A Two-Letter Word Will Change The Way You Look At Scheduling

If production scheduling is the answer, what was the question?

Here is the classic question in manufacturing: “Which products should we make, when should we make them and in what quantity?”

For supply chain and fulfillment we might add: “Where should we stock them and to where should we ship them?”

In this view, production scheduling answers a question about execution.  “What to make?”  It helps turn the operations plan into reality.

If you’re satisfied with this answer, then you might be missing something.  A small, two-letter word that will change the way you look at scheduling.

The word you’re looking for is *IF*.

When “What..?” becomes “What If..?  planning and scheduling become a much more important tool for decision-making in business.  And “What-If” can help resolve an age-old conflict between planning and execution.

Should Never Have Called It “Master Production Scheduling”

In lean manufacturing circles, scheduling is a dirty word.  Customer demand is inherently unpredictable.  How can you expect to decide what to make ahead of time and put it in a schedule? 

In this demand driven world, the focus should be to reduce response time down as low as you can.  Then connect production to the point of customer replenishment and get out of the way.

Make-to-stock or make-to-order.  Doesn’t matter.  If you make-to-stock, then the point of replenishment is a stocking point downstream.  As close as we can to true consumer demand.

In hindsight,  it was a  mistake for Oliver Wight to call the input to MRP “Master Production Scheduling”.  The word “Schedule” implies sequence and a level of detail at the event.  The Master Production Schedule is an aggregate total many weeks out and carries no information about sequence.

The result of this MRP misnomer is that scheduling got tainted with a top-down, forecast-push model of manufacturing.  A model that is no longer relevant to the modern world.

Let us then reclaim the term “production scheduling” and apply it where is it still useful:  A short range sequence of work orders to be fed into production.

Visual versus Planning-Led Execution

The production schedule tells you what to make, in what sequence and quantity.  It should also tell you when each of those orders will finish.  This calculation needs to take both production load (run-time and setup-time) and queue-time into account.

Production scheduling is finite by its nature.  A system can’t tell you when a work order will start without first calculating when its dependencies will finish.

So, production scheduling answers a “what” and a “when” question from the shop floor.  What work order should I make next, when will it finish and what should I do after that.

Even here, there is a conflict with manufacturing best practice.  In a well-managed shop, the operators do not rely on paper-based work order schedules to tell them what to do.

If you teach people to chase paper, then you are drawing their attention to the wrong place.   Wherever you might be in the factory, the most important place is where the value is added; the most critical direction is towards the customer.

Plans and schedules get in the way and slow down the response of manufacturing to customer demand.

Of course, there are limits to a visual factory approach.  Not all factories can implement Kanban for all material and production.  Sometimes production execution needs more information in  than a card or an empty container.  Electronic Kanban and MES systems can get rid of paper.  When implemented correctly, there are many effective ways to tie the schedule into a visual factory concept.

Nevertheless, a well-managed factory is always going to respond faster than the most powerful scheduling computer.

Scheduling for Execution?  You’re Missing The Point

This discussion on execution is missing something.  You can gain great value from a production scheduling system, without ever using it to feed production execution.

Business is about making decisions.  Good business tools support decision-making.   No manager has ever become successful by being told what to do by a computer.

Good execution depends on rules.  The right rules need to be tested, refined and discovered.  They are unique for every business.  They leverage strengths and factor constraints.  They are built on a deep understanding of the way a company creates value.

The right rules are not created in a vacuum.  Certainty is built on a foundation of testing.  Rules tested against real world scenarios and then rated for performance.

Of course, testing has a cost.  If you have only one chance to get it right, then you’d better get the testing done before you execute.

The production scheduling system does much more than just tell you WHAT to make.  It can tell you WHAT you could make IF you accepted this new order?  WHAT you can do IF this purchase order is late?  WHAT would be the new completion time IF you added an over-time shift?

For every executed schedule, there are thousands of others that were not.  How did you select the schedule that was executed?  Was it the first one out of the scheduler?  Was it pulled out of a hat?  Or did you test different rules and priorities to ensure that it was the one that generated the best results?

Don’t believe the vendor that tells you that the scheduling system will optimize production.  I have visited over 800 factories on four continents over the last ten years.  I’ve seen the good, the bad and the ugly.  None of the best performers ever relied on a software algorithm to deliver operational excellence.  It came from the managers applying the right rules, making good decisions.  Always be testing.

No Plan Survives Contact with the Market

Military officers plan their operations knowing that no plan survives contact with the enemy.  The world has too many variables and uncertainties.  This applies as much to supply chain as it does to military.  The process of planning and scheduling should never only consider a single outcome.

Every day we get new information about how the future will be.  Today’s decisions can impact plans made based on yesterday’s decisions.  Customer demand is changing daily.  Everything is connected to everything else.

Your customer is on the phone.  She wants to know if you can deliver a big order by next Tuesday.  If you can, she will place it with you.  If not, she will have to look somewhere else.

If you think you can do it, then accept the order and keep your promise.  If you can’t, then give her an alternative date.  It may be good enough- we know that customers pad their desired dates with time buffers. 

Now, you had better keep your promise.  If it came from crossed fingers then I suspect that other orders are going to suffer as they get pushed to one side.  Tomorrow, her order is going to be amongst those that get pushed aside for the next urgent call.

Capable-To-Promise and the New Service Standard

Capable-to-Promise means more than being capable.  Being competitive increasingly means making and keeping promises at the margin.  A production scheduling system should support good promise-making. 

Run a production schedule with the order included, and then see how it will impact other orders.  If you have pull scheduling (schedule-to) you can meet all those existing due-dates and see if all orders are still due to start in the future.

You will need a scheduling system that can run unhooked from the MRP system.  If you have to raise a transaction to answer What-If then your powers of prediction are going to be seriously curtailed .

Scheduling can support production execution.  But it goes much further than that.  Start adding that *IF* to the *WHAT* and it will practice intelligent decision-making in the operation.

Visit our download page for an example of an integrated scheduling system.  Replace the data with some of your own and run your own What-If scenarios. 

Leave a comment and tell us how important predictability is for your business.

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