Assessing the impact of reducing demand variance through improved planning on the performance of a dual resource constrained job shop

This paper examines the role that both the planning and shop floor control systems play in the operation and performance of a dual resource constrained (DRC) job shop. Using causal analysis, the results show an effective planning system, as it accounts for the largest gain in shop performance. Generating and releasing smoothed schedules (work loads) allows the use of simplified shop floor control procedures such as Order Review/Release (ORR), job dispatching and labor assignment rules without adversely affecting performance. This study uses the results to resolve the current paradox surrounding ORR systems and shows that the ORR rules’ performance is strongly dependent on the planning system, and that ORR rules can be considered moderating variables. Further, the study develops a variance control framework that indicates the necessary managerial actions to improve shop performance. This paper demonstrates that the planning system, not the shop floor control system, is the major determinant of shop performance. By making improvements to the planning system, the shop can use simple ORR rules, job dispatching and labour assignment procedures to control the flow of work without adversely impacting shop performance. These findings will help guide managerial investments in planning and shop floor control systems.