5 Steps to Designing Effective Product Wheels for Repetitive Scheduling
Product Wheels introduce a regularly repeating sequence of production that aligns with overall business objectives, providing a level of stability that’s often thought impossible by planners and schedulers. Recent blog posts like this one have outlined the substantial value companies have experienced from adopting Product Wheel scheduling.
For those currently using Product Wheels, we’ve also shared insight into some key value drivers that are often overlooked and should be considered to ensure that your Product Wheels are designed to get the results you want.
Getting Started with Product Wheel Design and Redesign
Whether you’re new to Wheels, or looking to revamp the Wheels that you currently have in place, you may be wondering where to start. Through years of implementations, we’ve identified the most important components of Product Wheel design… and we’re going to share them with you!
The good news:
- Product Wheel scheduling doesn’t require additional capital.
- Product Wheels are common sense. Planners, schedulers, and operators intuitively understand that there is a best sequence in which to make their products.
- Product Wheel scheduling can increase your manufacturing efficiency by 5-30%.
- Make to order and make to stock products can be mixed within the Product Wheels. In fact, make to order manufacturers can often use Product Wheels and repetitive techniques to increase their manufacturing efficiency.
The Keys for Success
The most effective Product Wheel designs take 5 essential considerations into account.
Step 1: Determine how often the Product Wheel should complete
How often should any given product be made? Customer order lead time, shelf life, demand variability, storage space, capital costs, and changeover difficulty all must be considered. To provide a starting point, classic economic order quantity calculations can be done to calculate recommended frequency. You can bookend the frequency by calculating the shortest possible Wheel that won’t run you out of capacity, and the longest possible Wheel that won’t exceed storage, working capital, lead time, or shelf-life constraints. Use these three starting points and adjust based on your business objectives. If you want to improve customer service and lead time or reduce inventory, lean towards shorter cycles. If you wish to improve cost and efficiency lean towards longer cycles. More sophisticated cycle design algorithms can make recommendations across families of products.
Step 2: Calculate the safety stock required
Safety stock levels for each SKU must allow for the Product Wheel cycle to complete as planned without interruption. If you can’t reliably complete the Product Wheel, you won’t have a repeating sequence in place. It can be tempting to think that you can get away with less inventory, or that ongoing changes to the schedule won’t impact the overall operating strategy. In reality, the calculations don’t lie, and the confusion created by frequent emergencies and rescheduling often results in more inventory than if you had followed a deliberate inventory design.
Often, people think that the proper level of inventory to protect Product Wheel cycles is unattainable, that it will mean too much inventory and working capital. The reverse is usually true. Data based inventory calculations usually show that some SKU’s are too high, some are too low, and the net is equal or less than the current practice, along with better customer service and increased operating efficiency.
Step 3: Group products and assign them to lines
Group products that run well together based on changeover characteristics. We call these product families. Once the product families are established, assign them to specific production lines. Changeovers within a family are easier and faster than changeovers that involve family-to-family changes. Often this step alone is worth several points of operating efficiency. Then, place the products assigned to each line in the sequence that maximizes efficiency by considering the various changeover characteristics. Make to order products can be placed within their appropriate families and sequence, to provide a placeholder for their production whenever there is demand.
Step 4: Implement the Product Wheel design
Once you’ve designed the Product Wheel, an ERP system like SAP can be set up to create production or process orders that approximate your design. If your system has the capability, you can use period-based lot sizes corresponding to the Product Wheel frequency. Otherwise use lot sizes that will create the designed Product Wheel frequency given average demand.
Using simple sorting algorithms, many systems can schedule production or process orders in a repeating sequence. Since you’ve simplified scheduling, you might continue to use Excel to sequence your ERP/MRP orders now that the scheduling logic is understandable, defined, and trainable. However, be forewarned that it can be difficult to keep track of where you are in the Product Wheel, know when to break the Wheel (and when not to), and where to insert emergency orders. Simple sorting often gives away some production efficiency compared to more sophisticated sequencing techniques. If you’re looking to skip over these difficulties and maximize efficiency, look into incorporating specialized scheduling software.
Step 5: Assess and refine the Wheel
Now that you have a solid starting point, you’ll have the opportunity to continually assess and fine-tune the design. As you continue to use and redefine the Wheels, you’ll quickly start to see their value across the entire supply chain.
Put an end to less-than-optimal production scheduling by designing (or re-designing) and implementing Product Wheels. Taking a structured, holistic approach to your Wheel design will set you on the path to see substantial, lasting value.
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