Effects and Procedures of Implementing a Production Scheduler in Indonesia

In Indonesia, an increasing number of Japanese manufacturing companies are introducing production schedulers to respond to market demand fluctuations. This explains the reasons for inventory necessity, why inventory is a cost, and the trade-off relationship between opportunity loss and excess inventory, along with the procedures and effects of implementing a production scheduler.

The Importance of DX from the Perspective of Business Reform

The introduction of a production scheduler should focus on maximizing the production efficiency of bottleneck processes that cause issues like delayed deliveries and excess inventory, with the assumption that current business practices will be updated. If the implementation focused on bottleneck processes goes well, the expansion to preceding and subsequent processes should proceed relatively smoothly.

However, if the planning work system remains as it is with separate personnel for each process, the plans will remain fragmented by process. A common question before implementation is, "Do we need to purchase licenses for each person if multiple people want to reschedule?" The most effective use of a production scheduler is for a single person to handle all processes comprehensively.

Despite introducing a production scheduler to create a flow in production, having multiple planners set up plans in a relay style as before is counterproductive. With the introduction of a production scheduler, each process that previously planned independently shifts to a dependent variable, and planning with the production scheduler becomes the only independent variable, fundamentally revising business practices.

The introduction of a production scheduler should not be seen merely as a system implementation project but should be approached from the perspective of DX aimed at business reform, which is a crucial point for the success of the project.

Inventory Reduction through Production Scheduler

Role in the Workflow of Production Scheduler

The production scheduler creates the most efficient production schedule and a purchasing schedule to prevent material shortages based on customer orders, preventing delivery delays. This simultaneously achieves "cost reduction through productivity improvement" and "on-time delivery."

Automatic Generation of Production Schedules by Process and Machine

In the factory, a production schedule based on the completion date of products is created from order orders, and manufacturing is carried out based on a breakdown production schedule by process. Since tasks vary depending on the type and capacity of machines, it is necessary to create a schedule considering the load between processes. When order quantities change or rush orders occur, the entire schedule is affected, but Asprova instantly adjusts based on the set master information.

Inventory Reduction through Lead Time Shortening

With the production scheduler, materials are received at the necessary timing, and production lead time is shortened. If products are completed just before shipment, work-in-progress inventory, material warehouse, and product warehouse inventories are reduced. Asprova generates a cycle time-based schedule and creates a schedule centered on dispatching and bottleneck processes tailored to shop floor constraints, preventing inventory stagnation in previous processes.

Lead Time Shortening through Dispatching (Task Assignment)

As an example of dispatching, performing tasks in the painting process from light to dark colors can save on cleaning setups.

By manufacturing the same items together, the number of setups for mold and jig changes is reduced, and specifying the period for batch production prevents inventory buildup. The production scheduler can set dispatching based on cycle time and shop floor convenience.

Inventory Reduction through Production Aligned with Bottleneck Processes

In Indonesian factories, it is common for the previous process to be pressing or molding, and the subsequent process to be welding or assembly. The subsequent process has a longer takt time compared to the previous process, so if the previous process is fully operational, intermediate inventory accumulates. Shortening the lead time of the previous process is not always optimal, and the production scheduler creates a schedule that maximizes bottleneck capacity, preventing inventory stagnation within processes.

Relationship between Bottleneck Processes and Output

The lot size flowing between processes depends on the bottleneck process, and if the takt of the bottleneck process is delayed, it affects the overall takt and output.

The Theory of Constraints (TOC) is a theory that maximizes overall throughput by maximizing the capacity of the bottleneck process. Asprova creates a forward schedule for the bottleneck process and a backward schedule for the previous process, generating a schedule that prevents intermediate inventory stagnation.

Independent and Dependent Variables

When introducing a production scheduler, it is important to first understand the current issues, investigate their causes, and make improvements to achieve visible effects. This is similar to controlling an opponent in Aikido by targeting vital points. Factory issues include delivery delays and excess inventory, often caused by bottleneck processes that reduce overall factory productivity.

The lot size flowing between processes depends on the bottleneck process. If the bottleneck process's cycle time is delayed, it affects the overall cycle time and output. The Theory of Constraints (TOC) aims to maximize overall throughput by maximizing the capacity of the bottleneck process. The process that first reaches 100% utilization when maximizing the factory's production resources is the bottleneck process, where work-in-progress inventory accumulates before it.

If the production efficiency of the bottleneck process can be maintained at 100%, the factory's production capacity can be fully utilized. Delivery delays and excess inventory are called dependent variables because they cannot be directly controlled, whereas the productivity of the bottleneck process is called an independent variable because it can be directly controlled by revising the production plan. To improve the independent variable, it is necessary to plan a schedule centered on the bottleneck, which is why the introduction of a production scheduler is considered.

The Toyota Production System (TPS), which assumes leveled production of a wide variety of small quantities, is a method to avoid creating bottlenecks. However, in many factories that produce with limited production resources while responding to demand fluctuations, it is challenging to implement leveled production across all lines.

Relationship Between Opportunity Loss and Inventory Cost

Shortening Time for Partial Optimization Is Not Always Optimal for the Whole

Introducing a production scheduler to aim for inventory reduction is a good thing, but inventory also serves as a risk hedge to reduce opportunity loss. There can be management decisions to bear inventory costs to reduce opportunity loss. Inventory should be discussed from the perspective of overall optimization, and excessive production in the previous process leading to intermediate inventory before the next process can be considered wasteful inventory cost.

Overall Optimization of the Factory Over Partial Optimization of Each Process

General production management systems (ERP) are aimed at department and process management, focusing on accurately understanding quantities and time internally without considering the relationships between preceding and succeeding departments or processes. This is called partial optimization, but to reduce inventory across the entire factory, overall optimization considering the relationships between departments and processes is necessary.

Overall Optimization Accompanying Value Addition Through Time Reduction

By producing and shipping with a short lead time after receiving an order, the value added per hour by production equipment increases, and the indirect costs assigned to products decrease. The quality of the supply chain is evaluated by three indicators: reliability, responsiveness, and flexibility. Improving from a long-wait schedule to a short-wait schedule enhances the responsiveness of the internal supply chain.

Why Inventory Is Considered an Interest Cost

Factors negatively affecting cash flow include accounts receivable days, finished goods inventory days, work-in-progress inventory days, and raw material inventory days, while accounts payable days have a positive effect.

The longer the inventory days, the more negative the impact on cash flow. Factors extending inventory days include safety stock, line stoppages due to machine trouble, and production halts due to labor disputes. These risks result in inventory costs that can be considered off-balance sheet liabilities not reflected on the balance sheet.

Reasons for Needing Inventory Despite Bearing Inventory Costs

There are two reasons for needing inventory despite bearing inventory costs. One is to bridge the gap between manufacturing lead time and order lead time. Generally, manufacturing lead time is longer than order lead time, so inventory serves as insurance to fill this gap.

The second reason is to maintain a buffer to prevent bottleneck processes from stopping. Since bottleneck processes determine the throughput of the entire factory, it is necessary to always have input items from the previous process as a buffer. Balancing inventory costs and risk avoidance is challenging, but generally, shipping personnel want more inventory when order fluctuations are large, and production personnel want more production when demand fluctuations are large.

Opportunity Loss and Inventory Cost Are Trade-offs

Opportunity loss (backorders) when orders are received but there are no products to ship, and inventory costs due to over-purchasing materials or overproducing products are trade-offs.

When backorders occur, it is natural to want to produce more to recover, which has the effect of quickly reducing backorder risk but also increases inventory. The way to alleviate the fear of opportunity loss and inventory cost is to understand demand movements and inventory within the internal supply chain. A production scheduler realizes overall optimization by visualizing the entire factory.

Case of Core System Implementation

This is a case of implementing the production scheduler Asprova to achieve factory visualization. By displaying production schedules based on demand on monitors, production progress is shared, and shop floor personnel can input results from a UI based on Excel as before. By visualizing demand from subsequent processes, the number of required materials, and current inventory, production flows smoothly without causing overproduction or shortages, maintaining appropriate process inventory.

Pre-implementation Preparation and Standard Implementation Steps for Production Scheduler

Standard Implementation Steps

The ideal scenario is to refine the prototype to a level where it can be operated in production, allowing for immediate operation after purchase. First, export the master data from the core system (ERP) and create a prototype that visualizes the factory using all operational data. Next, import the provided data into Asprova to create a one-month production schedule.

Then, review the prototype with the customer and refine it to enhance its practicality. If the decision to purchase the license is made, training on operation and add-on development methods will be conducted.

Data Required for Prototype Creation

While master data is needed to create the prototype, it is preferable to receive all data without limiting the number of parts or machines to be scheduled, as this allows for a smoother start of operations after prototype creation. The prototype will be created free of charge, and the workload does not significantly change regardless of the data volume.

Required information includes item information, a bill of materials (BOM) to understand parent-child relationships of items, process information, line (machine) information to know cycle times for each item, and calendar and shift data. Additionally, a one-month forecast, order, and shipment schedule, along with inventory information at the beginning of the month, are needed for the prototype.

Business Flow After Asprova Implementation

The business flow after Asprova implementation covers the creation of the master production plan, the creation of the production schedule before breaking it down into manufacturing instructions, the creation of the monthly production plan, and the calculation of material and resource requirements through requirements planning.

Implementation Schedule

The schedule ranges from 2 to 4 months depending on the data preparation, review, and revision period. Quickly receiving master data that accurately reflects production activities is key to shortening the implementation period.

Frequently Asked Questions | Production Scheduler in Indonesia

This article organizes frequently asked questions concisely based on the content.

What are the main benefits of implementing a production scheduler?

By implementing a production scheduler, you can solve issues such as delivery delays and excess inventory, maximizing production efficiency. This simultaneously achieves cost reduction through improved productivity and prevention of delivery delays.

What are the important points when implementing a production scheduler?

It is important to proceed with the implementation of a production scheduler from the perspective of DX aimed at business reform. Focusing on bottleneck processes and updating current business methods are keys to success.

What are the steps for implementing a production scheduler?

First, export the master data from the core system and create a prototype. Then, create a production schedule for one month and conduct reviews to enhance practicality. Finally, after purchasing the license, conduct operational training.