“We’d like to reschedule our order.”
This is not the worst kind of message to get from a customer. It’s cer- tainly preferable to “We’d like to cancel our order.” Still, it can present problems for manufacturing and challenge the ability of management to run the business in a way that delivers a profi t to shareholders and satisfi es customers—which are the two bases for being, and staying, in business.
Consider the case of Acme Glassworks, a producer of plate glass.
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Managing with the Master Schedule One of its major customers, a manufacturer of commercial windows and glass sheathing for buildings, has called to request a change in its scheduled orders, from 10 pallets in each of the next four weeks (40 pallets in all), to 10 this week, 14 next week, 6 the following week, and 10 the following week (again, 40 in all).
The master scheduler at Acme Glassworks recognizes this as a straightforward timing change, one that will require some shifting from week to week. If capacity and materials were no issue, this could be accomplished as follows:
On the surface, a request to move up an order would seem like a clear- cut opportunity for the manufacturer to please and satisfy the customer. But is it really? This move-up request may actually have some source other than the customer. The order might have been triggered by one of the company’s own sales representatives. With the sales contest for the trip to Hawaii coming into the fi nal stretch, the representative in Omaha might have pleaded with a customer to place the order early, thereby pushing his sales numbers up in the contest period.
In another situation, the order might originate on a clerk’s computer screen. The customer in this case might be a clerk in the company’s in- ventory control group whose computer software fl agged the item, in- dicating a demand change due to arbitrary safety stock requirement.
If a great fuss is to be made in moving an order in, then we need to be sure that all the pain and suffering will have a positive result: that of profi tably serving a paying customer.
Management Issues
Even the simple Acme Glassworks situation raises a host of important issues for managers and supervisors.
• Can we get the capacity? Sure, you want to satisfy the customer’s request to move up an order! But it’s often easier said than done. Will this gesture of customer satisfaction overload the schedule and throw a monkey wrench into the production facility?
• Can we get the materials? Even if the capacity problem is solved, a manufacturer might not be able to move up his own order for materi- als. With so many companies operating on razor- thin parts and materi- als inventories, the materials might not be obtainable.
• How much will it cost? If overtime is part of the capacity solution, and if expedited purchases and air freight of materials are part of the materials problem, then this order change may squeeze any profi t out of the order that so many people will be scrambling to accommo- date.
• What will this change do to morale and teamwork on the fl oor?
Personnel close to the action may be working diligently to create a stable and smooth- running operation for management. Will this order change and disrupt the effi cient routines and undercut the progress personnel has made in creating an orderly workplace?
These are important issues for management. Others in the organi- zation will have their own issues of concern. Marketing may see the order change as important for market penetration. In the absence of any explanation, manufacturing may see the order change as just an- other headache. Finance may see a revenue opportunity. Of course, they may also recognize a cash- fl ow problem—namely, how will the company pay for the material and manufacturing costs that are now being moved up and out of its budget?
Typically, requests to move up an order in the schedule come from someone in sales, and they usually want an answer right away—while they are still on the telephone. “Well, can you do it or not?” We all like to please, but moving an order usually requires some checking: with the current manufacturing schedule, with the stockroom, and some- times with suppliers. There is nothing wrong with saying, “I’ll need to do some checking and call you back. It may take a day or two to get you an answer, depending on which suppliers we need to check with
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Managing with the Master Schedule to see if we can get the materials.” To imply otherwise is to send the signal that schedules are of no great importance and can be changed at will.
Sometimes we simply have to say no to change requests. But instead of an absolute no, we should say something like this: “I can’t move that order up because the production schedule is currently booked. If you would be willing to move one of your other orders to a later date, however, I might be able to use that capacity. Do you want me to look into that?” This response helps the salesperson understand the limits of schedule fl exibility, and conveys the important idea that trade- offs are often the answer.
For companies whose traditions have been to refl exively accept or- der changes, the greater care and study suggested here may not be agreeable to everyone—especially at fi rst. Sales representatives who routinely telephone in order changes and get an instant answer will not like being told “We’ll get back to you after we do some check- ing.” One of management’s challenges is to help these people see that a more thoughtful way of handling order changes is in the company’s best interests.
Of course, computer software continues to get better and better in its support of demand and supply balancing. However, it’s not just about computer software. The company must have solid processes that approach Class A to make use of the software available today. The movement in the twenty- fi rst century is to customer and supplier col- laboration and the sharing of information. This is what might be called real Class A integrated demand- driven Supply Chain Management.