Routings typically have more detail in them than is required
because companies simply transfer to the routing the steps to make
the product the manufacturing engineers have identified. The routing
structure needs to be reengineered by first understanding what they
are used for. Not only can they identify how to make
the product, but they are used for priority planning (dispatch
costing the product. We need to ask the question can we combine
operations and still accomplish the objectives? An excellent way to
eliminate steps is through the use of kanbans. This will identify
what to work on and when, without having a routing step. However,
the cost and capacity considerations need to be examined first.
These are often resolved using activity based costing and by
planning the capacity of the constraint machine.
One of the major stumbling blocks to condensing
the routing is measuring performance. But before we discuss that
issue, let's consider routing accuracy. The minimum acceptable to
support the above requirements is 95%. How do we achieve that level?
Same as we did with the bill of material, by enlisting the shop
people. Start beating them up for performance and they will not feed
back the routing data accurately, especially the standard times.
Rather than using MRP to report performance why don't we use it to
identify problems? Again we have to change management attitude from
one of brow beating to one of problem solving.
MRP's need for accurate inventory is a well known
fact. Cycle countinghas also become recognized as a necessity to
achieve and maintain inventory accuracy. Unfortunately, many have
employed cycle counting without understanding its purpose. The
result is a much lower level of inventory accuracy than the 95%
minimum required for MRP when measured on a hit or miss by piece
count method. Those that have been successful in achieving the
minimum level of inventory accuracy have learned that the purpose of
doing cycle counts is to find the cause of errors and not just to
correct the inaccurate count because cycle counting can not find and
fix the counts as fast as the errors can be made. Since MRP's
objective is to eliminate shortages, all parts (Class A, B and C)
must be counted, not just the expensive. Most companies are under
constraints when it comes to allocating dollars for activities such
as cycle counting. Therefore, we want to do as many counts as
frequently as possible with the least number of people. This
requires reengineering the process. One method to do this is to
start down the aisle and count only what is easy. If there is a
large quantity that is not easy to count an estimate is done. If the
estimate doesn't look accurate the parts are counted and a miss is
recorded. If the estimate looks right it is recorded as an audit not
an actual count. Process cycle counting has been proven to allow an
average of thirty times more counts than the normal ABC analysis
while resulting in accuracy well above 98%.
Companies that have employed process cycle counting come to the
conclusion quickly that packaging makes the parts much easier to
count. A quantity of a thousand might only be ten packages of a
hundred. Ten is easy to count, therefore, it can be quickly and
accurately counted. This is true not only in cycle counting, but
also in receiving and issuing. Packaging should start at the
supplier or in the manufacturing areas.
To be Continued
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