Manufacturers Need Capacity Management to Deal with Supply Chain Disruption

In our previous blog we described how supply chain disruption is a huge problem for manufacturers, and how tough choices need to be made when there is insufficient capacity to meet demand. Capacity management is an essential prerequisite for successful scheduling. Phenix Planning and Scheduling’s Capacity Workbench (shown below) is being developed to help plant personnel visualize demand versus capacity. Capacity problems are highlighted in yellow and red.

Figure 1. Capacity Workbench

To illustrate the pitfalls of scheduling without capacity management, I once helped implement a new finite scheduling system at a large European site. The site was expecting it to solve all their scheduling problems, instead, when we started testing, we found that the new system didn’t work well; It was not creating a good schedule.

What Was Wrong? 

When we looked closer, we found that the current level of demand was 20% higher than the plant’s capacity while running a 24 hour 7-day schedule. No matter what the software tried to do, there would be unfilled orders, and no amount of technology would solve the basic problem.

Phenix Planning and Scheduling has several features that will allow you to assess capacity or augment your capacity management process to avoid the issues we faced.

First, Phenix will automatically place your products in the best sequence to maximize production efficiency, thereby allowing you to maximize customer service.

Many capacity management processes approximate changeover losses and capacity. With Phenix, you will have confidence that you are using specific line rates and available time. The setup losses will be calculated directly from the optimum sequence and the product attributes that are changing.

If orders still exceed capacity, Phenix uses an overflow bucket to capture what doesn’t fit within the cycle and allows the scheduler to make priority decisions. To prioritize orders, you can create attributes to stratify products based on their business value and the customers that purchase them. Then, by using Phenix’s color-coding by attribute feature, you can quickly see which orders in each cycle are higher priority and which are lower priority.

In the screenshot below high value orders are colored in green, and the scheduler can easily see a high value order in the overflow bucket and take appropriate action.  

Figure 2. Prioritizing Orders by Business Value

In many cases, it’s not the availability of run time that is the constraint; it’s the availability of resources like staffing or components. While the capacity management process may have approximated their availability over longer time periods, in Phenix, you can create a minute-by-minute view of resource and component sufficiency, and warnings when your schedule exceeds their availability. In the example below, the crewing capacity is 50 people. When more than 50 crew are required the crew resource is highlighted in red.

Figure 3. Highlighting Resource Constraints

Maintain the Big Picture

You must maintain efficiency in the face of capacity shortages, or you will disappoint more customers in the long term. It’s important not to lose your way or direction when capacity gets tight. It’s easy to fall into the trap of prioritizing whatever is short today, but this leads to what we used to call the death spiral at P&G. Reactive scheduling leads to more changeovers and more difficult changeovers, which create more capacity losses, which creates more of a crisis and even more changeovers and more losses… Keep your head up, see the big picture, and continue to schedule in a sequence that allows you to produce efficiently.

Current Development

With today’s supply chain disruptions, we’ve realized that more help is needed for sites that lack a capacity planning solution. This is why we are developing the capacity workbench to allow visualization of demand versus capacity, stratification of products and customers, and prioritization. Phenix’s Capacity Workbench shows line capacity loading, crewing, and ingredient requirements. By selecting a cell, the planner can see the scheduled materials, their business importance, the line time, and resources they require. Then, they have actions to approve, edit, or move them.

Figure 4: Capacity Workbench with line detail

The Capacity Workbench uses the scheduling capabilities of Phenix and the computing power of AWS to quickly assess the capacity required versus the capacity available on the production lines, resources, and components.  It calculates the detail in the background and gives you the overview based on the detail. As a result, you will be able to stratify products and customers by business importance, accept or not accept production based on your priorities. You will have confidence that the orders you accept will fit within your capacity and be scheduled in the best sequence.

Schedule a call to chat about your capacity management requirements here:

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 Mac Jacob, Head of Product, CPIM, SCOR-P, was a key contributor to building Procter & Gamble’s supply chain, ranked as one of the four best in the world by the Gartner Group.  He started in project management, production planning, warehousing, and shipping in a small manufacturing plant, and then became the planning manager for Luvs Diapers for North America.  He realized that it was the supply chain systems that were holding back the business and led a project that eventually became P&G’s global SAP/MRP II implementation. At one time or another, he was the business leader, developed the work processes, and wrote the original training materials for most of P&G’s supply chain planning systems.

Changeovers and incorrect inventory levels waste significant time and money and affect customer service. Phenix planning and scheduling software uses Aligned Product Wheels to minimize waste and align production with the business’s customer service, cost and working capital goals.