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Most understand the idea that there is not a "perfect forecast." Yet
many use this as an excuse to accept the current level of forecast
accuracy. It is important to realize that small increases in
forecast accuracy can significantly stabilize schedule changes and
reduce inventory in the entire supply chain.
An important technique to help stabilize the Master Production Schedule is to establish and maintain time fence policies. Gaining control by using time fences can be a very helpful tactic but their effective use requires the cooperation of Top Management to enforce them. The first time fence is the cumulative lead time of the Master Production Schedule products. This establishes the minimum planning horizon. In most situations the planning horizon will extend beyond the cumulative lead time to give greater visibility to plan long lead time items. The manufacturing orders that fall inside the cumulative lead time should be scheduled receipts or firm planned. It is critical that the master scheduler controls the plan inside the cumulative lead time fence.
Other important time fences are the firm, mix, and rate fences that should control the changes to the Master Production Schedule. Changes outside the cumulative lead time generally cause few problems and have little impact on costs. Inside the cumulative lead time it is important to set the rate of production based on the commitments for raw materials. The decision made at this critical point should control the total volume of production. Once raw materials are converted into specific items and assemblies, the mix of different products that can be produced gets smaller. Frequently different styles, colors and special labeling will limit flexibility of what finished products can be made. Finally, usually near the end of the manufacturing cycle, the schedule should be firm and change only with Top Management's approval. Changes made within these fences add more cost the closer the item is to being completed. When changes are necessary, it is important that management knows the cost impact of these decisions.
Feasibility: One "golden rule" of Master Scheduling is that it should always be realistic. Simply put, this means that when something gets scheduled there should be a very good possibility that the materials and capacity will be available. A bottleneck that is several levels deep in the product structure can control the production flow through all down stream (toward the end item) operations and stages of production. This is frequently a very difficult situation to coordinate.
Material Requirements Planning is a backward scheduling procedure driven by the need date of a component's parent item. Additionally Material Requirements Planning assumes that infinite capacity is available to convert components into subassemblies. The traditional Manufacturing Resource Planning approach is to provide a Rough Cut Capacity Plan that suggests the load condition in critical work centers. Armed with this "rough cut" information, the master scheduler is to rearrange the Master Production Schedule for the products creating the overload condition. This can be an extremely difficult task. Especially when the items need to be master scheduled in the future and the capacity problem is near term and several levels down in the product structure.
There are tactical initiatives like Finite Forward Scheduling that can help synchronize scheduling. Yet the fact remains that most companies do not have Master Scheduling in place thereby rendering the use of Finite Forward Scheduling inoperative.
To be Continued
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