A pragmatic approach to make-to-order

If there is one area of concern that is exerting an overriding influence on the minds of Preactor's users, it is demand-driven manufacturing (DDM), or make-to order (MTO). This is where they believe they can best deliver optimum service value to their customers, while at the same time minimising costs in their manufacturing operations – a highly attractive dual proposition. According to Preactor technical director Graham Hackwell: "our view has always been that, if you want to get the leanest process you can, and also remove as much waste as possible from the business, it's vital that you make exactly what the customer orders. However, in order to arrive at a true DDM/MTO environment, you need a very agile process. Imperatives for change "If you look at the reasons why manufacturers have produced large, economic batch quantities, it is primarily because their processes were distinctly non-agile. It took a long time to move from making one product to another, so plainly you weren't going to set that up for half an hour and then change it again." The imperatives for change are clear to Hackwell, and the technology to effect such change is readily available. "Manufacturers intent on achieving high levels of agility around their processes now have the means to do so. Yet there are fundamental principles involved around changes and set-up that have to be factored in when moving towards these goals. "Getting rid of redundant inventory that is hitting your cost base is process-dependent, so manufacturers have to expend effort re-engineering their processes. Why? Because once you move from larger batch quantities, with infrequent changeovers, to fulfilling a succession of smaller orders demanding lots of changes, that raises serious issues related to control." Even where manufacturers have very agile processes, they still need the benefits of an advanced planning and scheduling (APS) system, he argues, if control over the production process is to be maintained. "If you have to make 20 different orders on one day, for example, and the sequence in which they are made starts to become important – what we call 'sequence-dependent changeovers,' classically from light colours to dark for paint lines – then this has to be managed carefully if you are to make best utilisation of the process," adds Hackwell. "Also, an APS system provides the ability to do what we term 'dynamic aggregation'. It may be possible, based on the delivery performance profile for the week ahead, to aggregate some of the smaller orders within the MTO environment and make bigger batches to achieve some economies of scale. "At the same time, the manufacturer may recognise that, for the following week, the delivery profile is different and, in order to meet that, each batch will have to be made separately. So in this instance you have to take the hit on the multiple set-ups required to meet that situation. The two things – the agile process and the control system that wraps around it – go hand in hand. And unless you have both, you aren't going to achieve your demand-driven objectives." While meeting these twin goals, Preactor's APS also serves as a visualisation tool. By investigating 'what if' scenarios right across the process, it enables manufacturers to assess their options and pinpoint the most effective approach to take, at any given time, bearing in mind all of the possible variables that might arise. "For example, a manufacturer might want to measure the effect if set-ups on certain machines were reduced by, say, 50%," explains Hackwell. "Visualisation makes it possible for the business to identify where the greatest effort needs to be deployed to improve the overall process, without merely shifting the potential bottlenecks from one point to another." Visualisation also gives the manufacturer a complete view of the process and all of its interactions. "It empowers the planner," says Hackwell. "The classic Orwellian concept is that, individually assessed, all kanbans are equal and so it doesn't matter which one you fill first. However, if you are looking at MTO and delivery performance, it may make a big difference. "Visualisation across the whole operation removes the 'islands' where one set of activities upstream can severely impact another set downstream, without that being fully recognised and taken into consideration. Preactor's role is to make conflicts of interest visible so the overall goals of the business become a working reality."