The new production facility of Bordertown Salsa Company had not only been able to meet its scheduled production load but had actually gotten ahead of the game. It now felt capable of taking on more work.
For a new production facility this was an encouraging development.
The general manager, however, was cautious and reluctant to push the new plant to the limits. “No sense in giving them so much that they choke themselves,” he thought.
Bordertown’s production manager told the general manager that he would like to move in 2 units of scheduled output from period 3 to period 2. This would provide a test of the plant’s productive capacity in period 2 and, if that went well, would open up some slack time in period 3 to do some line adjustments. The general manager agreed.
Pulling work forward is not always a bad idea. In this case, it is done for a rational purpose: to test the limits of a new production facility and to create future slack time for line adjustments. Another instance might involve the opportunity to fi ll unused production capac- ity. Likewise, a company may fi nd that its parts or materials inventories
are too large, and moving orders in can help reduce these inventories and associated carrying costs if the product built can be sold, shipped, and invoiced. The reasons to move a manufacturing order to an earlier date are numerous. However, moving up an order involves more than just a change in the due date.
Management Issues
Some orders are moved in because they must be moved: a batch of fi nished product was damaged and must be quickly replaced, preship- ment product testing found many defective units, a cycle count found an inventory error placing the company out- of-stock on a popular product, a new safety stock level has been approved, and so on. Other move requests may have less merit, and part of management’s job is to create a working environment in which necessary and frivolous change requests can be sorted out on a rational basis.
It takes very little effort to request an order change, but implement- ing the change is often diffi cult, disruptive, and costly. Management needs to determine if a change request is frivolous or essential to the goals of the business, and whether it can be justifi ed from a cost stand- point. If the move-up request is simply to satisfy some internal conve- nience—such as an arbitrary safety stock requirement—that might not represent a genuine business need. If the move is to satisfy an im- portant customer, we should measure the benefi t of greater customer satisfaction against the cost of making the change. We need to ask:
“What would happen if we didn’t make the change?”
Here are some other issues that the master scheduler and manage- ment must think through:
• The order movement may be inside the lead time. One or more components needed for this stage of production may not be available at the newly scheduled date. This could create a materials problem as well as a credibility problem for the scheduler (i.e., by asking manufac- turing to make product without materials).
• Is there suffi cient capacity? Whoever approved the move-in order may not have checked (or had the experience to determine) that the
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Managing with the Master Schedule
capacity was available. If the factory cannot respond, what purpose would be served by moving the order?
If an order must be moved forward, yet the plant cannot respond, then management must make hard choices. Being between a rock and a hard place is a dilemma that is common in the business world.
Management’s job is to exercise judgment and creativity in dealing with these dilemmas.
Naturally, management is not the only party concerned when the idea of moving in a manufacturing order is considered. If manufactur- ing resists, sales and marketing may respond: “You’ve done it before.
Why not now?” Manufacturing may counter with: “We are fl exible—
to a point—and can handle this one moved-up order. But we can- not handle three, fi ve, or ten such orders.” Manufacturing rightfully wonders why they are seldom notifi ed of opportunities to move out orders to make room for the orders in question. Finance, as always, is concerned with the costs of the change and how it will enhance or re- duce profi ts. The master scheduler, whose job it is to satisfy customers within the capabilities and capacities of manufacturing, may rightfully muse that “nothing seems impossible to the person who doesn’t have to do it.”
Two other time fences are sometimes used by companies to help in managing the business. The capacity time fence (for example, see Figure 10.7, pp. 284–285) reminds the master scheduler that chang- ing capacity within this boundary is diffi cult. The material time fence (for example, see Figures 10.8 and 10.9, pp. 294–295 and 302–303) re- minds the master scheduler that changing the material requirements inside this boundary is diffi cult. Both of these time fences are warning- type fences and don’t affect the MPS software (ERP) logic.