Most companies allow their customer to determine their schedule regardless if they have a scheduling feature in their ERP or not. Don’t believe me just talk to someone in customer service or to an expediter. Their whole job is to listen to the customers and sadly give head to the one who screams the loudest. Don’t take that the wrong way I am all for customer satisfaction and reaching 100% on time deliver. I am simply stating it’s sad because it is a perpetual negative feedback loop from which there is little chance of escaping. And by the time the customer has to scream for it it’s too late.
That is just the nature of the beast, or that is just how it has always been done. These are common phrases for people on companies that are stuck in this loop. So I want to describe this loop a bit more offer possible reasons for them staying in it and a solution to breaking free from it.
Here is what the loop looks like: customer calls, where are my parts, you have had them over two weeks? Reply: let me look, our system shows they have not started that job yet. Customer: I need them tomorrow. Reply: I will add it to our expedite list, don’t worry it’s on us this time. Customer: thanks. Then the hot list gets past to the foreman. The Forman hands it to the operators. The operators break from their normal routine and to jump through a few hoops, in the meantime putting other customers orders aside. And the next day the customers gets their parts. Well those customers get their parts but the ones set aside don’t. Unless they call tomorrow and scream then they will get them.
The problem is the whole loop is negative but gives random positive reinforcement of that behavior along with absence of accomplishment as they become heroic even if just for a moment, pulling off the manic trick of the week, getting things done, satisfying that’s customer. And they think see we did it, it’s working. But it’s not! They are barely surviving. That wasn’t heroic it was an act of desperation. An act to save a customer not to satisfy them.
So why stay in this loop. The major reason is a belief. A belief that this is the only way, and it has worked for (insert number of years). It’s how we have done it in the past and had success so why fix what is not broken.
Side note: some people mistakenly believe that their ERP scheduling system is good enough and can do the task but really it just masks the real root causes. If you believe one company’s software solution can work for thousands of different companies scheduling needs across different products and services you are close. It will probably do 80% of all that. And you might say well that close, maybe even sufficient. Then the years go on and you still have customer expedites that in an instant through the schedule out the window. After a week of that your scheduler isn’t going to be so detailed about what to run next knowing it’s just a guess anyways.
How recoup the missing 20% your ERP just can’t do for you – it’s through applying a TOC schedule. Yes TOC has a schedule. But you have to create it. Before going into the details I can say you will can create it and ditch your ERP or use it to schedule into your ERP, your choice. But if you know the wastes of Lean you might go with the first.
Drum – Buffer – Rope Scheduling is the TOC schedule. If you identified your constraint or bottle neck in step 1 I mentioned in the last post then you are ready. That will come into play later. But first I need to teach you about a new metric. Some say it’s the one metric to rule them all. If you are an analytical person you will enjoy this part.
TDD or through-put dollar day is the king metric for your schedule regardless of processes involved. I don’t care how many processes you have it doesn’t matter. Most people try to decide what type of schedule will they have, so we run FIFO do we run a straight 80/20 rule, do we run for profitability or just customer service as I described earlier? If you picked any of these it’s wrong partially and right partially. Ever hear about the 3rd alternative (Steven Covey)? Well TDD is that 3rd alternative.
If you break it down TDD incorporates through-put aka 80/20 rule, dollars aka profitability, and days aka on time delivery or customer satisfaction with a dash of FIFO. Let me explain how that works. You take the quantity or weight doesn’t matter and that is your through-put. You multiply that the invoice cost for the job/service. And finally you then multiply that by the days until the due date. (T x D x D) once you have this calculated for each job in your facility you sort it highest to lowest and poof there is your first draft TOC schedule. This will grow into the DBR schedule i mentioned earlier.
I think that is enough for now, this step 2 should only take a day to build in excel and most ERP systems export to it. Just get these three columns multiply them together and have the order number and any other helpful info, sort it and pass it out to your company. We will develop this as we go along.
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