David & Goliath (Planning & Production)

Lack of resources and skilled labor, shortage of adequate computational tools or even the low quality of data generated by the industry may not be the main problem faced by production planning and control departments, since it is possible to remove these barriers with appropriate investments in technology and process modernization. However, to solve the “freedom” that the shop floor has in not executing the sequencing generated by the PCP, when it defines itself as self-sufficient when choosing which will be the next production orders that will have to be processed in the productive resources, it is necessary change in behavior and culture. These changes, yes, are much more challenging, especially in industries that have been in the market for years. Although we find less and less manufacturers with this type of behavior, it is clear that it is still a chronic problem faced by several planning departments.

In addition to being demotivating to the team, this lack of synchrony between planning and production translates into widespread disturbances in practically all areas that support the factory (with the exception of support departments such as human resources and technology), as their decisions and analyzes are made using production plan as one of the main datasets. Let's summarize how serious this problem is with a simple question: how can we buy materials, matching purchase quantity and delivery date with suppliers, if we don't have confidence in planning to tell us when we will really need that material? I have witnessed heated debates with partners about delays in purchase orders, and, in the end, this delay was not responsible for the impact on the final delivery of the customer order, since the factory executed a production sequence that in no way resembled the one disclosed by planning. This “out of tune” occurs for several reasons; however, I will only address three of these factors, which are the ones I have witnessed most often.

Historical Correlation

In the case of industries with years of existence, we know that their processes were modeled and defined based on existing technologies at the time of their installation, when even the concepts of planning and production control were not widely disseminated and, consequently, known, making it difficult to generate a production plan that adheres to reality. As we have seen in previous posts, such plans are extremely complex to prepare when the planner does not have dedicated tools at hand, as they require, in addition to great knowledge of production processes and their restrictions and constraints, great computational power to perform the calculations needed. Another factor to be considered is globalization and the competition generated by it, which existed on much smaller scales than we currently have, further highlighting the importance of the shop floor, since the low competition relieved the pressure on prices for some business types. In this context, planning departments played a less significant role, with limited responsibilities and representation.

“I just need the material in stock and know what to produce! The decision of how, when, what and where to produce is mine.” This phrase, despite sounding eccentric, was common and was part of the culture of most industries; a culture that, without proper leadership, may have been perpetuated to this day, making it difficult for digitization projects or projects aimed at industry 4.0 to actually be designed in order to bring a tangible benefit to the business. When this is the factor that determines the complicated relationship between planning and production, it requires a leadership change, in top management, to be able to move forward with those process modernization initiatives.

Starting a digitalization and technological modernization project in this type of environment is a challenge on its own. A successful project needs some key factors, one of the main ones is the collaboration and dedication of the current holders of the processes with the consultants and systems integrators; We will address these success factors in more detail in a future opportunity. The company's culture is so relevant that specific methodologies would be needed to detail and price any initiative with the potential to change the current processes established in that industry; however, these methodologies are not effective, as they are based on questionnaires whose answers do not represent what actually happens in the company.

Convenience

When the factory has control and influence to be able to manipulate the production control and planning department, it will do so with its productivity indicators in mind. To understand this reasoning, we need to remember that productive performance varies according to the product being produced, the processes to be followed and the resources and equipment to be used. The production of the same part will have different performance when performed on different machines; or when processed on the same equipment, by using different tools or being carried out by different work teams. We can go further and mention more stable equipment that has a reduced number of breakages or damage caused to raw materials, or even materials that are easier to process, reducing waste and, consequently, improving raw material consumption indicators. In this context, it is easy to understand the desire of production managers to influence the production sequencing of their productive resources, even if this means potential delays in deliveries agreed with customers.

The factory is not the only one to benefit from this type of culture; the PCP himself can rely on this behavior to justify adverse situations in his daily life. This relationship between production planning and manufacturing ends up becoming a symbiosis, in which the entire organization loses. If any delay needs to be justified, it will be done by blaming the production department that did not follow the plan established by the planning department, which may or may not be true. Medium and long-term plans are used to define delivery dates, purchase of raw materials, work shifts, decisions on the acquisition or decommissioning of machines, in addition to several other strategic judgments. These plans are less impacted by fluctuations that occur during execution. Proving what were the real causes of these delays is not a simple task, especially when planners do not have adequate tools to support this task, and it is common for top management to just accept the reasons given by production planning and control, even when these are only verbal, without detailed analysis to support the claims.

Non-Adherent Planning

We cannot fail to mention cases where production planning and control itself cannot meet expectations and continually produce production plans that do not make sense when they actually need to be executed. This is, without a doubt, the most recurrent reason for manufacturing not to follow the released production plan. In these cases, it is easy to put yourself in the shoes of the production area to understand this behavior, which ends up assuming, for lack of choice, the responsibility for the short-term sequencing of its productive resources.

Certainly, there are situations where the intervention of manufacturing in the production plan is unavoidable; for example, when the planning department works only administrative hours and the factory experiences a serious occurrence during night shifts or on weekends, which prevents them from executing the released production plan or completing production orders in progress. In those cases, there are no planners available, guiding which production plan should be followed to reduce or completely mitigate the problems caused by this occurrence. However, in this topic, we are dealing with production sequences that do not adhere to the reality of the shop floor as they fail to consider restrictions and conditions inherent to that production process.

Simplifications made by planning systems, such as MRP and its equivalents, prevent them from generating feasible production sequences. In addition, standard production sequencing modules in ERP systems also fail to allow for proper shop floor configuration and modeling, resulting in sequences that are completely unrealistic. In this context, it is common to use tools developed by planners, mainly using Microsoft Excel as a development environment, to try to mitigate those gaps. The lack of adequate tools, as already discussed in previous texts, is a critical factor that accentuates this situation, but we also have the lack of trained professionals in this matter. The teaching materials on the subject of production planning and control are limited to conceptualizing MRPs and, when these materials address the fine sequencing of production, they do so in a superficial way, without actually addressing situations experienced in reality.

Despite being more frequent, this situation can be resolved with the implementation of systems that adhere to the reality of that industry and with experienced consultants to guide both production planning and manufacturing, understanding in fact that these parameters must be taken into account for the plan to be feasible. Of course, it will also be necessary to work on changing the culture, as discussed in the first topic of this post, since, after years of working following this same process, it is easy to fall into the trap of believing that the current process is better.