop progress and machine availability.

In dispatching (work allocation), vouchers such as operation instruction tickets, material issue slips, move tickets, and inspection tickets are issued and inserted into a "dispatch board (control board)" by machine and date for visual management of shop work sequences.

"Physical inventory control (Genpin Kanri)" is the activity of keeping the "actual physical goods (item name, quantity, location)" of raw materials, WIP, and finished goods flowing through the plant constantly matched with "information on slips and computers." Attaching "identification tags (Genpin-hyou)," "move tickets," or "Kanban" prevents loss and mix-ups.

Meanwhile, the "Gantt chart," widely used in "progress control," lists machines, workers, or orders on the vertical axis and time (dates) on the horizontal axis, comparing planned periods and actual progress with horizontal bars; if the actual bar ends to the left of the current check-date line, it indicates "behind schedule," and to the right, "ahead of schedule."

Key points


  • Manufacturing order release = formal production command to manufacturing/purchasing / Dispatching (Sashitate) = deciding shop-floor job sequence and issuing concrete work instructions.

  • Physical control (Genpin Kanri) = using item tags, move tickets, and Kanban to keep physical items (name, quantity, location) always matched with data.

  • Gantt chart = plots time on the horizontal axis and compares plan vs. actual with horizontal bars to visually grasp ahead/behind status.
WordMeaning
dispatching / work allocation (Sashitate)
physical item control and identification tag (Genpin-hyou)
progress control (expediting)
Gantt chart

7. Production Control 2 (Reading Cumulative Flow Curves and Calculating WIP & Retention Time)

A representative graph for quantitatively managing progress and WIP status in mass-production processes is the "Cumulative Flow Curve (Ryuudousuu Kyokusen)." With time (dates) on the horizontal axis and "cumulative quantity" on the vertical axis, it plots two lines: the "cumulative input curve" (upper line) and the "cumulative output/completion curve" (lower line).

At any given point in time (a specific date on the horizontal axis), the "vertical difference (Cumulative Input - Cumulative Output)" between the two curves represents the "work-in-process (WIP) inventory quantity" remaining in the process at that time.

Conversely, at any given cumulative quantity level, the "horizontal difference (number of days from when that cumulative quantity was input until the same cumulative quantity was output)" between the two curves represents the "average retention/flow time (transit time / manufacturing lead time)."

Therefore, a widening gap between the two curves indicates increasing WIP and lengthening lead time (worsening process stagnation), whereas closely spaced curves indicate low WIP and smooth, rapid flow.

7. Production Control 2 (Reading Cumulative Flow Curves and Calculating WIP & Retention Time)

Key points


  • A Cumulative Flow Curve plots "Time (days)" on the horizontal axis and "Cumulative quantity" on the vertical axis, showing cumulative input (top) and cumulative output (bottom).

  • "Vertical difference" between the two curves = "WIP inventory quantity (Cumulative Input - Cumulative Output)" at that point in time.

  • "Horizontal difference" between the two curves = "Average retention/transit time (lead time in days)" that items stay in the process.

  • Example: On a cumulative flow diagram, day 5 cumulative input is 500 units and cumulative output is 350 units; cumulative 350 units is reached on day 2 for input and day 5 for output → WIP inventory (vertical gap) = 500 − 350 = 150 units, Average lead time (horizontal gap) = 5 − 2 = 3 days
WordMeaning
Cumulative Flow Curve (Ryuudousuu Kyokusen)
cumulative input and cumulative output
WIP inventory quantity (vertical difference)
average retention/lead time (horizontal difference)

8. Calculating Productivity & Efficiency Indicators (Yield Rate, Work Efficiency, Operating Rate, Capacity Utilization)

Production control evaluates shop-floor efficiency using four quantitative indicators. First, "Yield rate (Budomari-ritsu %)" is the ratio of good units produced to total raw materials or parts input: "Yield Rate (%) = (Good Output Quantity ÷ Total Material Input Quantity) × 100."

When passing sequentially through multiple processes, the "overall (cumulative) yield rate" is the "product (multiplication) of each process's yield rate (Process 1 Yield × Process 2 Yield...)" (e.g., if Process 1 is 90% and Process 2 is 90%, 0.9 × 0.9 = 81%).

Second, "Work efficiency (Sagyou Nouritsu %)" shows how much work converted into standard time was accomplished relative to actual working time: "Work Efficiency (%) = (Production Quantity × Unit Standard Time) ÷ Actual Working Time × 100 = Total Standard Time ÷ Total Actual Working Time × 100."

Third, "Operating rate (worker operating rate %)" is the proportion of scheduled working hours spent in "actual working time" after subtracting non-working time such as waiting for materials, morning meetings, or equipment breakdowns: "Operating Rate (%) = Actual Working Time ÷ Scheduled Working Time × 100."

Fourth, "Capacity utilization rate (Sougyoudo %)" refers to the ratio of actual production volume to the maximum or standard production capacity of factory equipment: "Capacity Utilization (%) = Actual Production Volume ÷ Standard Production Capacity × 100."

Key points


  • Yield Rate (%) = (Good units ÷ Total input units) × 100 / Overall yield across multiple processes = product (multiplication) of individual process yields.

  • Work Efficiency (%) = (Production quantity × Unit standard time) ÷ Actual working time × 100 (Denominator is actual working time, NOT scheduled time!).

  • Operating Rate (%) = Actual working time ÷ Scheduled working time × 100 (Actual working time = Scheduled time - non-working waiting/breakdown time).

  • Example: 500 raw units input yielding 400 good units in Process 1 (Process 2 yield: 95%); actual output 400 units against standard capacity 500 units → Process 1 yield = 400 ÷ 500 × 100 = 80%, Overall yield = 0.80 × 0.95 × 100 = 76%, Capacity utilization rate = 400 ÷ 500 × 100 = 80%

  • Example: Out of 400 scheduled working minutes, 40 minutes are idle/non-working time, and 132 units with standard time 3 min/unit are produced → Actual working time = 400 − 40 = 360 min, Operating rate = 360 ÷ 400 × 100 = 90%, Work efficiency = (132 × 3) ÷ 360 × 100 = 110%
WordMeaning
yield rate (overall/cumulative yield rate)
work efficiency (Sagyou Nouritsu)
operating rate and actual working time
capacity utilization rate (Sougyoudo)

Frequently Tested Points & Memory Aids

The Cumulative Flow Curve appears on almost every exam. Watch out for trap questions that swap "Vertical difference = WIP inventory quantity (units)" with "Horizontal difference = Retention/transit time (days)," as well as table calculation problems asking for Cumulative Input minus Cumulative Output.

When calculating "Work Efficiency," a common mistake is plugging "Scheduled working time (e.g., 480 min)" directly into the denominator. Always subtract waiting and machine breakdown times first to find "Actual working time," then calculate "Total Standard Time ÷ Actual Working Time × 100."

Pair up scheduling and dispatching rules in memory: "Forward = calculate forward from earliest start date," "Backward = calculate backward from due date"; "SPT (Shortest Processing Time) = minimizes average retention time & WIP," "EDD (Earliest Due Date) = minimizes maximum delivery lateness."

Key points


  • Branching point between Make-to-Stock (forecast production) and Make-to-Order (post-order production) = Decoupling Point.

  • Forward scheduling = plans forward from startable date / Backward scheduling = calculates backward from due date to determine start deadline.

  • Dispatching rules: SPT (Shortest Processing Time) = minimum average retention time / EDD (Earliest Due Date) = minimum maximum tardiness.

  • Cumulative Flow Curve: Between cumulative input and output lines, "Vertical gap = WIP inventory," "Horizontal gap = Average retention/lead time."

  • Efficiency formulas: Work Efficiency = Total ST ÷ Actual Working Time × 100 / Operating Rate = Actual Working Time ÷ Scheduled Time × 100 / Yield = Good ÷ Input × 100.
WordMeaning
vertical gap vs. horizontal gap on a Cumulative Flow Curve
work efficiency vs. operating rate
SPT (Shortest Processing Time) and EDD (Earliest Due Date)
Yamazumi (infinite loading) and Yamakuzushi (load leveling)

Process & Schedule Control

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