Basic No. 10: Production Linearity
Companies will never achieve their full growth and profit potential if they produce more than 25% of their monthly shipment plan in the last week of the month or more than 33% of their quarterly shipment plan in the last month of the quarter.
As companies struggle to remain competitive, one of the strategies by which gains in speed, quality and costs can be achieved is to form self-directed project team to pursue and continuously improve production linearity.
Companies that continue to live with the end-of-the-month "scramble" will never achieve their full growth and profit potentials. "Production Linearity" doesn't come easy.
How do you smooth schedules and achieve manufacturing linearity? This is at the top of the list of required production scheduling solutions.
The challenge is in how to keep daily pressure on the critical path of scheduled achievement. We need to have the visibility of all critical tasks and milestones from day one of the month and create team awareness and commitment to their timely achievement.
Our manufacturing team must become sensitive and proactive in the execution of early production planning details and they must learn to apply their creativity and energy in a proactive style. To be sure, upfront planning and execution can yield amazing manufacturing results and lead to profitability beyond expectations.
The most effective production manager I've ever known used a huge magnetic board to schedule and monitor daily production details and track production linearity trends. An early focus on daily details, corrective actions and recovery planning was his management style.
He would hold early morning meetings every day to status yesterday's progress on the magnetic board and to establish the daily challenges. He was an expert at team dynamics and his people always new what they had to do and they were always provided the tools to get the job done. These are the basics of production scheduling solutions.
The combination of the magnetic board, the morning meetings and his team dynamics skills made this production manger an effective leader and an expert in achieving production linearity. I know this story is true because I was that production manager.
Today many production managers are still trying to solve their linear production problem by pursuing a sophisticated computer software solution. Most companies are now using MRPII/ERP manufacturing systems to control their production environments. These systems do not provide timely and detailed tasks that are crucial to achieving manufacturing linearity. MRPII/ERP do not produce a solution to the "Hockey Stick Syndrome".
On the other hand, using an old magnetic board in this day and age of computer sophistication may not be an acceptable alternative. A good trade-off might be to develop a simple computer spread sheet specially designed to plan critical production milestones and to measure/monitor manufacturing linearity on a day-to-day basis.
SIDEBAR: At Palomar Systems, we developed a production linearity program around a daily updated, computer generated spreadsheet and moved the daily morning meetings from the conference room to the shop floor. This program was a significant contributor to the company's success. (Gross Profit increased from 32% to 55% as sales climbed from $18 million to $250 Million.
Using this daily schedule as the "bible", the next step would be to retrain the "Knights in shining armor" to gradually shift their manufacturing paradigm from end-of-the-month "fire fighting" to daily proactive problem solving.
Finally, it is important to differentiate between shipment linearity and production linearity. In a widget, make-to-shelf manufacturing company that builds substantial finish goods inventory and in highly engineered capitol equipment manufacturing companies the two linearity measurements will not be equal.
Shipment linearity may be more of a function of sale bookings and customer's preference rather than nonlinear production. Consequently, the measure of manufacturing linearity. must be developed to measure the performance of the manufacturing process and not be influenced by sale bookings or customer related shipment delays.
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