Planning Optimisation
February 27, 2009 by samirshah
Why Optimise Planning?
Traditional view of industry - Push the products out into the market
- - Keep producing even when there is no demand
- - Keep the factory running all the time
- - Keep lots of stock
Lean approach - Demand from the market pulls products
- - Only produce what you can sell
- - Don’t produce to hold in stock
- - Keep minimum/no stock levels
“To keep a balance between reducing overall warehousing costs and be able to satisfy varying demand (e.g. seasonal) as well as maximise availability at the production facility companies utilise both the push and pull approach”
For this reason it is necessary to pay particular importance to optimising production planning.
There have been conflicting views between the corporate strategy for planning and the site strategy for what should be planned. The reason for this is related to how the departments are measured and targeted. At the corporate level it is all about reducing cost and increasing the flexibility to deliver where as at site level it is all about maximising performance measures such as OEE. This leads to very little synergy and a lot of animosity between the corporate planning department and the site production department.
The ultimate aim should be to deliver the products at the right time, at the right price and at the required quality to the customer.
At the corporate level there needs to be an understanding about the plant/line capability. This is the actual delivery capacity of the line. The key element to understand is that if the number of products to be made is large the actual availability to produce will be low reducing the actual capacity due to the number of changeovers required. To have the maximum capacity available, there needs to be a strategy to have as many long runs of product as possible and minimise need of the changeovers as much as possible.
At the site level, there needs to be an understanding that there are requirements to produce small runs of certain products due to their demand profile and to keep the warehousing costs low. Once the amount of products to be made is received from central planning, the site scheduling department needs to look at scheduling the production runs that will maximise the line availability by looking at combining production runs that are required at different times and by looking at minimising changeover times by scheduling product runs that require minimum operations (therefore time) to changeover. The site can look at ways to optimise their changeovers by implementing quick changeover programmes such as SMED and by looking at technology and innovation to eliminate changeovers all together between different product runs.
Therefore to summarise:
- Understand what product types are runners, repeaters and strangers - Please read an article on “The Reflective Supply Chain in Manufacturing” By John Hicks and Patrick Lee
- Decide on minimum buffer (stock) quantity for each product type
- Determine production batch size of each when minimum stock quantity is reached - this may vary on future demand and seasonality
- Put together a production plan to make products that have reached their minimum stock quantity - decide between product mix and volume required by taking into account plant/line capability with a view to maximise plant/line availability
Standard Cost = Hidden Waste
February 17, 2009 by adrianpask
- How tolerant are you to waste? Wasted time, wasted materials, wasted energy, wasted movement?
- How aware are you of the wastes that exist every day in your factory preventing you from improviding productivity?
- What wastes do you accidentally or deliberately turn a blind eye to?
- Which of your measures actively hide waste so that you can’t, or don’t have to, see them?
Have you answered something similar to: “Very”, “Totally”, “well none of course”, and “you’re joking right?” to the questions above? I would happily lay a bet that in most factories in the UK that there are losses which are not only ignored, they’re accepted
When my day job involved working full time in a factory i would often be lucky enough to take visitors round the factory on tours. Many of my colleagues would see this as a pain in the rear, taking them away from the day job….especially when it was a tour group of children. Have you ever noticed how kids have an awesome talent for pointed out the obvious?
The joy of stupid questions:
Some of the younger student groups would have a habit of asking ‘really stupid/obvious questions’, like “how do i wear earplugs”, “what is the secret formula of your product”, “do you like hair nets”, “what are the hair nets for”, “if i shaved my head would i need a hair net”…infact a very large number of questions would be related to hair nets and ear plugs. Sometimes, they would also ask questions that would massively supporting our continuous improvement drive: questions like “why is there product on the floor over there”, “should that pipe be dripping”, “doesn’t that man get tired lifting that”, “why does that machine keep stopping” etc.
Blind to your losses
Have you ever found that sometimes the opportunities to improve staring you in the face and yet you can’t see them? I believe that in many cases as we become familiar with an environment we become blind to elements of it that we may want to improve. In many cases we not only become blind to the opportunity, we also build the loss into how we measure our performance, we normalize it and ensure that every new member of the team is trained to ignore it also.
Standard Allocations - prescribed blindness
Whenever i visit a site now if i ever hear the words “standard” and “cost” i know that i’m about to enter into a challenging conversation because for me “standard cost” = “hidden or accepted waste”.
We may come across “standard waste costs”, “standard speed”, “standard changeover time”, “standard wage allocation”….and usually the key metric is then how many percentage points away from the standard the site is.
E.g.
My site has 2% waste…..over our standard…..of 15%. THIS IS A TOTAL LOSS OF 17% HIDDEN AS 2% !
My OEE is 83%….excluding changeovers….of 6hr every week.
My changeover was completed in 10min under standard time of 60min. Which means that it’s okay not to improve….but what if a sister line is running the same event in 20min?
So here’s my point = if you have any conversations with involve the words “standard” “allocated” or “budgeted” when referring to waste or output then you’re hiding from the truth. How can you improve if you don’t know how well you’re performing?
