Who owns your production schedule?
by Blair Bass
Practice Leader at Charles Aris Inc.
We just spent several hundreds of thousands, if not millions, of dollars implementing our new Enterprise Resource Planning (ERP) system. We paid consultants to come in to help us setup Sales & Operations Planning (S&OP) groups. We have master schedulers, forecasters, production planners, etc., all forecasting, building, analyzing and executing our daily production plan. Why do we still end up with fire drills, shortages and missed delivery dates?
With all of this new technology and planning in place, who in your organization really owns your production schedule?
The frozen period
The frozen period of production planning is simply the length of time when recovery to changes in the production schedule is not possible due to the lead time of purchased or manufactured items. The frozen period could be different for every company, and within a company it could be different for different items. But when companies do not set and control interruptions to their frozen periods, they will at some point find themselves in a fire drill, material shortage or delivery delay.
A common example: The production plan is set for the next three weeks and we have all of the material needed to get the orders out to meet the delivery dates for these next three weeks. Our most productive salesperson comes in with an order that is urgent and must be shipped next week. But this order requires all of Part A, which is also needed to complete the previously planned orders in our frozen three-week period. The salesperson is successful in convincing the production manager to get his order run now to keep his customer happy, but now we do not have any of Part A left and the other orders are going to miss their delivery dates.
Because the company lacks strict rules and controls on the frozen period, this one salesperson controlled the production schedule – not the production planning design.
Borrow / trade
Consider this: I am a front-line worker out on a typical production floor. I am under pressure to complete my step in the process and have been getting yelled at a lot lately because I have been late or underproducing. To keep from being yelled at again, I want to make some common parts just to get my production numbers up even though I do not have a defined order to work on right now. Problem is: I do not have all the parts I need to build this common item.
Looking around, I see that one of my friends on the line next to me has a box of the raw parts I need. I ask him to let me “borrow” his parts and tell him I will return his parts to him when my order comes in next week. He reluctantly agrees.
There is probably a production planning reason that I did not have these raw parts yet – and why my buddy on the other line did have the raw material. But without understanding this, I just took over the production plan. By not following strict processes controlling a situation like this, I am now in control of your production plan, all from the front line.
Two of the most common issues I continue to come across when visiting and touring a manufacturing facility is finding Work In Process (WIP) inventory lying around the factory floor or finding an uncontrolled stockroom. When either of these instances is present in a company, any factory worker can grab whatever material they believe they need and begin working on it, regardless of which customer orders that material is in process or in stock for at this time. Simply put: In situations like this, everyone – and therefore no one – has control of the production plan.
All of the best production planning technology and production planning design will not overcome deficiencies in basic policies, processes and controls in our production environment.
If your company is continually in a fire drill, continually trying to recover from product shortages, and continually missing promised delivery dates, it is probably time to review your entire production process to understand who controls your production schedule – the leaders who should control your production schedule or unknown influences impacting, changing or even taking control of your production schedule?
"Thanks, Charles Aris, appreciate your dedication in finding such great talent for us to select from."
— The VP of Strategic Product Management for a Fortune 30 retailer, responding to an email informing him that Charles Aris Inc.'s candidate had just accepted the retailer's job offer.