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Lean University --
Lean Articles
The importance of production
linearity
by Bill Gaw
Companies will never achieve
their full growth and profit potential if they produce more
than 25 percent of their monthly shipment plan in the last
week of the month or more than 33 percent of their quarterly
shipment plan in the last month of the quarter.
As companies struggle to
remain competitive, one of the strategies by which gains in
speed, quality and costs can be achieved is to form teams of
employees to pursue and continuously improve linear
production.
Why is linear production so
important? It's simple. It's where the money is. Scrap,
rework, overtime and poor quality are all non-value-added
costs that increased as a function of the famous
"Hockey Stick Syndrome."
As we delay our production
schedule completion toward the end of the month (or worse,
to the end of the financial quarter), there is a tremendous
pressure put on manufacturing that produces shop floor chaos
that generates significant non-value-added cost.
We usually end up making the
production plan and financial forecast because the
knights in shining armor come through with a last minute,
heroic performance. But, at what cost? Some companies
actually give up 10 percent to 20 percent of their potential
profit margins because they have developed and fostered a
manufacturing team that perpetuates the Hockey Stick
Syndrome.
Companies that continue to
live with the end-of-the-quarter push will never achieve
their full growth and profit potentials.
How do you smooth schedules
and achieve linear production? The challenge is in how to
keep daily pressure on the critical path of scheduled
achievement. We need to have the visibility of all critical
tasks and milestones from day one of the quarter and create
team awareness and commitment to their timely achievement.
Our manufacturing team must
become sensitive and proactive in the execution of
early production planning details and they must learn to
apply their creativity and energy in a linear style.
Up front planning and
execution can yield amazing manufacturing results and lead
to profitability beyond expectations.
The most effective production
manager I've ever known used a huge magnetic board to
schedule production planning details and monitor production
linearity. An early focus on details, corrective actions and
recovery planning was his management style. He held early
morning meetings every day to status yesterday's progress on
the magnetic board and to establish the daily challenges. He
was an expert at team dynamics and his people always new
what they had to do and they were always provided the tools
to get the job done.
The combination of the
magnetic board, the morning meetings and his team dynamics
skills made this production manger an effective leader and
an expert in achieving linear production.
Today many production
managers are still trying to solve their linear production
problem by pursuing a sophisticated software solution.
Most companies are now using
MRPII/ERP manufacturing systems to control their production
environments. These systems do not provide a focus on the
detail, up front tasks and milestones critical to linear
production and consequently have not presented a solution to
the Hockey Stick Syndrome.
On the other hand, using an
old magnetic board in this day and age of computer
sophistication may not be an acceptable alternative. A good
tradeoff might be to develop a simple computer spread sheet
specially designed to plan critical production milestones
and to measure/monitor production linearity.
Using this daily schedule as
the Bible, we must retrain the knights in shining armor to
gradually shift their manufacturing paradigm from
end-of-the-quarter fire fighting to daily proactive problem
solving.
Finally, it is important to
differentiate between shipment linearity and production
linearity. In a widget, make-to-shelf manufacturing company
that builds substantial finish goods inventory and in highly
engineered capital equipment manufacturing companies, the
two linearity measurements will not be equal.
Shipment linearity may be
more of a function of sales' bookings and customer's
preference rather than nonlinear production. Consequently,
the measure of production linearity must be developed to
measure the performance of the manufacturing process and not
be influenced by sales bookings or customer related shipment
delays.
Bill
Gaw’s manufacturing experience spans more than 35 years.
During those years, Bill has held positions as a shop
expeditor, production planner, buyer, manufacturing manager,
director and president. Bill has participated in four
successful financial turnarounds. For additional
information, click here:
Good
Manufacturing Practices. |
