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When shipments can't keep up with an upturn in business,
sales people point to production efficiency as the problem, production
people point to material shortages as the problem, and the materials
people point to poor forecasting and scheduling as the problem. These
problems cause
significant negative impact on shipments and usually result in a company's
failure to capitalize on business recovery opportunities.
Whenever someone asks me, "Bill, what was your most difficult
challenge encountered during your career as a production manager?"
Without hesitation I respond, "Convincing our executive leadership of
the need to
increase the work force and then getting their timely authorization to do
it!" Early in my career, I watched manager after manager fail to get
the job done because they didn't have the proper resources in place
to deal with the day-to-day challenges of meeting schedules. Most
production managers will tell you that all they need to meet their
schedules is the "parts" and in many cases they are absolutely
correct. However, herein lies a business dilemma---when the
"parts" finally do arrive, schedules still aren't met because
now the problem is the lack of requisite resources.
The problem is that although most production managers see the need for
adding resources earlier, they are unable to persuade their executive
leaders to authorize additional labor. "Why add to your team's
unfavorable labor variance ---first resolve your 'parts' shortage problem
and then we'll talk about adding people!" was the standard executive
rebuttal. Overcoming this "parts vs. resources availability"
dilemma is a prime responsibility of all production managers and, the
inability to do so, is a common cause of their downfall.
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To deal with what I call the capacity planning "Delayed Reaction
Syndrome" production managers must become experts at Resource
Planning. Not in the overly sophisticated computer modeling type, but the
practical short-term, "typical units vs. requisite resource
analysis" type. Production managers will never convince executive
leadership of their resource requirements based on standard ERP and
financial data---because it is always "too little, too late."
They must gain a time-phased, in-depth understanding of their resource and
capital equipment requirements and develop programs and systems that will
help them convince executive leadership that they are in control and
timely action is essential.
Credible, short-term Resource Planning requires that production managers
take control of their own destiny. They must work with their financial and
sales people to develop unsophisticated, high integrity processes to
monitor, forecast and control four primary Resource Planning activities:
SALES FORECASTS: One thing we know
about forecasts---they're always wrong. Production Managers must be fully
aware of how their portion of the forecast is generated and be cognizant
of past performance to plan. There are two primary techniques to help
improve the integrity of forecasts:
- Establish time fences to control when
products can be added and when they must be dropped from the forecast
and
- develop forecasted Bills of Materials
commonly referred to as planning BOMs to provide sales with the
booking and scheduling flexibility they require.
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PEOPLE SKILLS:
General Motors taught me early in my career that people are a company's
most precious resource. Production Managers must ensure that their people
are on a continuous learning curve or they will become complacent and
their skills will become obsolete. A sound approach to
developing and increasing people skills is to continuously perform
technical and professional skills "needs vs. availability"
inventories and establish an aggressive program to achieve compatibility.
The goal --- workforce flexibility.
(Such human resource inventories are crucial in protecting core
competencies and high achievers during business downturns.)
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CAPACITY PLANNING SYSTEMS:
Long-term capacity planning is normally accomplished by Enterprise
Requirement Planning (ERP) and Capacity Planning (CP) computerized
systems. The results can be used as an
input to strategic planning activity. Short-term capacity planning is
usually a home grown manufacturing "spreadsheet" system that
uses a laborized "typical unit" method of forecasting that
produces real-time labor and
skills requirements.
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WORKLOAD OUTSOURCING: Manufacturing
flexibility, production agility and reduced product costs are challenges
that must be met and achieved by manufacturing managers. Effective
outsourcing of processes that focus on company non-core business can be a
worthwhile program. To be successful, the program should consist of a
target pricing strategy, special material handling techniques, product
focused logistics and strong supplier chain partnerships.
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click here: Good Manufacturing Practices
