
Introducing VISUAL ERP Lean Scheduling:
- Reduce WIP by managing when material gets sent out to the shop floor. Stop releasing material that you know won’t get worked on for weeks, it’s clogging up WIP and only confusing the true priorities of what really needs to get done.
- Implement a priority system that optimizes what really needs to be worked immediately at each resource center (person, machine, cell, etc.) . Hint – it’s not due date.
- Always plan and execute to have the right amount of each product at all levels – finished product, subassemblies, and raw purchased material – based upon true customer demand and desired customer service levels.
“The Goal” by Dr. Eli Goldratt
If you have read “The Goal”, then you already know how VISUAL ERP can increase throughput without increasing overhead.
It contains significantly profound concepts about how to improve your throughput.
What’s throughput? It’s a financial measurement whereby any unit increase in throughput goes right to the bottom line.
Looking to cut manufacturing costs, utilize your resources more efficiently, and decrease your unit product cost? That’s very prudent, frugal thinking. But be careful. Cuts in material or labor costs or time may have a detrimental effect on your product quality. And there’s always a limit to how much you can cut costs (down to $0). Conversely, there is infinite potential to increases in throughput! How much additional throughput would it take to double or even triple your company’s profits? Probably not much. Work out the math and learn the potential of focusing on Throughput, and the perils of focusing too much on decreasing unit product cost here:
Why do we start a page about Scheduling with topics on Throughput and Cost Accounting? Because that should be the purpose of Scheduling, not just to provide a dispatch list to the shopfloor, but a dispatch list that was created with maximizing your company’s throughput in mind. Dare we say it? That makes you the most money!
Experience not just being able to deliver on-time, but having excess capacity, moving the bottle neck back to sales to get more orders, or being able to go to your customers and prospects with an unrefusable offer of being able to deliver in ½ the time of your competitors, but at a higher price – the premium for faster, more reliable delivery – or you pay a penalty.