A SCHEDULING
MODEL NEEDS TO BE
DEVELOPED
The ABC classification will then be used to build a model
for manufacturing and purchasing. The result will be
sound purchasing, manufacturing,
and inventory strategies—all
synchronized.
A form of mixed-model scheduling
will, then, become your
company's purchasing and shop
loading strategy. (See Figure 4.)
It is imperative that each day
or week a certain mix of product
is introduced to the factory floor.
This is a modified version of
mixed-model scheduling. As its
name implies, its purpose is to
stabilize the factory by defining
a run order
launching mix. For example, each mix
MIGHT include:
a.
Daily line rate for each
production area.
b.
Daily labor hours rate.
c.
Certain mix of A, B, and C
items to control the num
ber of setups and/or
line start-ups.
d.
Certain mix of product
families by forecast percent
to assure high
customer service to various product
lines or market
segments.(A-D
are examples of business rules.)
These
strategies must be rethought, at least quarterly, to allow for
seasonality or changing marketplace conditions.
This modified
scheduling process may look confusing
and difficult—IT
IS! But every effort must be made
to bring a
sense of flow and stability to the entire supply
chain. Formal education will be needed to fully understand
this concept.
SAFETY STOCK PLANNING
Most
companies have safety stock; few have safety-stock
policies. A
formal safety-stock philosophy is needed for
all major
components and product lines. Safety stock
should be
primarily established based on customer demand
instability as well as purchasing and manufacturing
reliability and response times.
An example of
safety stock business rules follow:
•
A items: 2 weeks safety stock
•
B items: 4-6
weeks safety stock
•
C items: 10
plus weeks safety stock
With this logic, a
company's safety stock would easily
turn 15 to 20 times per year.
Remember: C items
are only a small portion of your
dollar inventory. If you
manufacture a 20-week supply of C items, your average C
items inventory is approximately 10 weeks. A 10-week supply of
an item, which only
represents 5 percent of your dollars, has almost no
impact on inventory turns or
investment.
In addition to
the typical mathematical
approaches to setting safety
stock, the
following factors should be
considered
when setting level of safety stock (to manually adjust the
quantity):
•
Inventory
class (ABC) of parent
items
•
Criticality of end use (will this shut
down a customer job site)
•
Location of
customer (distance)
•
Ease of
manufacturing to produce
•
Warehouse space
•
Safety/hazardous material
•
Design of the
product life
•
Spare parts
usage (warranty work or
repair).