Order and Forecast Reconciliation
If it is assumed that scheduling is forecast
driven then the question is—when is the forecast changed? The
temptation is to monitor the orders and react immediately to
orders exceeding forecasts and slowly to orders below forecasts.
There needs to be a conscientious game plan on how to react to
these situations—how long to stay the course and how much to
change when it's time.
The slower the supply chain, the less a
business is able to react to changing market situations. But
let's also flip this around. A car can also be overdriven. Speed
up—slow down—speed up— slow down. Similarly, quality can
often suffer from changing rates too often. There is no point in
reacting faster than the system allows you to. Compromise is the
key until the JIT effort solves this problem.
Assume we have massaged all this and the
manufacturing plant now trusts the demands placed on it.
Basically the demand pattern is controlled and the process is
demand driven. The first objective has been reached. This would
be equivalent to a single in a baseball game.
A few constraints that cause push planning
are production capacity, labor, limited raw material
availability and storage. Only two will be discussed to make the
points on how to manage constraints. With a little latitude on
the English language, we will call the process of leveling constraints
feasibilizing the schedule.
The first constraint is production capacity.
Leveling this constraint means sequencing the order of products
made, changing the start date of the campaigns and their sizes,
effectively changing the number of required changeovers.
Raw Material Availability
Raw materials may only be available at
certain times and/or only at a fixed maximum rate. This will
cause the scheduling to sequence the order of products made,
change the start date of the campaigns and their sizes, and
cause adjustments to the rate in which product can be made.
These two constraints illustrate that
different scheduling parameters are used to feasibilize the
schedule depending on the cause of the constraint. Other
constraints will similarly require their own set of parameters.
Feasibilizing the short term is a double. Feasibilizing the
short and long term is a triple.
Optimize Costs and Profitability
The scheduling job could stop after
satisfying demand and feasibilizing the schedule, against the
constraints, and often does. Just doing these two steps does as
much to improve customer service as carrying more inventory. But
neither insures profitability. Scheduling has a direct affect
Block-operating equipment means changing it
over when switching from one product to another. Lost capacity
is a hidden cost especially if more is needed and it is
contracted or additional
capital is spent to achieve it. Besides
loosing capacity, every setup incrementally adds costs. Cleanout
and scrap are two big contributors plus retooling (or repiping).
The fastest growing cost area is the disposal cost of the
solvents used for cleaning the equipment.
These are significant factors to the process industry. Since
the process industry is very capital intensive, there is a
strong desire to fully utilize available capacity. This means
block-operating several products on the same equipment. The
point is, it does not come free. The "extra" cost is
the setup cost. The combination of lost capacity and setup costs
is a real motivation to minimize the number of campaigns. The
results are high inventories.
To be Continued
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