So far in Indonesia we have gone through a trial and error process from pre-sales to implementation of production management systems, inventory management systems, production schedulers, etc. to find out "how to sell" and "how to make the implementation work" at the work site, and we have been able to propose "subsystems I have come to think that "packaging of the production plan" is effective.
Before I go to the main article, I would like to talk about "Linking production planning and manufacturing results" which is an important key word in terms of analysis of this issue.
Memories of my time in Bali
When I was working as a furniture maker and exporter in Bali, I sent a purchase order to the Bali office of a company that has a furniture making factory in Jepara, Central Java, based on the regular orders from our customers and custom orders for the opening and renovation of restaurants and cafes.
Unlike mass production, it is a made-to-order production, so we receive frequent requests for progress and quotes from customers, and we need to respond to the delivery date.
The first process in furniture manufacturing involves drying the wood in the oven, which is done in batches to some extent on the production side.
So, even if you order a cabinet with the same delivery date, the manufacturer will sometimes force you to order the wood for the next month's unordered Batavia chairs in units of items that are easy to consolidate at their own discretion.
- Japanese customer (order) ⇒ I in Bali (order) ⇒ Bali furniture company sales office (sales) ⇒ Central Java furniture company factory (manufacturing)
Worse still, the manufacturer may be forced to arrange wood materials (production preparation) at their convenience, and there may not be enough teak wood available to cover the most recent delivery date, or mahogany wood for a late order.
What happens when that happens is that one day you'll get the devil's advocate to contact you.
- The price quoted went up because the price of teak wood went up.
If the price of wood goes up, it will naturally put pressure on our estimate. We are the only factory that can produce very high quality furniture at a reasonable price, so we can't say anything strongly about it either.
In this process, if the Bali sales office of the furniture company had sent out the manufacturing instructions to the oven process on the manufacturing side, the manufacturing side would have arranged the materials based on the instructions and the appropriate lot consolidation would have been done in the oven process.
The back-end processes would have been automated, which would have made it easier for me to respond to customers' orders.
In the same way, if there is no manufacturing instruction broken down from the production plan, the manufacturing side tends to manufacture at the discretion of the shop floor, just as a purchase order is only an indirect instruction from the manufacturing side, and so they decide on material preparation and oven packing at their own discretion.
I think this is a bad influence on the flow of information from sales to production without going through the Production Control Department, but looking back on it now, it was a good experience for me (with a distant view).
This is a familiar example of the importance of manufacturing instructions, but if you don't manufacture to a plan based on an order (or don't produce to a plan based on an order), you can't link an order with manufacturing.
Without this, a factory's primary mission - to ship high quality products on time - is adversely affected.
Linking Planning and Performance
After receiving the order information, it is put into the production plan and manufacturing instructions and the manufacturing results are entered, but systematizing this process seamlessly is the biggest challenge in the introduction of a manufacturing industry system.
Even though in the real world, the process from production planning to production results is done without any conscious thought, when systematizing, it is necessary to intervene with manufacturing instructions, which are an entity of the production planning class, and enter the results into the manufacturing instructions.
Ideal
- Order (system) ⇒ Planning (system) ⇒ Manufacturing instructions (system) ⇒ Manufacturing results (system) ⇒ Shipping (system)
Reality
- Order (system) ⇒ Planning (Excel) ⇒ Manufacturing instructions (Excel) ⇒ Unplanned manufacturing results (system) ⇒ Shipping (system)
In most cases, even if a production control system is already in place, MRP is not used in the factory, which means that you need to manually register manufacturing instructions for each process, starting with the unplanned manufacturing instructions.
However, although this method is easy to understand in terms of operation, without a system that makes it easy to issue manufacturing instructions, it would take a lot of man-hours to do so.
It is a burden for the production control department to issue manual instructions for each process in the system, and it is also a burden for the production site to record the results of manufacturing instructions.
Here, both parties' intentions are in agreement, so the Production Control Dept. is quicker to enter the actual results directly into the system as unplanned production results while looking at the daily report coming from the manufacturing site.
Basically, the production control department performs manufacturing based on the plan created in Excel and the daily report is sent out by day or by shift, so if the monthly order quantity is stable, there may not be a big problem with shipping.
However, if the order quantity is not stable due to high-mix low-volume production, the risk of delivery delays increases for the following reasons
- It is difficult to manage the linkage between orders and production.
⇒It is difficult to respond to progress and delivery date. - Manufacturing instructions are neglected on the shop floor and the monthly production plan tends to be aligned at the end of the month at the company's own discretion.
⇒Discrepancy between production control and the production site - Therefore, the facility capacity plan is not reflected in the field.
⇒This makes it difficult to manage production facilities.
That's why I feel that production planning is not so important, and I wanted to say that manufacturing instructions are important in breaking down production plans based on order information to the manufacturing floor.
Summary
- The key word is "linkage between production planning and manufacturing performance" which is an important analytical perspective on the issues of "how to sell" and "how to make the implementation work".
- It is important for production planning based on order information to be broken down on the manufacturing floor, and it is the biggest obstacle for the operation of the production control system to enter the actual results to the production instructions, and at the same time, it is a major criterion for the success or failure of the introduction of the production control system.
- In order to issue manufacturing instructions and record the results, the MRP function of the system is essential, but issuing manufacturing instructions in Excel tends to cause discrepancies with the factory floor, and the link to orders is often unclear.
- The correct setting of BOM is essential for MRP operation.
- In order to achieve a correct BOM configuration, subsystem packaging is effective (see the next entry, "Environmental Characteristics of Indonesia" in the next entry for reasons).