Push planning causes inventories to build in
a make-to-stock environment. A different sequence will cause the
first scheduled product (A) to carry additional inventory for
the length of the second scheduled product's (B) campaign.
Therefore, enough A must be made to satisfy demand for the full
length of B's campaign. If five products are cycled through the
same equipment, now the inventory is going up geometrically
for A, B, C and D. Some questions jump out. Is there enough
storage for this much A? What is the value of A versus the other
products? Is there a shelf life problem? How good was the
forecast as far out as A was made? These questions will impact
the sequence picked for the schedule and the size of the
campaigns for all affected products.
The challenge of scheduling has to do with
satisfying multiple objectives simultaneously. Customer demand
was the first. The second is physical capability, having enough
capacity. Every time equipment is changed over from one product
to another, capacity is lost. This is in conflict with the
inventory scenario just discussed. Inventory consideration
promotes more, smaller campaigns.
Scheduling is directly impacting fixed and
working capital. Combined with its potential affect on
customer service, quality scheduling is critical to your
business. Hopefully the point has been made about how important
finite scheduling is and its strategic position with respect to
MRP II and JIT. In other words, no matter how advanced those MRP
programs are in your organizations, finite scheduling is a
long-term part of that picture. The last segment to discuss is
how to get control over scheduling.
It is not enough to talk about the
decision-making process or what the schedule should be without
understanding what is driving the process. Understanding demand
is as tricky as the sequencing question, but must be put under
control to get scheduling under control.
Demand is an ambiguous word. In a
make-to-order business, demand is simply customers' orders that
have been booked. The schedule is then driven by backlog.
The process industry is not so simple. It
assumes that its business is make-to-stock. This type of
business must schedule its production by forecasts.
Production must be started before all the
orders are available. As the process industry goes toward more
diversity and specialty markets, it can no longer afford to make
all of its products in a make-to-stock mode, however, some
portion of manufacturing will still need to be started before
the orders are available.
Picking orders over forecast to drive
production is not a freewill choice, if you will pardon my
regression into an old philosophical predilection. It is
dependent on the responsiveness of the supply chain and customer
service expectations. Let's assume it takes one day to package
and four days to make the unpackaged product. If the customer is
willing to wait five days—no problem. One day, you must
forecast the generic product and the last step is order driven.
This is the classic Make-to-Assemble environment.
To be Continued
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