Order review/release in the absence of adherence to formal scheduling policies

Abstract

AbstractIn many plants, the performance of shop floor workers is measured by accounting‐based productivity criteria. Such systems encourage workers to maximize their individual performance, often at the expense of total shop performance. One such company, Union Switch & Signal, a manufacturer of railroad equipment, has decided to increase finished goods inventory in an effort to counteract poor due date performance. Management at Union Switch & Signal feel that workers not following priorities contribute significantly to this poor performance. It has been suggested that the controlled release of jobs into the shop, i.e., Order Review/Release (ORR), may provide the operations manager a vehicle for enforcing job priorities when formal dispatching rules are not strictly followed by workers. In this study, two ORR methodologies are studied in regards to their ability to offset the dysfunctional behavior by workers who seek to maximize their own individual productivity. This type of behavior was captured by simulating the phenomenon of ‘cherry picking’. Cherry picking occurs when a job is selected for processing based not on its formal priority but on the difference in standard allowable processing time and actual processing time. Results suggest that at least one ORR methodology is able to reduce the difference in resulting labor productivity while improving overall shop performance.