Traditional view of industry – Push the products out into the market
- – Keep producing even when there is no demand
- – Keep the factory running all the time
- – Keep lots of stock
- – Only produce what you can sell
- – Don’t produce to hold in stock
- – Keep minimum/no stock levels
“To keep a balance between reducing overall warehousing costs and be able to satisfy varying demand (e.g. seasonal) as well as maximise availability at the production facility companies utilise both the push and pull approach”
For this reason it is necessary to pay particular importance to optimising production planning.
There have been conflicting views between the corporate strategy for planning and the site strategy for what should be planned. The reason for this is related to how the departments are measured and targeted. At the corporate level it is all about reducing cost and increasing the flexibility to deliver where as at site level it is all about maximising performance measures such as OEE. This leads to very little synergy and a lot of animosity between the corporate planning department and the site production department.
The ultimate aim should be to deliver the products at the right time, at the right price and at the required quality to the customer.
At the corporate level there needs to be an understanding about the plant/line capability. This is the actual delivery capacity of the line. The key element to understand is that if the number of products to be made is large the actual availability to produce will be low reducing the actual capacity due to the number of changeovers required. To have the maximum capacity available, there needs to be a strategy to have as many long runs of product as possible and minimise need of the changeovers as much as possible.
At the site level, there needs to be an understanding that there are requirements to produce small runs of certain products due to their demand profile and to keep the warehousing costs low. Once the amount of products to be made is received from central planning, the site scheduling department needs to look at scheduling the production runs that will maximise the line availability by looking at combining production runs that are required at different times and by looking at minimising changeover times by scheduling product runs that require minimum operations (therefore time) to changeover. The site can look at ways to optimise their changeovers by implementing quick changeover programmes such as SMED and by looking at technology and innovation to eliminate changeovers all together between different product runs.
Therefore to summarise:
- Understand what product types are runners, repeaters and strangers – Please read an article on “The Reflective Supply Chain in Manufacturing” By John Hicks and Patrick Lee
- Decide on minimum buffer (stock) quantity for each product type
- Determine production batch size of each when minimum stock quantity is reached – this may vary on future demand and seasonality
- Put together a production plan to make products that have reached their minimum stock quantity – decide between product mix and volume required by taking into account plant/line capability with a view to maximise plant/line availability
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Planning Optimisation is:Correct
Fill the gap:
- To understand the frequency of scheduling the various products, it is useful to carry out a Runners, Repeaters & (Strangers) analysis of the demand