Written by Nathanial Marshall, Practitioner at LI Europe.

You’ve no doubt heard of the 7 Waste’s but What about the 3P’s (Poor Production Planning)- How to self-constrain your factory’s capacity.

Imagine this situation… You have recently booked a family holiday to the South of France. As part of the deal, the travel agent has agreed to organise all the logistics in advance and to confirm details no later than 7 days before the departure date.

You lead a busy life and the day before your trip, you call the travel agent to find they hadn’t arranged anything? How would you feel?

Frustrated? Anxious? Worried? Angry?  These would certainly be some of my reactions…

On the other side of the equation, the travel agent is now in a state of panic trying to make last minute arrangements to ensure your trip goes smoothly. They are no doubt going through similar emotions to you. Worried and anxious about the loss of future sales, revenue, complaints, maybe even bad press…

Now translate this to a manufacturing environment.

You are the customer, threatening to take your business elsewhere if your pre-agreed demands are not met.

The factory management is the travel agent trying to please a customer.

Extrapolate that situation to numerous customers with varied and complex packages (SKU’s).  Add in a sales department, which say all customers are priority yet fail to provide you with accurate forecasts.  Then include your production lines, which are currently going through a period of unreliability.

In the middle is the production scheduler/planner trying to satisfy everyone and cram as much volume into the constrained factory as possible?

It is not unusual to get into a vicious cycle of trying to make a smaller amount of everything, on a more frequent basis than you know is effective and fail to deliver consistently to all customers.  Customer services levels fall, revenue is lost whilst cost to manufacture increases.

Recently I was working with a medium size business that had an increase in demand 30% higher than forecast and became capacity constrained.  Stock levels had been depleted to a minimum and the factory was scheduling on a daily basis with no medium term supply plan. Significant amounts of overtime were used to make up the shortfall and despite this customer service levels fell significantly.

Working with the account managers, planners and schedulers, we created a planning model which scheduled the supply in rolling 6 and 12 week buckets. It ensured products were manufactured in an optimised run order and distinct cycles based on agreed max/min levels whilst accounting for forecast volatility and shelf life. This in turn increased the average run length for each SKU, minimised changeover time and increased the factory’s capacity by 10%.  As a result, when the summer peak production period came around, stock levels were maintained, customer services levels were high and the business was in a more stable position.

If you’re concerned about your factory’s capacity and anxious about ability to meet customer demand.  Get in touch and see if we can support you to deliver improvements. Visit www.li-europe.com and explore whether or not there is a fit for you.