March 1996 € Volume 6 € No. 3

Scheduling: A Question of Balance

By Julie Fraser

With comprehensive modeling and what-if capability, manufacturing synchronization systems can plan and sequence plant operations-making the trade-offs to best match changing market demand and business goals.

Restructuring-both in global markets and internal to corporations-is forcing dramatic change in how we must conduct business. Concurrent pressures from stockholders, customers and market competition are squeezing manufacturing plants in terms of efficiency and profitability.

A few examples:

These pressures create a set of common goals for manufacturing in the 1990s. Every manufacturer strives to meet performance targets including higher plant throughput, better customer service, higher product variety, faster cycle times, lower inventory levels, increased return on assets and higher profits. This really translates to an enterprise's ability to demonstrate agility. Unfortunately, the logical goals of agility create direct conflicts in day-to-day operations.

How far can a plant drop inventories and still ensure quick customer response? How low can machine utilization go in exchange for a wide range of niche products? To what point will market share gains make up for the lost margins of lower prices? The factors that allow a plant to meet its various goals are all tightly interrelated-and at odds. To capture a leading market position, nearly every manufacturer must search for the right delicate balance in answering these questions.

In the past, manufacturers might have chosen a single, strong differentiator on which to compete-like being the leader in quality or features, the low cost producer, or the speediest to deliver. Those same strategies today are more multifaceted-in addition to the single competitive advantage, the plant must also have a very high level of performance in every aspect to even be in the running.

These are the conflicts that production and inventory control (P&IC) professionals can play a role in, provided they have the right information. As the issues become more complex and critical to company success, it's increasingly important to have a good view of the impact each decision has on the progress toward other goals.


Scheduling redefined
It is in this competitive environment of the 1990s that scheduling has moved into the limelight. Scheduling is not a new concept. So why now?

Several reasons stand out: The primary reason why scheduling is such a hot topic is that, when done right, it can give you not only the visibility to analyze these trade-offs but also the levers to run the plant according to the balance you choose. Manufacturers spend plenty of time, effort and money to create good plans. However, most production and inventory control professionals realize that their plans are never quite followed on the plant floor. From the other side, plant managers and supervisors claim that they cannot run the plant according to those plans.

Both sides are usually correct. Scheduling means ensuring plant resources are working on the right thing at the right time to fulfill customer orders. However, it is not typically a strong feature of either ERP systems or shop floor systems, such as manufacturing execution systems (MES). Solid, smart scheduling that ensures customer responsiveness while still allowing for high profits is even less common. Only in the past few years have software solutions that create truly feasible production schedules become available. Currently, those software products originate from companies totally focused on scheduling.

In the manufacturing software architecture, scheduling or manufacturing synchronization bridges the gap between the planning system and the shop floor system. Think about the ERP or MRP II system's function: It provides planning and management information by keeping current on all transactions from the market and purchasing. Plant floor manufacturing execution systems, man-machine interfaces and data collection systems track what's actually happening in the production plant.

Scheduling systems must synchronize the market demand and materials data from the planning system with current plant status data from the plant floor systems. However, a truly functional scheduler is not a transaction processing system. It's an "optimizing" engine that executes plans as efficiently as possible in the production facilities.

It is not far-fetched that a software program could link actual plant operations to market and customer demand. Many manufacturers tried scheduling of one type or another in the past and found it either a waste of money or very frustrating at the least. However, products are available today that truly provide visibility, decision support capabilities and realistic, executable schedules for all resources in the plant. These systems are radically different from the bulk of the manufacturing software used now; these systems leverage the investment in backbone transaction systems.


What to Look For in a Scheduler
Scheduling's purpose is to tell who and what should be working on which task at a given time. At the detailed production level, good scheduling software can indicate how to best deploy constrained plant resources. This is no easy feat, considering how many possibilities there are in most plants for combining people, machines, tools and materials at any given moment.

Caveat emptor: Many products called scheduling are actually advanced planning tools that will help with some problems, but won't create a task list that the plant can actually execute. Some others have too simplistic a logic to represent a production facility.

For example: To generate schedules the plant can follow, a system must include the plant's business rules, a model of how the plant operates, a capability to try various scenarios, and logic to optimize the deployment of every resource. In short, it sequences a to-do or dispatch list for every person, machine, tool, material and subproduct in the facility. Systems that do not work this way certainly will keep production from proceeding as planned.

While scheduling leverages the ERP database, it requires more detailed data than planning systems need. Remember, scheduling focuses on how to best apply resources-people, machines, tools and materials-to tasks. The system must recognize that factories are actually collections of interdependent resources with:
Coordination and timing
Synchronization is a combination of coordination and timing. A scheduling system that can take both of these into account is performing manufacturing synchronization. With comprehensive modeling and what-if capability, manufacturing synchronization systems can time and sequence plant operations-making the trade-offs to best match changing market demand and business goals.

Let's look at four of the common goals of manufacturing and how they interact, shown graphically. 1. Reducing WIP inventories
2. Increasing machine utilization
3. Decreasing production cycle times
4. Improving customer due date reliability Goal 1 appears on the X or horizontal axis, with the other three on the Y or vertical axis, one at a time. Figure 1 shows that when it's achieving the goal of highly utilized machines, the plant also generates high WIP. Starting at the left end of the curve, if only one part is going through the entire plant in a week, machine utilization will be very low. As soon as a few orders try to go through at the same time, WIP starts to climb because orders will compete for the same resources. Before too long, getting better machine utilization results in substantial WIP queues.

Figure 1


Figure 2 illustrates how achieving shorter production cycle times actually works to reduce WIP. Most of production cycle time is made up of queue time and waiting, so the less time an order spends in the plant, the less WIP you will have. So these two goals generate positive synergy.

Figure 2


Figure 3 shows that reliably delivering on the customer due date generally means increased WIP. While performance to one goal hurts progress toward the other, as in Figure 1, the curve is different. Here, WIP goes up only gradually until the plant really starts to push for 100 percent on-time delivery. Getting that last little bit of order due date reliability from the plant demands piling up safety stock, and often finished or semi-finished goods.

Figure 3


So what does all of this illustrate? Business goals are at odds and a company must make trade-offs between them. However, the situation is even more complex than each of these figures indicates. In fact, all four goals are interdependent and at odds. The challenge for scheduling in the plant is to find the ideal point on all of the curves simultaneously-to find the delicate balance that maximizes competitiveness.

Figure 4 shows that manufacturing synchronization gives that ability to move the bar and see the resulting tradeoffs.

Figure 4


Detailed scheduling and synchronization makes these choices visible and allows the plant to run according to a balance between these business rules. So synchronization can reduce overall manufacturing cycle times, lower inventory levels, and improve operations' profitability, knowing the tradeoffs in each.

How can a software system embody that? Scheduling actually does more than organize and track data about a manufacturing enterprise. Transaction-oriented ERP systems organize large quantities of data so that people can make better decisions. The built-in rules, models and decision-tree logic of manufacturing synchronization software are based on the best practices of schedulers. It allows P&IC professionals to choose the trade-offs between business rules that create the best overall results. Because the schedules are detailed sequences of tasks for every resource, the plant can follow them very closely, improving chances that actual production will reflect the balance the scheduler chooses.


What's best for your plant?
In the real world, leading companies have found effective tools to make the trade-offs between business goals. Each manufacturer has propelled the business forward by using a detailed scheduling software solution. Schedulers and planners at every company can strike the delicate balance they need to succeed, armed with the right tools and motivated with the right goals. As long as everyone-including management and schedulers-knows they are choosing trade-offs and optimizing operations across the entire enterprise, great results are possible.

The key for success in manufacturing resides in balancing the trade-offs. This is not static or theoretical. Business conditions change frequently, and plant operating realities change even more often. It's critical to find a scheduling product that can reflect those changes-and the particular balance that spells success in your plant and your marketplace.

To view a sidebar story detailing an application of manufacturing synchronization, click here.
Julie Fraser is vice president, market strategy, for Berclain Group Inc., a provider of detailed scheduling and manufacturing synchronization software. She was formerly senior industry analyst at AMR, following plant floor applications.
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