Making a science of future gazing

Are businesses paying lip service to on-time delivery, one of the most important KPIs early in the 21st Century? For, while it's now regarded as critical to just about every manufacturer, many appear to be ignoring the need to adapt to their changing environment. Such is the view of Graham Hackwell, technical director of Preactor. "One of the major obstacles we see to companies embracing change and implementing the right solutions and processes," he says, "appears to stem from a discontinuity in the minds of some manufacturing managers that don't see scheduling as a solution to delivery performance. "This can be extremely frustrating. At a recent forum, I spoke about the benefits of scheduling with finite capacity – allowing you to predict what's going to happen – and one of the attendees said, by way of response: 'That's all very well, but I can't allow capacity to be a constraint.' Yet plainly capacity is a constraint on every process – I mean, there's no such thing as infinite capacity." Another attendee was bemoaning the fact that finance would not allow her to invest in finite scheduling. "I asked her how they managed to deliver on time and it turned out they just had a lot of excess capacity. What's hard to understand is why finance didn't recognise that, by getting rid of the excess and managing the process properly, the company could deliver on time with much lower costs." Too hard wired? Hackwell sees many manufacturers as hard wired into a loop – companies delivering on time either keep a great deal of inventory they don't need or have excess capacity that's costing them money. "Why won't businesses embrace solutions that could help lower costs and improve delivery times, to name but some of the benefits now regarded as crucial to success? "People don't take the two steps back they need in order to see the whole picture. We have many examples of ROI that's been achieved in weeks. Most were in a hole and saw Preactor as a means to help them stop digging. They were being hammered by their customers, who are saying, 'you've got to improve your delivery performance or we're going to take our business elsewhere', so they had no choice but to fix the problem." It's a grim picture: one where companies are purchasing APS (advanced planning and scheduling) solutions, not on the basis of careful evaluation and considered assessment of the strategic benefits – although these may arrive as by-products of the purchase – but because they've reached a crisis. "It's the wrong way round, and you'd like to think they would get around to fixing things before they reached that point, but unfortunately they don't in the majority of cases. They do it because they have to." And what payback do they get when they do see the light and invest? "What APS brings to the table is finite material control to add to a company's finite capacity control. The lack of either one of those will cause issues, in terms of being able to meet and deliver a product," says Hackwell. "Not everyone has materials issues, of course: sub-contractors may have materials free issued to them or at relatively low-cost, so they can work on the principle that they do have infinite capacity supply. For them, classic finite scheduling is ideal. But for those who are performing complex assemblies, with lots of sub-assemblies coming together, or where they have high-value, long lead time components that need to be bought in, there is a distinct materials control problem to run alongside finite capacity problems." Preactor positions its APS solution as a decision-support, rather than a decision-making, tool, demonstrating to planners the ways in which they can improve their processes. "Generally, if someone creates a schedule, it's one schedule and they run with it," explains Hackwell. "What they never get to do is try the alternatives, such as 'what if we change the priorities?' or 'what if we include some overtime?'." So what's stopping manufacturers from doing exactly that? "They don't have the time," says Hackwell. "Which is where the breakdown occurs. They make a 'gut feel' decision about how to fix a situation, but never find out if there might be a better solution that wouldn't cause so many knock-on effects." That can't be allowed to continue through 2005. British manufacturing can no longer afford to continue to make second rate decisions.