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Lean Manufacturing Articles

4. FORECAST CONSUMPTION

 

In most of today's master scheduling systems, demands consume forecasts over a period of time. Since they are usually the result of monthly plans broken into daily or weekly increments, it is important to avoid reacting when short-term demands do not exactly match these incremental forecasts. Forecast consumption serves the purpose of stabilizing master schedules by assuming that forecasts are more likely to be accurate over a month or two rather than on a specific day or in a specific week.

Problem

 

Most software consumes all items over a globally st forecast interval. There is no allowance for different items' forecasts to be consumed over different periods of time. Some items may have better accuracy over a one-month interval and others over a two-month period. In some cases demands that exceed the forecasts are con­sumed into the future, but demands that are below the forecasts are dropped immediately.

Implications

 

The basic idea is to ensure that forecasts are consumed over the period of time that represents the most accu­rate forecast even though the master schedules may be scheduled to a precise date. If this does not happen, the demand will change too frequently and, in turn, drive excessive master schedule changes. Consumption rules should work in both undersell and oversell conditions because push out reschedules are not necessarily less costly than pull-ups.

Solution

The interval for forecast consumption should be set by item rather than globally. Forecast accuracy should be measured for each item at one-, two-, and three-month intervals to determine which yields the highest levels of accuracy. System logic should be set up to consume both over and undersell conditions over this interval.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 14


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