Supply Chain
Production Scheduling: What it Takes to Truly Succeed
Moving Forward from Excel. But, to What?
My last post emphasized how companies often fall short – and put themselves at risk – when relying on Excel for production scheduling. If you are ready to move off of Excel, adopting Product Wheel or Repetitive Flexible Scheduling (RfS) methods can simplify and structure your scheduling process, increase manufacturing efficiency, and unlock additional manufacturing capacity without additional capital. Both methods get their results from the economies of repetition.
But knowing that there’s a better path forward isn’t enough on its own; to get you the results you want, the business must invest in the processes and technology capabilities required to sustain the gains in the long-term.
Product Wheels Transform Production Scheduling
Of the many production scheduling strategies out there, our team has seen food, pharmaceutical, batch chemicals, consumer goods, and nutraceutical manufacturers experience the most significant benefits with Product Wheel scheduling, including more efficient line changeovers, less overtime, increased Overall Equipment Effectiveness (OEE), higher manufacturing throughput, improved customer service levels, and significant annual savings. Peter King’s recent post and his book on Product Wheels are great resources to further understand the benefits of this type of production scheduling.
I used Product Wheels and Repetitive Flexible Scheduling (RfS) when I was the North American Planner for Luvs Diapers at Procter & Gamble. We adopted the philosophy of producing every item every week, in a repeating sequence that maximized efficiency. We improved setups by working with production crews and enlisting the help of the Tide stock car racing team, which we sponsored, to apply the processes they used to improve pit stops.
By the end of the project, our operating efficiencies increased from around 70% to around 90%. Inventory turns were up three times, we were doing over twice the volume with less inventory, on the same production lines.
Every product, every week may not be attainable in all businesses, but all businesses can benefit from Product Wheels and the economies of repetition.
Is it Really Worth the Hype?
Our experience is that there is initial enthusiasm for developing and implementing Product Wheels. The business benefits of Product Wheels are huge, but the reality is that they can be hard to sustain without supporting business processes and culture. The Gartner Group’s Hype Cycle, and its “Trough of Disillusionment” comes to mind. For any innovation to succeed, there must be commitment from leadership to the concept and process and the will to stay the course when you hit speedbumps.
The good news: by considering a few essential processes, capabilities, and supporting technology, companies can reap the benefits of Product Wheel scheduling and climb their way up the slope of enlightenment.
Prepare for Success with Product Wheels
To sustain Product Wheels, there are three crucial business processes and capabilities that must be in place:
1. Finished product and component inventories must be properly calculated to allow the business to reliably complete the planned sequence, considering the normal variability of demand, supplier delivery performance, and production reliability. Unless the Product Wheel sequence can be reliably completed most of the time, it’s not really a Product Wheel.
2. Despite the best efforts to properly design inventories, there will be unplanned exceptions. The business must learn to react in a systemic way, evaluating whether a change or Wheel break is the right thing to do, placing the emergency or high priority orders where they will have the least impact, and then return to the Product Wheel to complete the remainder of the sequence. Without deliberate reaction, emergencies can cascade making it difficult to get the schedule back on track.
3. There must be a process to assess when business conditions have changed, and a commitment to redesign the Product Wheel when needed. Often, everyone knows that conditions have changed, but the effort for redesign seems too high, and the business decides by default to muddle through, resulting in lost efficiency and unmet business objectives.
The Software: Requirements for Success
I started out scheduling Product Wheels in Lotus 123 (an Excel precursor) but soon realized that there had to be a better way, and we adopted specialized scheduling software to support our strategy.
The right technology can make processes easier to establish and maintain. I’ve found that there are 10 software capabilities required to see the full benefits of Product Wheel scheduling:
1. When scheduling, there should be a method to place new orders into their best position in the Product Wheel sequence while meeting their due date.
2. For the most efficient sequence, high volume or high value products should be produced more frequently than low volume or low value products; therefore, there must be a way to visualize and track multi-cycle wheels, where every product is not made on every cycle.
3. All essential product attributes must be visible when designing and scheduling Product Wheels. In our experience, it typically takes seven or eight product attributes to calculate the best sequence.
4. Changeover costs and time, based on product attributes and production sequence, should be visible and recalculated whenever the schedule is changed.
5. Inventory calculations should consider customer service goals, lot sizing, planning lead time, goods receipt time, demand variability, and production reliability.
6. When calculating lot sizes and production frequencies, changeover costs should be balanced against inventory holding costs, while considering shelf life, customer lead time, and storage constraints.
7. There should be a way to group products that run well together into families.
8. Families of products should be able to be assigned to production lines, with visibility to the required capacity and changeover losses.
9. Consistent master data should be used for Product Wheel design, scheduling, and execution.
10. It must be easy to transfer or activate a completed Product Wheel design to production scheduling.
When you are ready to put a stop to inefficient scheduling or to leave Excel behind, I encourage you to take a closer look at Product Wheels. But don’t stop there – take key process and technology considerations into account to ensure you’re introducing a sustainable approach to achieving your business objectives.
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.