On-Time Delivery

In a simplified, make to order environment, it is theoretically possible to consider capacity limitations and generate schedules with accurate order completion dates. However, scheduling manufacturing plants of any size is very computation intensive. Therefore, it is rarely feasible to schedule manually. Even in situations where manual scheduling is possible, the sort of change that is frequent in manufacturing environments invalidates the schedules. Therefore, any approach that seeks to generate finite schedules must be able to handle large numbers of calculations quickly and be able to easily react to changing circumstances on the shop floor.

The recent advent of fast, interactive personal computers and work stations with graphical capabilities have made finite capacity scheduling software a reality. Today's finite capacity scheduling software quickly generates detailed schedules. Even more impor­tantly, finite capacity scheduling software often contains easy to use What-lf features that allow changes to be made at any point in the scheduling process.

What-lf features have a number of important benefits. First, they allow scheduling staff to use their intuition and knowledge of the operation to develop and save unlimited numbers of alternative schedules. The software typically provides feedback in graphic and report based formats that allow staff to compare alternatives and pick the best option. Second, What-lf features afford sched­ulers an opportunity to easily and quickly capture in the software the rapid changes that are so common in manufacturing environ­ments.

Some typical What-Ifs that may be undertaken with finite capacity scheduling software are:

• There is a shop floor problem such as a machine breakdown, a material shortage or operator absenteeism. What-if analysis can help staff to schedule around the problem to minimize disruption.

• A customer changes order requirements such as quantity, due date or part number. What-if analysis can help staff accommodate the change and reduce the impact on other orders.

• An important customer will place a large order if the company can guarantee delivery in less than the standard lead time. What-if analysis can help staff promise delivery and incorpo­rate the new order into the schedule while reducing impact on other orders.

• The organization is considering shop floor changes such as new machinery, more shifts, additional products, different vendors or extra staff. What-if analysis will show how the changes will affect performance measures such as lead time and machine utilization.

At a minimum, the approach discussed in this paper will help companies deliver more product on time to their customers. However, the additional benefits received can be immense. Huge profit increases and dramatic improvements in competitive posi­tion have resulted from making use of the method described. The approach has helped companies:

• cut direct material costs due to better scheduling of production and therefore better scheduling of raw material purchases.

• reduce direct labor and outsourcing costs because of more efficient shop floor operation, better scheduling of overtime, and better planned use of outside processing.

• decrease finished goods and work in process inventory costs through better ability to control and handle internal and customer order change.

• cut labor costs required to generate schedules due to computer automation.

• reduce expediting and premium transportation costs due to better scheduling and management of existing resources.

• avoid unnecessary capital expenditures because of increased throughput.

• increase sales and competitive position through higher levels of on time delivery, shorter lead times and lower costs.

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