We sometimes hear from companies that they know their scheduling should be improved but they are waiting for their company’s big ERP, MRP, or related project. They may say something like:
“Had a long conversation with my boss on what direction we are heading as a company. His/her thoughts were that the implementation of ______ [ERP software] is going to take 3 to 4 years and we don’t have the proper support or depth to handle anything else in this time frame.”
A Flawed Approach
There are some pretty significant disadvantages to this line of thinking, and missed opportunities from putting these efforts on the backburner rather than doing a planning and scheduling project now.
Losing out on Immediate Benefits
The typical scheduling improvement project, using proven methodologies like Product Wheels or Repetitive Flexible Supply (RFS), will improve manufacturing efficiency by 5-30%, and can be accomplished in 3-4 months, with an immediate payback. Nature’s Bounty, a global nutraceutical manufacturer, can attest. With Product Wheels, they saw a 12 point (33%) improvement in Overall Equipment Effectiveness, 34% increase in throughput, and were able to operate at the same capacity on 20% fewer lines…all without additional capital!
How much is 5-30% of manufacturing efficiency worth at your company? For Nature’s Bounty, it amounted to saving 1.5 million dollars annually. Would the new found efficiency allow you to sell more products, service existing customers better, reduce overtime, or delay capital costs? Does the larger ERP or MRP project that’s being implemented over the next several YEARS have any mechanism to improve manufacturing efficiency by this amount? Are its projected savings comparable? How long will it take to realize the savings?
Constraints on the Planner
Typically, one third of a planner’s time is freed up by the implementation of improved scheduling processes. By working on scheduling improvement first, your critical resources will have more time, not less, to work on the larger project. The upfront effort will be recovered before the rollout is complete.
Pave the Way by Uncovering the Gaps
The discipline of a planning and scheduling project is a pre-requisite for successful ERP implementation. Often, we find that much of an enterprise’s planning data is unknown, out of date, or has multiple and conflicting sources. A scheduling project will drive this out and prepare the way for the larger project. Without addressing these inconsistencies and gaps in advance, the implementation phase of the larger project, and it’s time to value, will be extended out even further.
A bit of Forethought will Maximize the Value
It’s likely that scheduling is an afterthought to a large ERP project. But, if not addressed up front, it will need to be addressed post project. While waiting for scheduling to be a focal point, you will have lost 4 years of 5-30% efficiency improvement!
To enhance the value of an ERP project and overall business improvement, it’s worth looking at how your ERP/MRP project will address scheduling:
- What is the project’s vision for scheduling and how scheduling will be done differently? Will it bring the improvement you need?
- Have you walked through the proposed scheduling processes and analyzed the usability of the software to support it?
- Does its scheduling software fit your business?
- Will the schedules it creates increase your manufacturing efficiency?
- Can it properly model your production processes in the necessary detail to be successful?
- Can it create a schedule that the shop floor can follow?
Four Reasons to Act NOW
Sometimes, such as in the case of scheduling improvement projects, quick wins can bring substantial value. There are at least four reasons why you should prioritize doing a scheduling project now:
- It will have an immediate payback.
- It will free up resources for the larger project.
- It will speed the implementation of your ERP, MRP or other project, and increase its likelihood of success.
- It will create a business improvement vision for your ERP/MRP project.
Curious to see what a scheduling improvement project could do for your company? Get started by completing our 10-minute scheduling assessment.
About the Author
Mac Jacob, Head of Product, CPIM, SCOR-P, was a key contributor to building Procter & Gamble’s supply chain, ranked as one of the four best in the world by the Gartner Group. He started in project management, production planning, warehousing, and shipping in a small manufacturing plant, and then became the planning manager for Luvs Diapers for North America. He realized that it was the supply chain systems that were holding back the business and led a project that eventually became P&G’s global SAP/MRP II implementation. At one time or another, he was the business leader, developed the work processes, and wrote the original training materials for most of P&G’s supply chain planning systems.