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Master Production Schedule

Part 2 of 4


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Overloaded Master Schedule

Some companies are always behind schedule. It seems that these companies never can build a product on time or even worse, cannot ship the product on time and as promised. If one thinks that Friday afternoons are bad, Monday morn­ings are worse. The job of master scheduling and manufac­turing is hard enough just dealing with the current week's expected production. When the work not completed the prior week is added to the current work load, it soon becomes an overloaded condition.

There is an important principle here: time that passes is gone forever. The inexperienced master scheduler may have the past due load remain past due or simply move it to the current period. Although the second solution seems to be better (it should be against the law to allow the master schedule to go past due), it still leaves much to be desired. What now exists is a master schedule that cannot be met.

Several problems surface when the master schedule is overloaded. Production inefficiencies become the norm; poorly timed line changes occur; downtime due to material shortages are common; stress is everywhere; mixed prior­ity signals are sent to production; product is not shipped as promised; partially built product remains in work-in-process; financial problems occur daily. But that's not all! The list continues.

As costs are being driven higher through overtime, expedit­ing, and air freight, compensations are being made to irate customers. The planning and control system is probably in shambles, budgets are a joke, confusion is in the minds of everyone, coordination issues run throughout the plant, capacity problems are not solved, quality goes down, etc.

This environment tends to lead to false forecasts which are based on bias as well as false order placing (asking for more than what is needed and asking for it earlier than is needed). Sales, marketing, and management in general discount production capabilities and fall into the trap of overloading the master schedule. This is a natural re­sponse to lack of performance. Fortunately or unfortu­nately, the master scheduler also knows the game that's being played. The issue here is that the game is being played for some pretty high stakes.
Management must create an environment of honesty about the numbers. Sales and manufacturing must form partner­ships if the company is ever to get out of the overloaded master schedule. The fear of being wrong or making a mistake must be removed if the "blame game" is to be buried.
* Actual Demand Falls Short of Forecast

Someone once said, "those who tell, don't know and those who know, don't tell." When expected sales are forecasted, people jump into action. The master scheduler creates a schedule that triggers material purchases. That schedule also triggers manufacturing to commence building compo­nents, engineering to work on new designs, and finance to look into securing the required money to pay for all this activity. What's then needed are customer orders! What

When this starts happening, several events occur. Market­ing starts to wonder why the forecast was so far off. Sales management begins to panic and thoughts turn to "let's make a deal." Manufacturing also moves into action. Some­times the master scheduler looks for work to pull up to take care of some idle capacity. This may be okay for the current period, but what about the periods that follow. The opti­mist may continue to build product in the hopes that orders will materialize. The pessimist may start to immediately reduce capacity by laying off people prematurely.

The pragmatist looks at all the available alternatives. Maybe the right thing to do is to build some sets of common parts. Some of the material scheduled may be able to be rescheduled to a later date. Looking at the manufacturing resources available, maybe some of the people can be redeployed to other useful work. Of course, this requires flexibility in the hands of the master scheduler.

Another key point is for the company to decide whether it wants to "sell what's made" or "make what's sold." Produc­tion oriented companies work technical capabilities, slow production down, but rarely stop, and invest in sales/ marketing tool sets (price flexibility, attractive financing, warrantee extensions) while sales/marketing oriented com­panies answer brisk sales with a "yes" production response (you've done it before attitude); if sales are off, production reduces accordingly. These sales driven companies are generally not in the business to push predefined products...

To be Continued

For balance of this article, click on the below link:
Lean Manufacturing Articles and go to Series 02


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