In our need to become increasingly competitive, we have
come to recognize that planning for the future is a non-precise
science. The only thing about the future that is certain is that the
future will never be what we think it
will be. Being competitive in the 21st century means not
high quality (conformance) and low cost,
but also having quick response
and flexibility. No longer
can we compete by focusing on
only one or two of these—
we must have all three—quality, cost, and response.
In other words, remaining competitive means muting
the traditional tradeoffs between cost, quality (conformance) and
response (flexibility). We must achieve
excellence in all three—without tradeoff. This can be seen
In our quest to become more effective in this pursuit,
Deming and others taught us through Total Quality Management
(TQM) that cost and quality are not opposing.
Rather, the identification and elimination of the cause of
variability (non-conformance) is to experience a double-edged
competitive advantage—lower cost and higher conformance
(quality). You can't get one without the other.
Similarly with inventory and customer service, we have
learned (through MRP, MRP II, JIT, ERP, Agility) that
producing more inventory (what the customers don't
want) does not necessarily bring about an increase in service.
It's only when we develop the ability to produce what
the customers want that service improves. When you do this, not only
does service improve, but inventory is reduced
as well. Again, a double-edged sword.
ever-increasing demands of the marketplace
have become more and more
difficult to achieve, we've had to get simpler and simpler in
order to remain competitive.
We've gotten rid of large amounts of non-value-adding
activity, eliminating cost and shortening cycle time. This got us
more responsive, making it possible to pursue the following
Today's point of demand becomes
Tonight's production and
MANAGING THE MPS
While we can never fully achieve this model, we must be
ever mindful of the direction it provides. Relative toproper
management of the MPS, what it has done is to
substantively reduce the length of the Critical Time
for many products. This means that the
horizon of the MPS
can often be significantly reduced,
enabling it possible to change,
simplify, and improve
the way in which we manage the MPS.
As the CTF shortens, we'd be well served to
do all of our forecasting and planning in quadrant II
and IV. We are beginning to see major strides in this
direction: Through rough-cut planning, driven by
S&OP, all capacity
and material resources can often be
properly planned to allow short-term response to customers'
needs. We then, through collaborative planning
and forecast review
(CPFR), blur the boundaries with
our customers, getting information about their specific
scheduled and anticipated needs.
All of this is changing the way in which the master scheduler
does his/her job. It, at very least, diminishes the
amount of non-value-adding detail that needs to be
managed by the MPS
process. Additionally, the role of
the master scheduler is becoming
more significant in its contribution to the interface between
S&OP and the MPS practices. As we become more and more responsive
with resources, this practice will continue to evolve.