Can Better Planning Make Manufacturing Disruption-proof?
The planning and forecasting process has always been a vital part of manufacturing, but now, after a roller coaster of a year, it’s becoming clear to many in the industry that this process needs to be bulletproof — and in many cases, it isn’t. The good news? A little tweaking and refining can shore up your planning process and help protect your operation against any kind of uncertainty, or disruption, that may come down the pike in years to come.
Problems in planning
You already know that accurate planning and forecasting is designed to anticipate demand and determine how much to produce to meet that demand, including shoring up adequate, but not too much, supply. We find that for a number of our clients, that works out to a “tons per hour” measurement of what they can realistically produce on any given day.
But, snags that manufacturers encounter in their planning process tend to come from the “it’s the way we’ve always done it” files. Here are just a few that we’ve seen lately:
Data is old by the time the plan actually goes into effect. Does this sound familiar? You start planning at the beginning of the month. By the end of the month, you’ve got a plan to hold yourself accountable. Great! But, the problem is, you’re using month-old data to start their planning process, so at the time the plan goes into effect, you’re using two-month-old data.
Data is not uniform. If manufacturers have multiple locations, odds are that they’re not all walking in lockstep when it comes to planning and forecasting. You may have plants doing their own thing, how they’ve always done it in regard to efficiencies, so there is no single source of truth on efficiencies and capabilities companywide.
Vetting time. If manufacturers are taking too much time to vet the plan, it delays the accuracy and immediacy of their data.
Unforeseen circumstances. We all know now, all too well, how unforeseen circumstances can throw a wrench into operations.
Refinements that can solve those problems
We’ve found that for many of our clients, some tweaks and refinements to their planning process can make all the difference. Here are a few problem-solvers that our clients are implementing.
A rolling calendar structure. We recommend instituting a 24-month rolling calendar, so when one month drops off, another is added on the back end. Here’s how it looks in practice:
- The first third of the month. Look back and assess how you performed vs. the plan in the previous month. If you fell short, how can you get better?
- Middle third: Continuous improvement. Develop action items to make the planning more smooth.
- Final third: Actually do the planning. Instead of having two-month-old data, you’ll be working with at most 10- to 15-day-old data.
Compromise on perfection in favor of immediacy. Don’t write those 24 months in stone. The plan might change multiple times between the start of the plan and 24 months down the line because of unforeseen circumstances. Being OK with this might require a huge shift in mindset for some people.
Flexibility. The forecasting and planning process has to be flexible enough in manufacturing to roll with the tides that might shift at any given moment in time.
SIOP. We focus on Sales, Inventory and Operations Planning, a holistic process that integrates customer-focused demand plans with production, sourcing and inventory plans, resulting in improved tactical and long-term business decision-making capability. The purpose of SIOP is making sure the business is having the right conversations about the right things at the right time. Steps in the plan include:
- Sales forecast
- Inventory considerations
- Executing the plan
- Reporting and reviewing
- Analyzing and improving
Uniform efficiencies across all plants. If you have multiple locations, get everyone on the same page in terms of planning.
Bottom line, more accurate planning and forecasting is going to make your manufacturing operations more efficient and ultimately more profitable. At USC Consulting Group, we’re dedicated to helping our clients get there.
For an inside look into how we helped a national construction materials supply company refine their planning process, read “Building Materials Supplier Lays Groundwork with SIOP.”