Most diversified industrial manufacturing businesses desire to be “Lean” in order to improve on-time performance, reduce cost and speed time-to-market. Lean Manufacturing refers to the Toyota Production System (TPS), the four pillars of which are single piece flow, minimal setups, mistake-proof processing and kanban (see Lean and Bibliography). The concepts of Lean have expanded into the office, where functional teams perform business processes, most of which focus on the execution of customer orders through the business system (usually an ERP).
To be lean in the office, we can reduce the complexity to eight fundamental disciplines of order execution:
1. Manage Master Data
– Usage Type, ABC Code, Lead Time, Order Minimum, Order Multiple, Seed Stock
Master Data includes trading partners and products. Usually this information is stored in an ERP as Customers, Vendors, Items, Routings and Bills of Material. While all of these records must be accurately maintained to achieve maximum utility from the system, the six fields above from the Item (aka Material, Part, Product) Master drive material planning and execution the most. A good business system with a robust PFEP (Plan for Every Part) engine will provide recommended values for these fields based on transaction history and current demand. In a lean environment, a single human planner can maintain these values for an entire facility, no matter how large it is, or how many parts there are. The key is to properly configure the PFEP engine in the system, and manage exceptions only.
2. Manage Sales Orders
– New Orders: Acknowledge achievable promise dates
– Acknowledged Orders: Maintain accurate Scheduled Ship dates. If the schedule is in jeopardy,
a) Request increased throughput on constrained resource
b) Request improved critical P.O. Promise date
c) Reschedule or Swap the Sales Order Schedule Ship date with another
3. Manage Work Centers
a) Meet the Market – Make sure the 7-Day Avg Output is equal to or slightly above the Market Rate
b) Minimize Idle Queue – Find any idle jobs and get them completed
c) Overload – Wherever a resource is booked above 90%, take action to rebalance supply with demand:
1) Add Overtime
2) Add a Shift
3) Offload to other resource
d) Unachievable Plan – Make sure the production plan (Earned Hours / Day) is realistic, not “wishful thinking.”
4. Create Work Orders
– Order everything inside the release window, nothing outside of it. The fewer open work orders there are, the less maintenance is required.
5. Create Purchase Orders
– Order everything inside the release window, nothing outside of it.
6. Release Work Orders
– Operator release on WIP Completion
– Smart Release Rules constrain WIP, prevent Idle Queue, enforce Schedule
7. Manage Purchase Orders
– Past Due Promise dates
8. Manage Work Orders
– BOM changes, Transaction Errors
– Cancel messages