Deconstructing On-Time Manufacturing Performance

Far too often, manufacturers find themselves behind the eight ball with deadlines looming on the horizon.  Managers end up relying on overtime to complete and fulfill orders.  In some cases, production schedulers modify their shop calendars to permanently include Saturdays and Sundays as working days.  Capacity planning exercises consistently fail to identify a need for additional staffing or capital investment, but nevertheless product fails to get shipped on time.

Let's take a moment to think about what conditions are necessary to ship customer orders on time and let's do it working backwards from the shipping event:

1. To ship on time, production orders must be completed on time
2. To complete production orders on time, the individual operations within the production orders must be completed on time
3. To complete operations on time, the operations must be started on time

So what's the secret to starting operations on time?  The answer lies in establishing job priorities that have two essential characteristics:  First, they must a direct relationship to the customer order due dates and second, the stability of the schedule must be preserved so that priorities do not waver in the wind.  The second requirement is really the most important one since a production schedule that acts as an oscillator can only result in increased work-in-process (WIP) inventory, longer lead times, high overtime costs, and missed due dates.

On-time performance is therefore something that must be executed at every level of the manufacturing process.  However, the predicate for such efficient operation is critical.  Due dates established early upon the acceptance of new work that infer the relative priorities between competing jobs are essential for making on-time performance possible in the first place.  Stability in the production schedule enables this.

We can then conclude that a stable production schedule consisting of customer-driven due dates is the single most important element of a manufacturing company's planning system.

The Lean MRP production scheduling and control methodology is is a cornerstone of Altemir Consulting's practice that ensures stable production schedules and lean shop floor execution using your existing ERP functionality.