Manufacturers will never achieve their 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. Companies that live with the “end-of-the-month-crunch" are burdened with premium freight, internal expediting, overtime costs, and production inefficiencies that will crush their bottom line goals. But effective upfront planning and timely execution can make the “end-of-the-month-crunch” a bad memory and eliminate those profit killers.  

Most companies are using ERP systems coupled with lean manufacturing solutions to plan and control their business activities. These have eliminated the end-of-the-month-crunch for some companies but there are many more still stuck in that cycle. To appreciate the extent of the remaining problem, spend time observing certain MRP scheduled factories during the last weeks of a financial quarter. You will typically observe profit draining overtime, internal/external expediting, last minute product changes and production inefficiencies. The inevitable scrap and rework add to the profit drain. Then there are the longer term consequences of quality problems in the field, warrantee costs and the resulting customer dissatisfaction.   

Many companies have found that implementing an operations linearity improvement program can eliminate the end-of-the-month-crunch and achieve gains in speed, quality and profitability. Such a program addresses the challenge of keeping pressure on the critical path of schedule achievement. Remember this… to guarantee a great year, you need four great quarters… to guarantee a great quarter, you need three great months… to guarantee a great month, you need four great weeks… and to guarantee a great week, you need five great days. Operations linearity starts with day-by-day visibility and traceability of all critical tasks and milestones for a “rolling” one or two months schedule. It requires team awareness, commitment and proactive problem solving to assure timely and successful execution.  

New product introductions, engineering changes, and customer revisions all contribute to the end-of-the-month-crunch An operational linearity improvement program forces engineering, sales and manufacturing to work together to establish realistic schedules for the key activities. Manufacturing must be responsive to the dynamics of these schedules. And that is the problem in companies suffering from end-of-the-month-syndrome. First line supervisors are simply expected to do their best and go home at the end of their shift. They are not held accountable for day-by-day schedule achieve-ment. An operational linearity improvement program implements that accountability.  

The most effective operations manager I’ve known used a huge magnetic board to schedule and monitor daily tasks and milestones and track engineering and lean manufacturing implementation. A focus on daily details, corrective actions and recovery planning was his management style. He would hold morning meetings to review the previous day’s progress and issue recovery instructions where necessary. He was an expert at team dynamics and his people always knew what was expected of them and were always provided the tools to get the job done. His multi-function teams were truly empowered. The combination of the magnetic board, the morning meetings, the effective, multi-function teams and a skilled leader was all that was necessary to improve operational linearity and avoid the end-of-the-month-crunch.  

It is important to differentiate between shipment linearity and operations linearity. In a make-to-stock vs. a make-to-order manufacturing company the two linearity measure-ments will not be equal. Shipment linearity may be more of a function of sales’ bookings and customer’s preference rather than nonlinear manufacturing. Consequently, the measure of operations linearity must be developed to measure the performance of operation processes and not be influenced by sales bookings or customer related shipment delays.  

So let’s put up the magnet scheduling boards or, for those who would prefer a more sophisticated solution, a good trade off would be to develop a simple computer spread-sheet designed to plan critical operation milestones and to measure/monitor operations linearity on a day-by-day basis. Your past does not control your future. An operations linearity improvement program, managed by a veteran operations manager, can allow your company to say goodbye forever to the end-of-the-month-crunch. 

About the Author: Bill Gaw is the founder of Business Basics, LLC and a "been there, done that" lean enterprise advocate. He is the developer of six e-training packages and seven e-training modules published to help individuals and companies reach their full growth and earning potentials. His company specializes in Lean Manufacturing Training.