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Lean Manufacturing Articles

MEASURING THE RIGHT THING

It really doesn't matter which of many measurements you use; the most important thing is improvement to the measurement. It also matters a great deal what you do with what you've learned from the measurement.

Aggregate measures are useful for SOP feedback and higher-level decisions, such as changes to the MPS, cut­ting back on overtime, or the need to outsource. But, they can be misleading and mask problems. Consider a product group of only two items, with a forecast of 100 of each, for an aggregate of 200. If you get orders for SO or one, and 150 of the other, for an aggregate of 200, your aggregate accuracy is 100 percent. But you've got an overstock of SO of one, and a backorder of 50 on the other. So do not be lulled into a potentially false sense of security if your aggregate looks great. And please re­member that your customers don't care how accurate your aggregate is—they want specific items.

Item measurements are the richest ground for im­provements and elimination of waste. You can take a simple step starting with your very next exception re­port that will save you time and improve accuracy. As you work it, note how many of each exception there are of each type, and how many of each actually caused you to take action. Do this for three months and notice if there are exception types that rarely prompted action. There likely will be, so turn them off! You'll save quite a bit of review time. And, with the time you save, you can tighten another parameter that does prompt a lot of action. You'll get done in the same amount of time, but you'll be preventing even more errors from being passed to execution!

 

Looking for a pattern in the exceptions can also tell you if there are opportunities for improvement by mak­ing adjustments to the system itself, so that it does bet­ter work, and you do less. Not responding to trend changes rapidly enough, doing a poor job with seasonal items, or falsely modifying demands that aren't unusual are problems that can generally be fixed with a minor change to your control file or system parameters, like adjusting seasonal indicators or using a greater alpha range. After the system is tweaked, you'll have fewer ex­ceptions, be able to tighten another useful parameter, and end up with even more accuracy.

To Be Continued

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

Lean Manufacturing Articles and click on Series 15


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