How to Manage Supply Chain Planning Priorities

By Bernard Milian
colored confetti falling on a podium, illustrating the way many companies set supply chain priorities

Managing priorities is the daily business of our planners, our production supervisors, and our supply chain managers, who constantly have to decide: What should we do first, what second, and what next?

Your company’s operational efficiency depends heavily on its ability to make these decisions clearly, quickly, and without headaches. If it means extracting data, grinding through three interrelated Excel files, and asking Albert, who is the only one who knows the equipment… well, it’s likely to be complicated. Especially since Sylvain disagrees with Albert, and in the meantime, a new priority has come up, the equipment has broken down, and Quality has blocked a batch.

Determining priorities easily as we go along requires, as we have seen in previous articles in this series, an effort to organize — to design our operating model, following some key principles.

4 Tips for Managing Supply Chain Priorities

1. Limit work in progress

What’s the best way to avoid drowning in priorities? Have fewer of them. The fewer open orders you have, the fewer conflicts you are likely to face.

Start production only when it is convenient to feed your constraints and your pacemakers’ stations without interruption. Make sure that the flow of orders to your suppliers is compatible with their capacity. Only release production orders for which you have the components. These are all simple, common-sense rules, but they require the right processes and tools to be put in place. If you launch everything in infinite capacity and push the work in the workshop or at your suppliers, crossing your fingers that it comes out on time, you will spend your time arbitrating priorities… and delays.

2. Limit the number of control points

There’s no need to track every step of your material flow — order milestones, releases, shipping, inspection, all routing operations — and to try to maximize the productivity of all workstations.

Instead, take two steps back and position the critical control points on your flow, by which you will be able to control progress and arbitrate between the priorities of your different orders. Decoupling points, key queues, and bottlenecks. You will only drive by these critical points, and focus the teams’ attention on these points, without dispersing them.

3. Distinguish between order generation and order execution

It is important to generate an order at the right time, considering each item’s lead time, the actual customer demand, the target stock ranges, and the capacity. This is what is described in DDMRP as the planning phase. It ensures that you organize a procurement and production flow that supports your consumption rate. For this purpose, a distinction is made between planning priorities.

During production, we will then release that order — that is, authorize the shop floor to begin work. To ensure that this is realistic and that we limit WIP, we need a synchronized release signal on our critical manufacturing steps, and to ensure that we have the complete set of components to start each operation.

Finally, we control execution priorities, i.e., we put this order before another, we selectively call on a supplier, we ship this batch by air rather than by sea, etc. These priorities identify exceptions that need to be addressed at execution time.

Mixing up order generation, release, and execution follow-up creates a lot of confusion in the way the information is processed and the roles and responsibilities of each person. It also creates a lot of hubbub.

4. Implement a visual management system

Organizing tasks according to a simple red/yellow/green scheme makes them easy to understand. Indeed, there’s nothing like it to drive priorities across an organization.

If, during your five-minute production team meeting, everyone sees the same red/yellow/green priorities, there will be no debate about what should be done first. If suppliers see the same red/yellow/green priorities that you do, they will always be able to align themselves with your priorities.

To do this, you must first define, position, size and adapt your buffers — particularly stock and time buffers — to generate clear and accurate visual signals.

ERP and Priority Management

Unfortunately, your favorite ERP can’t offer help when it comes to managing supply chain priorities.

Instead, its basic logic assumes infinite capacity and uses work in process to generate milestones at each operation without distinction. The generation and execution of orders are inextricably linked — based on date adherence, projected stocks, and safety stocks. And the visuals are far from intuitive — to say nothing of the spreadsheets that are required to firm up plans.

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