Untapped Capacity: Why You Should Prioritize Planning and Scheduling
Noel Peberdy, founder and CEO of Phenix Planning and Scheduling, recently sat down to share his perspective on one of the primary challenges manufacturing companies are experiencing today. Find out why it’s essential for companies to strengthen the connection between supply planning and production scheduling and execution, and get practical insight on how to move forward with increasing capacity by as much as 30% within just 3-6 months.
Andrea Sikorski: Andrea Sikorski here. I am thrilled to have Noel Peberdy with us today. Thanks so much for joining me.
I think we can all agree that a significant amount of change has happened over the past year and companies in nearly every industry have had to quickly adapt to stay ahead of the competition. Noel, you’ve spent many years working with a wide range of manufacturing companies. What have you been hearing from customers recently? What are you hearing as perhaps the most significant issue in process manufacturing today?
Noel Peberdy: Thanks Andrea, it’s great to be here again with you and with all our listeners. Certainly, there is lots of searching discussion in the wake of COVID, but frankly COVID has, in most cases, just accelerated and exacerbated existing problems.
I work mainly with process companies who often have high product complexity, complex manufacturing, lots of demand and supply volatility, and they have really felt the effects of COVID.
What I want to do today is focus on one of the primary challenges in dealing with those factors, which, in my mind is at the nexus between supply chain on the one side and the production plant on the other side. And specifically, the interchange between supply planning and production scheduling. By closing this gap between supply planning and production scheduling and production, it’s not unusual in my experience to get an effective increase in plant capacity of up to 30% of current production output.
And if it’s done properly, improving planning and scheduling can, you know, reduce changeover losses, which is the primary source of that additional capacity, but also get rid of the firefighting and stabilize operations. And of course, that additional capacity that gets released helps to provide the wiggle room to deal with volatility.
Andrea Sikorski: Okay, can you tell me a little bit more about that?
Noel Peberdy: Sure, so, a few points:
Firstly, companies spend a lot of money on planning process and systems at the supply chain level. And yet, at the plant level, plant scheduling seems to be neglected. Processes are rudimentary. More often than not, the scheduler is the hero who’s expected to pull the cat out of the bag each week. And most typically, even in large global companies, they use Excel for scheduling.
So here we’ve got the production plant, which is the most expensive asset in the whole supply chain in respect of capital and cost of goods, needing to be optimized, given its role, and also being at the heart of the supply chain, it needs to be stable and reliable from a practical operations point of view.
So, we’ve got planning systems that use aggregate models of production that are not intended or expected to optimize plant operations and then you’ve got a mission critical scheduling process that’s dependent on individuals and Excel.
You know, it’s hardly any surprise that the plant schedules are far from optimal as a result of that. And ask any production supervisor and my guess is they’ll confirm this. There’s a lot of stress in production and practical inefficient schedules are a primary cause.
Andrea Sikorski: Okay, and so what does this mean for companies, then?
Noel Peberdy: Well, I mean the bottom line is these plants run way below capacity. And as I‘ve said, as much as 30% is wasted. But to compound that, poor schedules coupled with volatility guarantees there are going to be frequent schedule changes so plant operations get caught in the cycle of firefighting which results in unpredictable and inefficient supply.
Andrea Sikorski: Now, are you saying that supply chain leaders are essentially settling for running plants and supply chains well below capacity? I mean, I assume that that would have an impact on their supply chain volatility.
Noel Peberdy: Absolutely, and it really shouldn’t be that way.
Andrea Sikorski: Mm hmm. So what would you recommend to them?
Noel Peberdy: Well, the first thing is we’ve got to think about planning and scheduling in a different way.
The source of the problem I‘ve described is, I think, attributable to the absence of a framework that goes across planning scheduling operations that enables planning to deliver winning weekly plans to the scheduler that, in turn, enables the scheduler to hand a winning daily schedule to plant operations, so that at the end of the day, things run smoothly.
Some examples of the frameworks I‘m thinking of are Repetitive Flexible Supply, the work of Ian Glenday and others, Rhythm Wheels and Cycle Wheels take a different approach, also with good results. But I think Peter King’s work on Product Wheels is the most practical and accessible way to make the most impact quickly and then sustain it.
All of these frameworks are focused on reducing the biggest waste in complex process manufacturing plants, namely the changeover time, and doing it in a way that improves both stability and agility.
Andrea Sikorski: That’s really interesting. And so how should supply chain leaders apply these insights and make them into a reality?
Noel Peberdy: Well, I think, face the problem head on.
I would challenge a multi–disciplinary team, including planning, scheduling, plant operations, continuous improvement and others to go after that wasted capacity like I‘ve described above. And it should be possible to make significant, sustainable improvements without spending capital, quickly – so within three to six months.
Andrea Sikorski: Excellent. Noel, before we wrap up, and if you’re wanting our listeners to have one key takeaway, one thing that they choose to share with their colleagues what would it be?
Noel Peberdy: I‘d recommend a three-step approach. First, is to quantify the impact of the problem I‘ve described. It comes down to: what are unnecessary changeovers and their knock–on effects costing you? I expect you‘ll be surprised!
To do this, put a small cross–functional team together that looks at the kinds of frameworks described earlier, and then develop a plan to quickly increase capacity within three to six months.
And, of course I‘d love to talk with any of you who want more pointers, or if you have alternative thoughts.
Andrea Sikorski: That’s great. Thanks very much Noel. You know, I‘d really like to explore this a bit further and get more specific and more practical on how companies can move forward with changing the way that they plan and the way that they schedule, and I look forward to delving into that a little bit more when we speak next.
Thanks also to our listeners for taking the time – much appreciated!
Noel Peberdy: Good, thanks Andrea and thanks to our listeners.
Interested to learn more? Contact us at firstname.lastname@example.org to talk about how to get your plant on track to seeing a 30% increase in throughput!
Noel Peberdy, Founder and CEO, has worked with world-class thought leaders over 30+ years to deliver transformative results in the food and beverage, life sciences, and mining and metal manufacturing industries. Noel’s unique strength is to connect the dots across traditional silos in manufacturing, supply chain, and new product development, with a recent focus on revolutionizing supply chain planning and plant scheduling by integrating people, process, data, and technology.