Manufacturing is inherently a dynamic and ever-changing field. No­where is this more evident than in the area of delivering products and services (DP&S), one of the major areas of study within the APICS CIRM program. In the last five years, this area, which focuses on the planning, execution, delivery, and monitoring activities of the firm, has experienced a transformation. How we carry out these activities has been significantly influenced by such developments and trends as the increasing importance of supply chains (and their management), the emergence of enterprise resources planning (ERP), changes in the approaches being used for planning and scheduling production, the increasing awareness of a process view of the firm and its activities, and the expanding importance of metrics. In this presentation, the lis­tener will be introduced to these and other developments. The listener will see how these developments and trends are creating new opportu­nities and challenges for the production and inventory control man­ager. If we are to rise to the demands of these new developments, a new way of approaching the tasking of scheduling, planning, imple­menting, and monitoring execution has to be introduced. The presenta­tion shows that the key to this new paradigm lies in a value-driven, process-based, integrative framework and thinking process.

The presentation focuses on the following six developments in its presentation:

• metrics (what they are, why they are important, types of metrics, and their role in the process of delivering products and services)
• global manufacturing (what it entails, why it is important, and its impact)
• supply chain management, with specific emphasis on both the up­stream and downstream supply chains and the impact of such new developments as efficient consumer replenishment (ECR) and col­laborative planning and forecasting replenishment (CPFR)
• information technology (with specific attention to ERP)
• time-compression strategies (with specific focus on kaizen events)
• process view of delivery.

THE MANUFACTURING PARADOX

A useful way of understanding the need for this presentation is to be­gin with a fundamental paradox that every manager, irrespective of position, must deal with. This is the manufacturing paradox that states that "manufacturing must manage for stability, yet plan for change." What this paradox implies is that while we try to ensure that there is adequate stability in the short term so that we can effectively plan and efficiently schedule production, we must recognize that any system or development that we are currently using (and that we consider to be leading-edge) will eventually become obsolete. As a result, we must continuously plan for the replacement of these systems and develop­ments. One way of identifying the innovations that will begin to shape the future form of the integrated enterprise is to identify those new developments currently generating interest in industry. That is the fo­cus of this presentation.

IDENTIFYING THE THREE MAJOR ACTIVITIES OF THE ENTERPRISE

Within the firm, there are certain core activities. These activities are the ones that significantly contribute to the revenue streams required by the firm for its growth and survival. In most firms, these core activi­ties can be found within three systems: (1) the design system, (2) the planning/scheduling/execution system, and (3) the performance mea­surement/feedback system.

The design system. This is the system that is responsible for all design (initial and revision) activities. This system deals with two cat­egories of design activities: (1) product design and development and (2) process design and development.

The planning/scheduling/execution system. This system is respon­sible for transforming the broad-based plans that reflect corporate ob­jectives into focused and feasible operational plans and schedules that are ultimately released to the shop floor for execution. It is in this sys­tem that we encounter the familiar production plan, master schedule, materials planning, capacity planning, and shop floor control.

The performance measurement system. This system focuses on performance measurement. It is here that performance is monitored, summarized, reported, and tracked. Performance measurement is im­portant because it focuses the attention of the users on those activities considered critical by the firm.

Of these three core systems, the performance measurement system is the one that has received the least amount of attention. However, increasingly we are beginning to see the greatest amount of manage­ment attention in this area. One reason can be traced to the need to show that activities being implemented on the organizational level within DP&S are positively affecting corporate performance. To show this impact, we must understand metrics and be able to make use of them. In short, to survive in the new integrated enterprise, you must be a master of metrics.

To Be Continued

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Lean Manufacturing Articles and go to Series 1