Does your operation react too slowly to changing business conditions? Once orders start becoming past due, does the situation often get worse before getting better? Do costs and inventory rise when business slows? You can get help with finite production scheduling software.
Most manufacturing operations are tasked with satisfying customer demand in a timely manner while minimizing costs and inventory. These competing goals are hard to manage in stable environments, but few manufacturing environments are stable. Even if you minimize internal variability to the lowest possible levels, customer orders will still fluctuate.
Some fluctuation of customer orders is due to the natural rhythms of the business cycle. Good times transition into bad times which transition back into good times. Try as they might, economic experts seem unable to predict exactly when a boom or bust will occur. Another reason for customer order fluctuation is variability in your customers’ businesses, due to their own internal and external factors. As bad as the “experts” are at predicting overall economic activity, your sales staff is worse at predicting the order patterns of your customers. Any limited success sales staff have is typical early in time. Forecast naturally get worse the further out in time they go.
Fluctuating order volumes can severely limit your ability to hit your goals. It is hard to see trouble building and it is natural to react too late. For instance, if order volumes drop, manufacturers often don’t cut overtime quickly enough. You may continue to use overtime to build excess inventory which causes a double whammy to your performance. The severe cost impact may force you to not only cut overtime, but headcount as well, leading to delivery problems in the future.
Reacting too late to an increase in orders may be even worse. Once you get behind, it can be very difficult to catch up. While overtime will help, expediting usually makes matters worse. You can easily be forced to react to customer complaints by continually adjusting shop floor schedules. Expediting in this manner can lead to chaos on the shop floor, and efficiency and cost performance “going down the drain”. What can you do?
Better visibility is the obvious solution. If you can see problems developing before they bite, you can take the necessary corrective action. But how to get the visibility you need?
Finite production scheduling software will give you the visibility you need. The key feature of this scheduling software is its ability to explicitly considers the limited (or finite) capacity of your manufacturing operations. Unlike ERP\MRP software, finite capacity scheduling software doesn’t offset hours of load by some highly inaccurate measure of lead time. Rather, production scheduling software with finite features explicitly blocks out capacity on limited machines, tooling, labor, and space. When scheduling forward in time, finite capacity scheduling software not only gives you precise shop floor schedules, but also gives you accurate estimates of when production orders will finish relative to their due date.
This class of scheduling software can also consider material constraints. The constraining material can include on-hand inventory, material on purchase orders, or components on internal manufacturing orders. Finite capacity production scheduling software that explicitly considers material constraints is often called advanced planning and scheduling software.
Finite capacity scheduling and advanced planning and scheduling software can schedule as far out in time as you can provide estimates of orders. Rather than just reacting to orders, you can now see trouble brewing far out on the horizon. Furthermore, finite planning / scheduling software typically contains robust what-if features that allow you to save and compare an unlimited number of scenarios. These what-if \ scenario features allow you to easily try out alternative forecasts \ models of demand. Therefore, even if your forecasts aren’t accurate, you can still get visibility benefits by experimenting with different estimates of customer demand.
In addition to forecast what-if’s, you can use finite capacity production scheduling software to experiment with other scenarios to help you deal with fluctuating business volumes. If you see demand building out in the future, and the software predicts orders will be late, you can try working overtime, adding shifts, adding people, or even capital acquisitions. If you see demand dropping in the future, you can cut back work hours before you are forced to consider headcount reductions. Also, finite capacity scheduling and advanced planning and scheduling software can help you work around internal problems when they do occur. The software can help you deal with material shortages, quality issues, machine downtime, hot orders, and operator call offs.
Change is unavoidable in manufacturing environments. Future visibility into when work will finish allows you to “stay ahead of the curve”, and avoid problems associated with too little or too much capacity. Finite capacity production scheduling software and advanced planning and scheduling software gives you the visibility you need.