Manufacturing Planning 212




In too many manufacturing environments the introduction of the computer has led to a belief that all thought-based work be somehow represented by that computer. This premise will ulti­mately lead to increased complexity and that complexity will soon creep to the Shop floor, where it is least appreciated. This "binary madness" is more the result of the system than of the people that use the system and once recognized, can be cured. In 1985 the Circuit Breaker Division of the Square D Company was doing Master Planning using an MRP system written in the 1960s, releasing and revising Shop schedules daily and generating a lot of paper every weekend through a full regenerative process of the entire item master. All of the people that worked with the system were not around when it was originally created and were well infected with the "madness." It was decided that a near-state-of-the-art planning system was needed.

The Manufacturing Environment

For the purposes of simplicity this paper/presentation will deal with only one plant, located in Cedar Rapids, Iowa. This facility manufactures the industrial versions of the breakers and has the most complex product offerings of the three plants in the division. The solutions implemented there were transferable to the other plants.

The plant typically produced 15000 different end items annually and carried 34000 numbers in the item master including phan­toms, which were a small percentage of the total. The end items were sold direct to customers, other Square D facilities domestic or international and some were sent to a large warehousing facility in Kentucky. Component parts were also supplied to other Square D facilities abroad that manufactured the same products. 15% of the items produced were assembled-to-order; less than 1 % were engineered-to-order.

An annual sales forecast for the next twelve months was provided by Corporate Finance and was supplied in income dollars. The forecast was updated quarterly. Field Sales and Marketing per­sonnel worked for different people and had different objectives and programs.

New Product Engineering and Continuing Engineering were separate departments and did not interface formally with Manu­facturing, Material Control or Planning.

All of these functional departments were overstaffed and all felt like they were short resources to do their jobs.

The Cure

Today, every one of the original change objectives have been met. To help understand the project they are as follows:

• Master Plan will drive all production activities

• Master Plan will include labor requirements

• Primary Planning tool will be on-line and real-time

• Eliminate Shop Schedules for Finished Goods

• Reduce delivery from 8 weeks to 2 weeks

• Measure performance and adherence to Plan weekly

• Tie the Plan to Sales Forecast

• Tie the Sales Forecast to a Plan

The first step to improvement was the simplest as well as the hardest. It was decided that Manufacturing, Material Control and Planning would be one functional activity. No action by one activity group would be executed without the knowledge of the other. This Planning-based philosophy would be the foundation of all future improvements. The Master Plan would always represent manufacturing capabilities and Manufacturing would only execute the Master Plan. There are some very old and dusty books in a lot of APICS libraries that say the same thing but sometimes the first things learned are also the first things forgot­ten.

Since the demand environment for the end products could be very volatile, sending a weekly "schedule" to the Shop was a nonpro­ductive activity. Changes were made daily. Master Planning needed to get out of the Shop scheduling business and concentrate on planning. It was decided to empower the Shop to make the daily decisions. That meant that production could only be what the Plan represented since that was what drove procurement. It was at this point that Continuing Engineering was formally linked to Manufacturing and Planning. In a two-year program common­ality of components was increased by 37%, which was enough to provide the needed flexibility in the Shop to satisfy customer demand from work-in-process. That commonality process con­tinues today.

To be Continued


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