Why has Production Scheduling Become a Top Priority for Manufacturers?
Gene Caiola is a Partner and the Director of Services at Synergy Resources. Gene has worked with hundreds of small and large manufacturers in the areas of production and shop floor control, quality, accounting and Information Technology (IT). Gene spoke to us about why improved production scheduling has become a top priority for manufacturers.
Part 1 of a 2-Part Series:
Q: We understand that you’ve been facilitating online workshops with manufacturers on the topic of scheduling. What can you tell us?
Gene: Over the past several months, we’ve conducted scheduling workshops with over 50 of our manufacturing industry customers to discuss their business challenges and scheduling practices. The meetings usually last about an hour. Typically, there are two to six managers in attendance from the main functional areas of the business including production scheduling, materials management and Information Technology (IT) with many executives and owners often attending these meetings, too.
Q: Why has production scheduling become a top priority for manufacturers?
Gene: Lately, manufacturers are telling us that they’ve been getting a lot more business in the door. Manufacturers don’t know how they’ll handle this growth opportunity without better scheduling tools. They need to deliver orders on-time because they want to retain these new customers as well as keep their existing customers. Customer satisfaction is important because customers have options. Customers can take their business elsewhere when manufacturers don’t deliver on-time.
Q: Today, what are manufacturers doing about scheduling?
Gene: Most small to medium-sized businesses (SMB) who manufacture do not use fully automated scheduling solutions. That means data isn’t always available when and where it’s needed. For example, manufacturers might not be able to accurately respond to customer inquiries about the statuses of jobs in the shop. Lack of that data often creates a need for costly expediting. Data might be missing to generate Work Orders, or the capacity in the shop might not be available to produce a schedule.
Even among those manufacturers who say they’re scheduling, many are not comfortable with the software’s implementation. Many have come up with ways of using spreadsheets or other means to make scheduling decisions. Often, our manufacturing customers are saying that their manual solutions are difficult to use. Certainly, they are not scalable. It’s a problem. If the business grows, they’ll be hurting.
Q: Do manufacturers ever lose trust in their scheduling systems?
Gene: Great question, trust in the scheduling system is a serious issue. We’ve seen cases where the schedule is on target and trusted when released but in a short time it’s no longer accurate. Variables such as machines going down, late material, and changes in customer requirements will affect the accuracy of a schedule. Shop floor people immediately understand the impact of these variables. If they feel they know better and don’t trust the software system, they will work around it. Workers are doing what they think is the right thing to do.
We’ve found that this happens for two reasons. One, end users don’t always understand why the system scheduled jobs the way it did. It doesn’t make sense to them and they don’t understand how the computations are made. Two, when variables hit – such as when a machine goes down or when materials become unavailable – workers will mentally adjust their schedules in their own heads. Consistent mistrust of an automated schedule usually results in it being abandoned and reverting to more manual methods such as spreadsheets.
For that reason, the scheduling system must be very active. It, too must be adjusting to events as they happen in real-time. If your people don’t trust the scheduling system, they won’t use it.
Q: What should manufacturers know about implementing an automated scheduling solution?
Gene: The first is cost. There’s an upfront cost to scheduling that needs to be acknowledged. Implementation requires the manufacturer’s time and attention. The software will need technical and consultative support services from the implementation provider. There might also be the expense of acquiring new software in case the manufacturer’s ERP doesn’t include a scheduling solution or one that’s appropriate for their individual needs.
The second fact I tell customers is that Scheduling is a team sport. No one should expect only one person in the shop to do the scheduling. Everyone on the shop floor needs to be involved in some way by not only understanding it but also providing feedback that will help keep it accurate.
Q: What are the benefits of automated scheduling?
Gene: Using the manufacturer’s data, we can model the benefits of improved throughput efficiency and the expected payoff. It’s always a big number. The lowest number we can recall was a return of $20,000 month – and we felt that was easily attainable with just a 3% increase in throughput. Scheduling can have a big impact on the bottom line!
There’s another consideration. If you, the manufacturer, could do more – if you’re using resources better, optimizing your capacity and shipping more – is your market such that customers will take these deliveries sooner or even pay more to get their orders delivered faster? It’s the other side of the lead time question. Scheduling can help you gain the ability to turn around more customer orders, and generate more profit with the same amount of resources.
Scheduling has qualitative benefits, too. What does it mean to customer satisfaction and retention when the manufacturer is able to reduce lead times? How much confidence does the manufacturer’s sales staff gain knowing they can successfully service and support new customers?
Q: Is there more than one scheduling methodology?
Gene: In our workshops, we discuss three proven approaches to scheduling. Specifically, finite based scheduling, Drum Buffer Rope (DBR) and Protected Flow Manufacturing (PFM). We explain how each of them work. Each is a very different approach to maximizing the use of shop floor resources.
After we explain how each one works, we compare and contrast them against five different characteristics. These include set-up and data management, sensitivity to data on the shop floor, management of capacity, ability to make proactive decisions on problem areas, ease of implementation and the trust of the schedule.
We believe that thinking through the issue in this way can help manufacturers discover the specific scheduling solution that may be just right for them.