Tuesday, 10 December 2013

Are Your Production Peaks Hidden?

One of the biggest reasons that a business delivers late is due to an uneven order book. Huge peaks in some weeks and next to nothing in other weeks. Getting a grip over this situation can make a massive difference in your quest for consistent on time delivery (without the headache).

There are usually two steps to resolving this situation; balancing out what you already have and stopping it from happening again.

The first step, re-balancing your order book, can be straightforward or a large task, depending on the type of work you produce and the complexity of the process it has to go through in order to complete the work. Whatever situation you are in it is essential that you complete this exercise to its logical completion. Many businesses re-balance the first few weeks (which contains overdue orders that have built up over time) and leave it at that. A few more weeks down the line and these businesses are back to where they have started (they just moved the biggest peak back a few weeks and they have hit it again).

BEWARE: If you run a MRP / ERP system using finite scheduling you may not be able to see these peaks easily!

Make sure that you can see the peaks in demand and then devise a process to re-balance your order book, moving the work* out until you reach available capacity in your schedule.

The second step mentioned above was stopping this situation from happening again. The contract review process (when you have won the work, but haven't scheduled it) is a prime driver for managing this process. Whether you have loading / 'what if' tools at your disposal, or you need to use capacity charts (or something similar) you need to make sure that you have enough capacity to deal with the work that you are about to take on. This single step in the order fulfillment process can make all the difference between delivering late and delivering on time (and within budget). This step in the process is an one that I see decay rapidly in many businesses, sentencing the business to go through the loop of re-balancing and re-establishing their contract review process.

So, the point of this post? Find the peaks in your order book and reschedule them (forwards or backwards) so that your production team can do what they do best. Then make sure that your supporting processes work well enough that you can prevent this situation for re-occurring in the future. Keep a look out for these problems looming in the horizon; if you can't see the peaks (or you don't look for them) then you can't manage them effectively.

Giles Johnston
Author of 'Business Process Re-Engineering', a practical plan to improve business performance.

* Of course there are other levers you can pull such as overtime, sub-contracting, re-deployment, agency workers etc... before you have to move the order book items. Determining the correct course of action is up to you!

C'mon! Just write the SOP!