Expand your time horizons
Posted: Wed Jan 29, 2025 10:11 am
In most companies, the OP becomes exaggeratedly operational - it is reduced to 2 days. And this leads to inefficient use of equipment and failure to fulfill orders. The fact is that the execution dates agreed upon by the commercial department, technological cycles of manufacturing goods and longer cycles of delivery of parts cannot be synchronized over a short period of time.
It is important that the OP takes into account the prospect and does not break off with the last day of the month. The planning period differs from the accounting period in that in the first case the horizon does not collapse into a point on the 31st. Each day spent in production adds another new day - with its own queues, orders, readjustments, deadlines, shipments.
Example .
At a metallurgical plant, there switzerland email list was a monthly cycle for receiving orders in the commercial department. Orders came in every day, and by the middle of the month the program was known. Deviations related to payment and adjustments to the delivery times of transport by customers were allowed. But of all this, production saw only 1 day. Reminds me of "Groundhog Day", doesn't it?
As a result of such production planning, the equipment utilisation rate was reduced, as it was often reconfigured to produce daily output. The transition to a four-day production horizon made it possible to form large launch lots to reduce reconfigurations and associated losses and downtime.
We also managed to increase the equipment utilization rate to 84% and add about 35 hours per week (previously they were spent on readjustments). Interestingly, the commercial department managed to keep production from the temptation to see the order book for a month in advance.
In this case, there was a high probability of violating the shipment deadlines due to excessive increase in batches and formation of surplus finished goods in the warehouse. The company was able to find the golden mean in the OP horizon by establishing a rule for the duration of the horizon of 3-4 times the duration of the technological cycle.
Pull planning through shipping
To improve OP, the warehouse must work like clockwork, and shipment must proceed without any failures.
Example .
The growth rate of office supplies production at one Russian company has slowed. The territory cannot be expanded, and moving the site is not profitable. The warehouse turned out to be a weak point: the shipment of goods was too slow, and trucks accumulated in a small warehouse area or stood idle on narrow approaches to the plant.
Pull planning through shipping
Source: shutterstock.com
With the help of WMS (Warehouse Management System), the owner automated the warehouse and implemented cellular storage. Thanks to this, the turnover increased 3-4 times.
However, production ceased to comply: instead of the goods expected by customers, they produced those that took up space in the warehouse and had to wait for customers themselves. The KPI identified discrepancies and eliminated them, replacing them with a general indicator - the delivery of the assortment planned for shipment in the next 2-3 days. As a result, the deadlines for fulfilling orders of the commercial service and the deadlines for releasing products in production were synchronized.
The problems of packing and shipping were solved after changing the meaning and function of production planning, and planners developed algorithms for coordinating requests from production and the commercial department. The waiting time from order to receipt of the product by the customer was reduced from 5 days to 1.
It is important that the OP takes into account the prospect and does not break off with the last day of the month. The planning period differs from the accounting period in that in the first case the horizon does not collapse into a point on the 31st. Each day spent in production adds another new day - with its own queues, orders, readjustments, deadlines, shipments.
Example .
At a metallurgical plant, there switzerland email list was a monthly cycle for receiving orders in the commercial department. Orders came in every day, and by the middle of the month the program was known. Deviations related to payment and adjustments to the delivery times of transport by customers were allowed. But of all this, production saw only 1 day. Reminds me of "Groundhog Day", doesn't it?
As a result of such production planning, the equipment utilisation rate was reduced, as it was often reconfigured to produce daily output. The transition to a four-day production horizon made it possible to form large launch lots to reduce reconfigurations and associated losses and downtime.
We also managed to increase the equipment utilization rate to 84% and add about 35 hours per week (previously they were spent on readjustments). Interestingly, the commercial department managed to keep production from the temptation to see the order book for a month in advance.
In this case, there was a high probability of violating the shipment deadlines due to excessive increase in batches and formation of surplus finished goods in the warehouse. The company was able to find the golden mean in the OP horizon by establishing a rule for the duration of the horizon of 3-4 times the duration of the technological cycle.
Pull planning through shipping
To improve OP, the warehouse must work like clockwork, and shipment must proceed without any failures.
Example .
The growth rate of office supplies production at one Russian company has slowed. The territory cannot be expanded, and moving the site is not profitable. The warehouse turned out to be a weak point: the shipment of goods was too slow, and trucks accumulated in a small warehouse area or stood idle on narrow approaches to the plant.
Pull planning through shipping
Source: shutterstock.com
With the help of WMS (Warehouse Management System), the owner automated the warehouse and implemented cellular storage. Thanks to this, the turnover increased 3-4 times.
However, production ceased to comply: instead of the goods expected by customers, they produced those that took up space in the warehouse and had to wait for customers themselves. The KPI identified discrepancies and eliminated them, replacing them with a general indicator - the delivery of the assortment planned for shipment in the next 2-3 days. As a result, the deadlines for fulfilling orders of the commercial service and the deadlines for releasing products in production were synchronized.
The problems of packing and shipping were solved after changing the meaning and function of production planning, and planners developed algorithms for coordinating requests from production and the commercial department. The waiting time from order to receipt of the product by the customer was reduced from 5 days to 1.