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Production Scheduling Is Broken, and It Needs to Change

March 3, 2020

Despite the many production scheduling solutions available, manufacturers continue to struggle with delayed work orders and procuring materials at the right time. Leadership pressures shop floor managers to “plan,” but still on-time delivery challenges persist despite having a production schedule in play.

The solution isn’t to implement yet another scheduling system that isn’t aligned with the reality on the shop floor — it’s to shift the underlying mindset on how you manage production to help the shop floor take control of manufacturing operations.

Managing Shop Floor Production Is Hard

Managing production involves a variety of obstacles that delay jobs or bleed the bottom line. Unfortunately, traditional ERP and advanced planning and scheduling (APS) software often create more issues than they solve, and that’s because they’re built on an outdated and flawed methodology.

Backwards scheduling systems are based upon the work order due date; these systems essentially determine how the last operation can be performed on the day before the job is due. This leaves almost no buffer for variability on the shop floor, such as resource constraints or bottlenecks at a single work center, which can lead to severe production delays. Simply releasing jobs sooner to give them more time is not the answer.

Forward scheduling systems send as many orders into WIP as possible, causing jobs to back up and making it very difficult to determine true priorities. This also leads manufacturers to invest in materials early, sometimes too early: If they buy materials for a job that ends up sitting around in WIP, this ties up cash flow.

Both of these production scheduling models reduce a shop manager’s visibility into in-progress orders, especially once the jobs are a few steps into production. This can make manufacturers feel powerless when it comes to reducing backlog, shortening lead times, and improving on-time delivery.

The Disconnect between Scheduling and Reality

Many manufacturers turn to traditional ERP software to manage their production scheduling, and become frustrated when they still experience order delays and cash flow management issues. Others simply refuse to implement it because the software can’t match the knowledge on the shop floor that their team has amassed from years of hands-on experience, so they default to using whiteboards, spreadsheets, and other manual processes.

These problems aren’t due to errors in implementation, but rather the foundation of the scheduling model itself. Traditional ERP-based scheduling software was built to perform capacity-loading exercises after the material requirements planning (MRP) program ran in an attempt to answer, “can we build all the orders that the MRP told us we’re going to need to satisfy our backlog and forecast?”

The first answer, rough-cut or infinite capacity planning, isn’t powerful enough to consider limited resources, so it assumes the shop floor has unlimited time, materials, and people needed to complete a job. The second answer, finite capacity scheduling, does consider these limitations while loading capacity in a backward and/or forward manner. While a better scheduling solution than its predecessor, finite scheduling is still fundamentally a capacity-loading algorithm and does not reflect how execution actually happens on the shop floor. The end result is a disconnect between the dispatch list produced versus what the folks in the shop know to be the true priorities. 

This design is also why ERP systems struggle to deal with variability in the middle of production, such as a sudden personnel absence or an expedited customer order that needs to be dropped in, out of sequence. ERPs also have trouble covering the complexities of assemblies and subassemblies and the order in which they must be manufactured to hit the promised delivery date.

Simply put, ERP and traditional capacity-loading scheduling can’t give manufacturers a reliable way to prioritize work based on their current resources, and it’s because the real-time visibility shops need to respond to shifts in production disappears once orders are in process.

A Better Way to Manage Production

Fortunately, there’s a better way to manage manufacturing production, and it starts with a critical shift from production scheduling to enabling better flow. Whether you’re a job shop or a make-to-stock (MTS) manufacturer, speeding up the flow of materials through any type of manufacturing environment is critical to successful production.

By accelerating the flow of actionable information directly to where the work happens, the people on your shop floor can make critical decisions that will increase both the speed of materials and execution.

To promote better flow, shop floor managers need to focus on three main principles:

  1. Anticipate and account for variability on the shop floor (stuff happens, can your scheduling system adjust your plan in real-time once it does?)
  2. Control your WIP (flooding WIP confuses true priorities and increases the chance that the “wrong” job will be selected to work on next)
  3. Prioritize what must be done next to deliver on-time (as opposed to prioritizing solely based on due date)

The third principle is especially challenging for manufacturers, as due-date is the default method for prioritizing work that most scheduling systems default to. The sooner the end date, the higher priority, which ignores factors that actually determine whether a job is in jeopardy.

For example, a job that’s due in eight weeks might be more at risk of being late than an order that’s due in a week or two simply because of the job’s complexity (i.e., it involves more operations, outside processing, etc.).

Without visibility into what’s actually happening once a job is in process, your shop floor is always executing against a schedule that is out of sync with reality.

The answer for manufacturers isn’t better scheduling; it’s gaining the visibility your shop floor needs to execute the right calls based on experience, knowledge, and a clear picture of real-time conditions once the work has begun.

To learn how to drastically improve the flow of information and materials to increase the speed of execution in your shop, request a consultation with the production planning and execution experts at LillyWorks.

Mark Lilly

As President and CEO of LillyWorks, Mark Lilly and his world-class team have been developing technology solutions that help manufacturers deliver better since 1960.

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