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 teams of employees to pursue and continuously
improve production planning.
so important? Itís simple; "Itís where the money is!"
Scrap, rework, overtime and poor quality are all non-value-added
costs that increased as a function of the famous "Hockey Stick
Syndrome". That is, as we delay our production schedule
completions toward the end of the month (or worse, to the end of the
financial quarter), there is a tremendous pressure put on
Manufacturing that produces shop floor chaos that generates
significant non-value-added cost. We usually end up making the
production plan and financial forecast because the "Knights in
shining armor" come through with a last minute, heroic
performance. But, at what cost? Some companies actually give up 10
to 20% of their potential profit margins because they have developed
and fostered a manufacturing team that perpetuates the "Hockey
Turnaround requires the tenuous implementation of seven
Turnaround requires the tenuous implementation of seven production planning solutions
Companies that continue to
live with the end-of-the-quarter "push" will never achieve
their full growth and profit potentials. How do you smooth schedules
and achieve linear production? The challenge is in how to keep daily
pressure on the critical path of schedule achievement. We need to
have the visibility of all critical tasks and milestones from day
one of the quarter 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 linear
style. To be sure, up front planning and execution can yield amazing
manufacturing results and lead to profitability beyond expectations.
The most effective
production manager Iíve ever known used a huge magnetic board to
schedule production planning details and monitor production
linearity. An early focus on details, corrective actions and
recovery planning was his management style. He would hold early
morning meetings every day to status yesterdayís 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. 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 linear production.
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 a focus on the detail, up front tasks and milestones that are critical to linear production and consequently have not presented 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 designed to plan critical production milestones and initiate a balanced scorecard capability to measure and monitor production linearity.
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-quarter "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
build 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 Salesí bookings and customerís preference rather than nonlinear production. Consequently, the measure of production linearity must be developed to measure the performance of the manufacturing process and not be influenced by Sales bookings or customer related shipment delays.
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.