“Ah, if only production would do as they’re told,” sighed one of our customers, a supply chain director, recently.
I spent thirty years on factory management committees, so I can testify to traditional quibbling. “I can’t do my production because we’re out of your supply components.” “I can’t deliver to my customers because you haven’t kept to the production schedule.” “Your batch sizes are too big, we have too much stock, but you don’t make the most urgent products.” “You change the production schedule too often, we can’t keep the machines running.”
If you work in factory operations, I’m sure you know what I’m talking about.
Of course, it’s a caricature, but at the same time, there are structural reasons why it’s difficult to line up teams.
Make no mistake about it, the value delivered by a factory is realized by the production teams. It’s the production teams who add value. The Gemba is where it all happens.
In a factory, it’s the production team that operates the equipment, i.e., a major part of the company’s capital investment. It is also generally the one with the largest workforce. Making the most of this machine and human capital is therefore at the heart of its mission—it’s what occupies the time of production managers, and the indicators on which they are judged. Productivity, OEE, time allocated/time spent, etc., are crucial production efficiency metrics.
The supply chain team is responsible for inventory management strategies, another essential component of the company’s invested capital. Inventory can represent the lion’s share of a company’s capital, including workshop work-in-progress. Inventories are in part deliberate investments, but they are also largely symptoms of underlying processes.
The supply chain team carries the customer’s voice and provides supply chain visibility beyond the scope of the shop floor. Conflicting performance measurements, mutual interdependence, and power plays often create dissension between production scheduling and supply chain optimization.
We experience this when implementing Demand Driven scheduling and pull execution processes, based on the DBR (Drum-Buffer-Rope) approach of the Theory of Constraints.
Just as the implementation of DDMRP (inventory management) often goes smoothly because it remains within the supply chain team’s preserve, things become more complicated on the shop floor. Strong joint commitment from production and supply chain managers is critical.
To facilitate synergy, it’s necessary to align teams through cross-functional training and Lean manufacturing principles. Designing target operations together, understanding the impact on performance measures, and experimenting with improvements can drive real results.
Using a digital transformation in supply chain operations can further support alignment. When both teams benefit from enhanced visibility and facilitated processes, half the battle is over.
To learn more about Demand Driven scheduling and its benefits, visit our Scheduling & Execution page.
