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Seradex White Paper

A Discussion of Issues in the Manufacturing OrderStream

Production Scheduling, or
How do I Ship on Time?
Excessive Work In Process
Those of us involved in
production and manufacturing have Many companies have made
found the past several years to be quite impressive strides in recent years
challenging. In company after company, toward more effective manufacturing
attention is shifting back to the source-- and control systems. They have built
-to the plant--- and fundamental issues data bases and have improved shop
are being addressed once again. floor and inventory reporting disciplines.
Some are reporting sizeable reductions
One such fundamental is plant in raw material inventories-- at least
scheduling as a basic issue. The partly stemming from better planning
schedule after all is the driver of all day- and control. Typically MRP systems have
to-day activities. The schedule assisted in achieving those raw material
determines output and performance. reductions.
Some companies have confronted their
scheduling difficulties successfully. For But much less progress has been
them, their new approach is part of the made on the shop floor. For many, the
solution--it is the key to a new level of more difficult problem--or opportunity
highly productive and profitable to look at the positive side is work-in-
operations. Others have stayed away process inventory. The problem seems
from the basic change. For them to defy logic, MRP logic in any event.
scheduling remains part of the problem.
Excessive WIP levels hurt
The innovative companies have performance in many ways. The most
adapted their plants to shorter runs, direct is the high cost of financing the
less work-in-process inventory and WIP investment. Next comes the direct
faster response time to customers. For link between WIP and production lead
others, scheduling is still a problem--a time. A high level of WIP is a guarantee
major point of leverage that continues of long production lead times.
to erode profits.
Although many manufactures
In this article, we will review recognize the opportunity and
some of the symptoms of poor understand the leverage lower WIP
scheduling. As you consider each point, offers, many are stymied. Improvement
check off your own plant's situation. You to layout and faster change overs are
may conclude certainly excellence steps in the right
that you have a sizeable opportunity direction but what has been missing is
awaiting your attention. the overall logistical system that leads
to sizeable, permanent results.

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Month-End Syndrome Travelling Bottlenecks

Many plants have a pattern of Many plant mangers blame


shipments that is as predictable as the sputtering output and erratic order date
phases of the moon. For the first part of performance on travelling bottlenecks.
the month, the output rate is fairly The schedule looked good until a
steady, but lower than required sudden overload was discovered in
operations proceed at a comfortable grinding, or assembly. When it comes
pace. Suddenly as the end of the period as a surprise, the bottleneck limits
approaches the pace quickens. Some production. Instant overtime is
companies ship as much in the last available, but too often shipments are
period as they shipped in the first three. late, and schedules throughout the
plant are disrupted.
Most companies that suffer from
month-end syndrome see it as a source So common is this kind of
of tremendous inefficiency and situation that many managers have
frustration. If they staff for the peaks, come to accept it as an intrinsic feature
they face viable idleness and low of their operation. Like the surge at the
productivity 75% of the time. If they do end of the month, they accept roving
not staff for the peaks, each surge bottlenecks as the natural state of
results in high overtime cost etc. affairs, and in both cases a great deal of
Equally disturbing, when formal systems time is routinely spent expediting "hot"
cannot cope, "squeaky wheel" decision- parts on the shortage list.
making takes over. Expediting becomes
a way of life. Even companies with well
developed MRP systems are not immune
A number of explanations are to this problem. In the planning
offered for why this kind of cycle department a common response is to
persists. Salesman delaying orders and increase standard lead times in the
payment terms which favour late-month departments that are most often
shipping are commonly put forward. The overloaded, however, these results in
month end sales/dollar shipped longer lead times and higher WIP
performance measurement. Products inventories without solving the real
schedules are set to maximize problem at all.
efficiencies--to maximize run-lengths, to
minimize changeovers, to make The easy explanation for
individual departments numbers look travelling bottlenecks is that the mix of
good. Batch-size decisions are made to orders and therefore the mix of work
appease some arbitrary mathematical changes, causing heavy requirements at
lot-size equation. different places at different times. In
most plants, though, the basic work
Most of the reasons given are center load profile remains surprisingly
internal decisions and usually customer stable over time. Changes in mix do
requirements (actual demand) are not alter the profile but only marginally.
fully considered.

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UNIFORM SCHEDULING deliveries of less quantity, which is
increasing every day.
We have discussed some of the
common symptoms of poor scheduling Those of us involved in
there are others. Sometimes early- production and manufacturing have
mostly late, high level of finished goods found the past several years to be quite
of some items at the same time a challenging.
shortage of other items. One overlooked fundamental area is
In all cases, the solution lies in better plant scheduling. The schedule after all
scheduling. is the driver to all day-to-day activities.
Those companies which have confronted
Uniform Scheduling is an actual their scheduling difficulties have
planning method for resource allocation achieved a new level of highly
based on smooth production flow. The productive and profitable operations.
mix of products required for the month The innovative companies have adapted
are made on a daily bases. The key is to new approaches such as Kanban,
produce some of every product every Uniform Scheduling and True Finite
day. The daily schedule is the same for Scheduling methods to achieve the
the entire month. overall logistical systems that lead to
sizeable and permanent results.
For example let's assume our
monthly demand for this period is: PRIORITY MANAGEMENT:
200 part A, 100 part B, 100 part C, 40
part D. Typical month schedule would "Squeaky Wheel" decision
be to produce all 200 of part A, followed making takes over, expediting and
by 100 part B or Part C and finally the overtime becomes a way of life.
40 part D. Schedules are set to maximize internal
As a customer of part D unless it efficiencies such as run-length, machine
was stocked would have to wait till the utilization, change overs, lead-times are
end of the period in order to acquire extended due to
product. bottleneck's. These are internal
Now, Uniform Scheduling states" build decisions and usually customer
some of every product every day". So requirements are not fully considered.
under those rules the monthly schedule We have indicated some of the common
would be broken down to show a "Daily symptoms of poor scheduling there are
Schedule"-- of 10 parts of A, 5 parts numerous others. Sometimes early -
each of B and C and 2 parts of C. The mostly late, high level of finished goods
results of scheduling in this manner is of some items at the same time a
we now have products available to sell shortage of others.
and ship every day. In all cases, the solution lies in better
scheduling.
Some of benefits of this
approach, over our typical method are, UNIFORM SCHEDULING:
the same daily schedule for the entire
month, equipment balance, A planning method used for
material control work center loading to resource allocation based on a smooth
name a few. production flow. The mix of products
required for the month are made on a
Uniform Scheduling in itself can daily bases. The key is to produce some
have a major impact on the problems of every product every day. Some of the
mentioned early in the article. The benefits of this approach, over typical
greatest benefit of all is to fulfill our methods are: products are available to
customers demand for more frequent sell and ship every day, the same daily
schedule for the entire month,

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equipment balance, material control, to COMPUTER ASSISTED TOOLS:
name a few. Typical MRP SYSTEMS lack good
scheduling logic. Frequently they ignore
Kanban signals capacity constraints and offer no priority
control. Today there are far superior
The main rule is that the finite scheduling systems that generate
preceding operation signals the prior a meaningful and realistic schedules
operation as to when it requires with "WHAT IF" capabilities. These tools
components (JIT). Kanban systems can give the Master Scheduler far more
be used to control production flexibility to generate a more optimized
requirements all the way from the schedule then in the past.
customer through production to outside KANBAN "PULL SYSTEMS": A scheduling
suppliers. system driven by actual consumption of
components using synchronized
SERADEX INC. experience has replenishment signals for control. These
indicated that most companies, whether signals are referred to as
in a job shops or mass production
environment can benefit from adopting
better scheduling methods.

As your customers become more


demanding for shorter lead times and
more frequent delivers you must
respond to satisfy their needs.
Scheduling is a critical area to improve
to maintain on-time delivery.
If your organization has some of the
above symptoms and you would like to
further discuss on how they might be
resolved, please call us and arrange a
time for to meeting and a review your
present situation.

Seradex Inc.
4460 Harvester Rd.
Burlington, ON
L7L 4X2
Tel: 905-332-5051
mcorker@seradex.com
www.seradex.com

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