you ever heard the old saying “The devil is in the details”?
When it comes to managing production, inventory, capacity and the flow of
work in a modern supply chain, nothing could be more true.
if you’ve done a great job of balancing supply and demand in aggregate …
even if you have enough capacity i
total based on anticipated production volumes … even if there’s plenty of
inventory in aggregate to satisfy expected demand … the devil is in the
all these cases, managing the details – knowing which products to make, and
which specific ones to make first and which second and which third, and how much
of each should be produced to satisfy demand and also promote maximum flow –
is a function of your master production scheduling process.
Do a poor job of creating a leveled MPS where supply and demand is in
balance, and a poor job of managing it in the face of change, very likely
you’ll see one or more of the following:
double whammy: excess inventory
and poor customer service.
problems – overloaded or front-loaded capacity plans (in spite of what was
agreed in the S&OP process).
numbers of past due orders.
lots of expediting.
numbers of action messages – many of which may be “unactionable”.
“churning” of the schedule as customers jostle with each other for
user confidence in the system and lots of second guessing of the schedules
and work authorizations.
informal system creeping back to try to answer the question – “what do
we need and when do we really need it?”
course, no one sets out to do a poor job of master scheduling.
But lots of excuses and half-truths later – “we’re made to order
and don’t need all that master scheduling stuff”, “we’ve become a lean
manufacturer and lean precludes it”, “we have too much change and it’s too
much work”, “we have a lousy forecast (or erratic customer schedules) so we
can’t do master scheduling” – and suddenly the MPS is missing in action.
really owe it to yourself to do have a professional master scheduling process
that is synchronized with your aggregate planning processes (S&OP and rough
cut). Do it well, do it often
enough, do it completely, and within the context of effective aggregate S&OP
and you will typically lower inventory and simultaneously increase customer
service, create smooth workflows and predictable use of capacity, establish
smooth and predictable transitions from one product to the next to the next,
improve on-time performance and eliminate past due work and the constant
expediting that goes with it, reduce the number of customer complaints (and the
factory churning that often goes with them), and establish a single system that
will answer the question “what do we really need first, second, third … and
when do we really need them”.
a good job of creating and managing the master production schedule – in the
details – and you really will have gone a long way toward exorcising the
demons that make supply chain management so challenging.
Chris Gray is the president of Gray Research and
can be reached at cgr...@grayresearch.com
. Over the last twenty years, he's
helped more companies sort out manufacturing and distribution software issues
than any other individual in the field and has authored three books on this
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assembling or finishing products to order from options. Featuring
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