For the production lines are dark and full of errors…
To kill some time before the next episode of Game of Thrones airs, I’d like to write about the undeniable fact that, at least from what I have seen, not very many SAP using companies connect the plan with the schedule. For all of you who do, I profoundly apologize and ask you to please share your successes in this forum so that we all get a better grip on this dilemma.
In every supply chain there are three phases: the planning phase, usually done by Sales & Operations Planning, where we estimate and try as best as we can to come up with a senseable plan to make and buy in the right quantity at the right place at the right time (the right product).
Then there is the scheduling phase. Here we committ to the plan (usually a shorter time frame). We send out purchase orders to the vendor and turn planned orders into production orders which will be scheduled on the line.
At last there is the actuating phase where things are actually happening. Goods receipts, confirmations, kanban containers are emtied and components are consumed.
Of course, the ultimate goal is to align all three of these phases as close as possible. But if we’re not able to align the plan with the schedule, then there is no way that what’s actually happing is near anything we tried to anticipate.
So… Before you wonder why this stupid SAP system does not help you out, check on the alignment between S&OP and the production schedule for the lines.
Every company I have seen has good service levels, decent inventories and availability. Otherwise they would be out of business. The question is always: how much manual effort do you have to go through to stay in business? And to what degree are you letting SAP do the heavy lifting?
You probably heard it a million times: “don’t work in silos”. Well… don’t do it! Let your planners work with your schedulers so that the line won’t be dark and full of errors but “bright and beautiful and full of hope” (as Melisandre would say).
Here are a few thoughts and ideas on how to improve on that interface:
1. Create a statistical work center for every one of your lines. Make sure the uptime for the line is maintained in it for at least the planning horizon. Then make sure that your planners use that uptime to check their planned numbers for feasability on the line. Im standard S&OP there are great ways to do that.
2. Make sure the schedulers don’t schedule the line for 100% (or even beyond). Variability happens and a line scheduled at capacity has no agility tat all.
3. Classify the products you run on the line and assign them to either MTO, MTS or FTO (finish to order) and stick with it! What that means is that you can’t designate an item to be MTO and then have somebody put a forecast on it or check the availability without replenishment lead time. But you have to know that what’s MTO today might be MTS tomorrow. Perform a classification regularly (in another blog post I mentioned Marc Hoppes Monitors and simulation tools which cover white spots in the SAP functionality)
4. Put KPIs in place that track the difference between plan, schedule and actual and have the planners meet with schedulers to discuss. This is not about blaming each other. After all it is impossible to have a perfect plan (the forecast is always wrong, right). The exception messages in MD06 and MD07 together with the traffic lights provide a beautiful basis for a regular meeting like that; if fully understood and rightly used.
Like with other aspects in life, it is important to talk with each other and to fully understand the tools we have at our disposal. My suggestion is to make sure everybody knows as much as possible about all the features and functions available in SAP and how to fine tune them. But regular meetings are imperative. If the planner does check with the scheduler and vica versa, then the line might be running bright and your production schedulers (usually the people who take the blame) won’t experience any terrors.