Master Planning and Scheduling

An Essential Guide to Competitive Manufacturing

John F. Proud,Eric Deutsch

• Publisher: Wiley
• Year: 2021
• ISBN:
  9781119809425
• Edition: 4
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Discover the practical, real-world advantages of the Oliver Wight master planning and scheduling methodology.

The newly revised Fourth Edition of Master Planning and Scheduling: An Essential Guide to Competitive Manufacturing delivers a masterful exploration of today's master planning and scheduling techniques, as well as an insightful discussion of the future of the master planning and scheduling processes and profession.

Written in the context of an ever-evolving digital environment and augmented with new and critical information required to implement best practices, the book is a guide for practitioners and leaders on the principles of master planning and scheduling and its application in modern and future work environments.

In this book, readers will learn:

• Insights regarding top-down, bottom-up, and side-to-side integration of business practices in support of a company's strategic direction and tactical deployment
• The critical link between time-phased integrated business planning, master planning, master scheduling, capacity planning, and material planning
• "How-to" details and examples to support master planning and scheduling implementation and enhancements within the company's demand and supply organizations

Master Planning and Scheduling is an indispensable guide for supply chain professionals, planners and schedulers in all functional domains of a business. It also belongs on the bookshelves of any executive or manager who seeks to improve their understanding of best practice planning and scheduling processes and how those processes enable a business to outperform the competition through alignment, integration and synchronization across all functions in an organization.

1
Chaos in Manufacturing

Don't mistake activity for accomplishment.

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A TYPICAL SITUATION IN TODAY'S MANUFACTURING WORLD

• The Place: A typical world‐wide manufacturing company
• The Time: 10:00 a.m.
• The Date: Friday, the last day of the month

What had been a quiet and sporadically busy area three weeks ago has turned into a three‐ring circus. Lift trucks careen through the stockrooms at full tilt, barely avoiding head‐on collisions. Every inch of the shipping department is piled with partially completed products waiting for missing materials and components. Normally neat and orderly work areas now resemble obstacle courses as excess materials clog the aisles.

Outside the supervisor's office, an angry manager berates an expediter, demanding to know why the night shift had run the wrong size product. The expediter shifts his weight from foot to foot as he explains that the required product had been at the top of the hot list—and maybe, just maybe, the night supervisor did not get that revision of this week's list (of which there had already been three).

Over in one of the assembly areas, a worker complains that she has gone as far as she can without the next skid from the processing department. A supervisor moves from worker to worker, asking people to sign up for weekend overtime. A chart on the wall shows that 30 percent of the month's shipments still need to be made.

The cost variance reports that were the burning issue of the manufacturing meetings just two short weeks ago are now buried under a stack of quality control reject reports. Management has temporarily waived the rejects so that needed materials and components can be used to meet this month's numbers.

Off in a corner by the coffee machine, a gray‐haired foreman shakes his head and mumbles: “So this is the manufacturing of the future that the folks in corporate promised. It looks like the manufacturing of the past to me.”

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This scene continues to play itself out in many manufacturing companies today. Worse, like a recurring nightmare, it returns to haunt companies month after month after month. It happens, in part, because many companies still operate in a reactive mode, in which all decisions, priorities, and schedules are driven by the day‐to‐day fluctuations of the marketplace, momentary changes in the plant, and the performance of individual suppliers. It is a cycle of action and reaction, and until companies break the cycle, they will never rid themselves of the end‐of‐the‐month crunch and nightmare.

Breaking the cycle entails four steps:

1. Admitting that problems, some serious, exist, and that the current situation is not healthy for the company or the people who work in it;
2. Identifying the specific problems—not just the symptoms;
3. Determining the cause of the problems;
4. Creating and acting on efficient and effective solutions.

Problems in Manufacturing

Consider again the scenario depicted above, this time through the eyes of the managing director, supply manager, and/or plant manager, who sees that although everyone is attempting to do a conscientious job, the efforts are often misdirected. The use of hot lists to establish and direct production priorities in getting products out the door causes major disruptions and confusion in manufacturing. Schedule changes prompted by these hot lists satisfy some short‐term requirements but throw a monkey wrench into others. Shipment dates are missed, the customers complain to the sales force, and the sales manager vents his anger onto the production manager.

Although there appears to be much work in process, the reality is that most of the work is sitting in queues. In addition, a staggering amount of unplanned overtime and quality problems are mounting. After inventorying the problems, the plant manager begins to look for their underlying causes. The hot lists, he finds, are used because of frequent material and/or part shortages, some of which result from late deliveries from engineering (specifications) and suppliers (materials), late ordering by the company (poor planning), and nonconforming quality of materials actually delivered by manufacturing (inside supplier) or outside suppliers in general. Other material and part shortages result from inaccurate bills‐of‐material (missing items or duplicate items, wrong quantities per, incorrect unit of measure) and inventory record inaccuracies showing materials in stock when they are not.

Schedule change problems often stem from the lack of a priority mechanism, or from following the wrong priorities—such as keeping a machine busy rather than satisfying a customer. (It is not unusual for a company that has just purchased a new piece of expensive equipment to believe that its first priority is to keep the machine running, even if there are no customer orders for the machine's output.)

Missed shipment dates may result from material and part shortages or problems with capacity (undefined or incorrectly defined as well as overloaded and/or underloaded conditions). Some companies are not ever sure what their capacity is, nor do they have a process in place to measure it. In other companies, measuring processes may be available, but capacity plans are not trusted due to suspected accuracy issues.

Additionally, incomplete product builds and materials can sit in queues on the manufacturing floor because of material and/or part shortages, because of the capacity issues just described, or because plant priorities and work flows are driven by an overly‐optimistic demand or sales forecast that is used to communicate priorities to people on the manufacturing floor (driving manufacturing priorities and material purchases with a demand or sales forecast was identified as a bad idea 45 years ago).

Why do so many manufacturing companies today insist on driving their supply chain planning (and execution) with a certain to be inaccurate and constantly changing demand or sales forecast? These forecasts (if the company lets them) can and do instruct the plant to build either too much or too little.

Unplanned schedule changes, missed shipments, material shortages, past‐due supply orders, and so on might not highlight the real problem or problems. These shortcomings might only be the symptoms of the real problems. Figure 1.1 lists a key dozen‐plus symptoms that might cause problems in master planning and scheduling as well as in a company's entire supply chain management function.

Symptoms of Master Planning and Scheduling Problems
Uncontrollable costs	Hot lists
Disruptions on the shop floor	Frequent schedule changes
Late deliveries to customers	Many full‐time expediters
Late deliveries from suppliers	Customer complaints
Unplanned overtime/off‐loading	Many “past due” orders and plans
High work‐in‐process	Long queues
Mismatched inventories	End‐of‐month crunch
Over/underutilized resources	Finger pointing/low morale

Figure 1.1 Symptoms of Master Planning and Scheduling Problems

Does solving the symptoms of a problem or problems solve the problem or problems? In most cases, probably not! However, people in supply chain management and master planning and scheduling try every day to do just that—solve the symptom and expect the problem to go away. This entire book is directed at identifying and providing solutions to problems, not solutions to symptoms of problems. There are a few cases within the pages of this book (e.g., safety stocking) where the authors do suggest techniques used to deal with problem symptoms while the company works on solving the real problem or problems.

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THE INACCURATE FORECAST

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