The inadequate and untimely availability of resources is a major cause of manufacturers’ failure to meet their delivery schedules and profit margin forecasts – material shortages, low productivity and poor planning are not always the only causes.

Whenever someone asks me, "Bill, what was the most difficult challenge that you encountered during your career as a production manager? Without hesitation I respond, "Convincing our executive leadership of the need to adjust the direct labor 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, here in lies a business dilemma – when the "parts" finally do arrive, schedules still aren’t met because now the problem is the lack of sufficient production capacity.

Executive Procrastination

The production manager saw the need for adding capacity earlier but was unable to convince executive leaders to hire additional labor because his/her production group was generating unfavorable labor variances due to "part" shortages. "Why add to the unfavorable labor variance – first resolve your "parts" shortage problem and then we’ll talk about adding people!" was the standard executive position. 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.

Short-term Resource Planning requires the production managers to take control of their own destiny. He/she must develop effective continuous process improvements to control four critical Resource Planning activities:

SALES FORECASTS: One thing we all know about forecasts – they’re always wrong. Production Managers must be fully aware of how their portion of forecast is generated and be cognizant of past performance to plan. There are two primary techniques to help improve the integrity of forecasts: a) establish time fences to control when products can be added and when they must be dropped from the forecast and b) develop forecasted Bills of Materials commonly referred to as planning BOMs.

WORKLOAD OUTSOURCING: Manufacturing flexibility, production agility and reduced product costs are challenges that must be met and achieved by production managers. Effective outsourcing of projects that focus on a company’s 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 partnerships. And, no related job losses.