Manufacturing Expert Dr Lisa Lang is featured in MoldMaking Technology Magazine

The Secret to Getting On Time and Reducing Leadtimes

Create a competitive advantage by refocusing your job scheduling strategy.

Article From: MoldMaking Technology, Dr. Lisa Lang, President from Science of Business Job scheduling plays a big role in our on-time delivery performance and leadtime, which determines our competitive position within our industry. This is particularly true as competition has gotten more fierce in recent years. Only the best shops have survived. And those shops have very good quality and lead the pack in expertise. This means that scheduling is where and how you can really stand out. But there’s no question that scheduling has its challenges; and, every time we encounter a challenge our schedule is out of date and requires an update. We spend a lot of time updating the schedule. Following are just a few of the common scheduling challenges that cause us to continually update the schedule:

• Clients change their mind
• Vendors aren’t always reliable
• Mix can vary wildly and so our constraint moves
• Employees do not always have the right skill and their discipline is lacking
• Processes are not reliable
• Machines and tools break
• Quality is not near perfect
• Data is not readily available nor accurate nor communicated
• Communication between silos is difficult

Mold shops usually don’t have the luxury of making the same parts over and over again. The mix of work and amount of repair/emergency work a shop has can change so dramatically week to week that their bottlenecks can move, making on-time delivery a real challenge. Most shops have tried a number of strategies to improve their on-time delivery and reduce leadtimes—e.g., updated ERP or scheduling software, used some lean techniques or hired an expeditor—but, the results are usually not substantial. And, that’s because typical solutions address the various symptoms, but don’t address the root cause. So how do you address the root cause? How can you dramatically improve your scheduling?

The Secret Solution

The secret is to stop focusing on efficiency. When you are willing to do that, and put a more effective scheduling system in place, you create a buffer to better absorb all those sources of variability listed above. If you are willing to give this strategy a try and your competitors continue to cling to efficiency, you can create an incredible competitive advantage. So, what does it mean to be efficient? The definition from Dictionary.com is “performing or functioning in the best possible manner with the least waste of time and effort.” Money and cost should be added to that definition. One of the ways we typically apply efficiency in a shop is by keeping all our equipment and/or people busy so that we don’t waste any capacity and have the highest possible utilization. But to keep our key resources busy they all must have a job to work on, and to increase the likelihood that all resources have work, we typically make all jobs in house available to be worked on. “Available to be worked on” means included in our work-in-process. This max’s out your work-in-process and increases the pile of work at every work center. That way all key resources have a very high probability of having something to work on. This is particularly relevant in shops where the mix of work can change from week to week. That’s one of the things we do in the name of efficiency. According to Little’s Law there is a direct correlation between the amount of work-in-process we have and our leadtime. The higher our work-in-process, the longer our leadtimes. Figure 1 is an illustration showing the relationship between work-in-process and leadtime.

The more jobs that wait for their turn, the longer the average queuing time, leading to longer production leadtimes. Example 1 has the most work-in-process and longest leadtime. And, conversely, Example 3 has the least work-in-process and the shortest leadtime. So, as you increase work-in-process, you are also increasing your leadtime—not to mention the amount of cash you have tied up in raw materials. But wait, there’s more—on-time delivery decreases. The diagram does not include the effect of variability. But if it did, it would show that the variability of production leadtime is increased as the queue grows. So the effect of high work-in-process just gets more dramatic the more variability you have. This directly reduces the on-time delivery because it is more difficult to predict the exact production leadtime and to confirm orders accordingly. High work-in-process can also have an impact on quality. Many production failures occur early in the routing, but are detected much later in the production process (usually at final inspection). If work-in-process is high, the average leadtime is also high, causing a long lag time between the production steps and the final inspection. That means the final inspection step occurs a long time after the step that caused the failure. And because so much time has passed, it can be difficult to determine and correct the root cause of the quality problem, making improvement very difficult. Thus, the higher the work-in-process, the harder it is to detect and correct quality problems. All of this leads to why you should stop focusing on efficiency. As you stop focusing on efficiency and reduce work-in-process, here’s what happens: Queue time reduces Leadtime reduces Leadtime predictability increases On-time delivery increases Quality increases Cash flow increases As a result of these improvements, your production leadtime becomes much shorter (if you do it right) than your quoted leadtime. This difference can be used in two ways. First, it creates a buffer allowing you to absorb a fair amount of variability and further enhancing your on-time delivery performance. And secondly, the difference is so big that you can also afford to reduce the quoted leadtime to customers.

 Summary

The combination of a shorter quoted leadtime and 99-percent + due date performance creates a competitive advantage. Understanding that all of this is easier said than done, but it’s not physically hard to do, it is just mentally challenging because we don’t have intuition around this approach. Take some time to digest the negative effects an efficiency focus can have on your shop scheduling. LearnMore: Check out Dr Lisa’s 47 minute webinar How to Get More Jobs Done Faster at www.velocitySchedulingSystem.com/webinar. Contributor:  “Dr. Lisa” Lang is one of the foremost Theory of Constraints experts in the world and a sought after manufacturing expert having been named the 2012 Manufacturing Trendsetter in the USA Today for her inexpensive and guaranteed Velocity Scheduling System Coaching Program that has dramatically improved performance of well over 100 highly custom job shops and machine shops.  She has also appeared in CBS News, The Wall Street Journal, Finance.com, About.com, NY Daily News, CNBC, The Boston Globe, The Miami Herald, and others. She is active in helping reshore manufacturing back to the U.S.  and in the NTMA, PMA, and AMT communities having helped member companies to reduce their lead-times and improve due date performance. She worked with Dr. Goldratt who is the father of Theory of Constraints and author of the bestselling book, The Goal. Dr Lisa is the President of the Science of Business specializing in increasing profits of highly custom manufacturers by applying Theory of Constraints, Lean and Six Sigma to operations with Velocity Scheduling System and to engineering/design with Project Velocity System and to marketing with her Mafia Offer Boot Camp. Here's the link to the article in MoldMaking Technology Magazine:  http://www.moldmakingtechnology.com/articles/the-secret-to-getting-on-time-and-reducing-leadtimes.

http://www.velocityschedulingsystem.com/?p=1470

Job Shop Scheduling for a Custom Material Handling Equipment Manufacturer

By Dr Lisa Lang Here's yet another Velocity Scheduling System testimonial.  This highly custom job shop makes custom material handling equipment.

"We have reduced the time that it takes for a job to go through the shop.  It helped us get control of the schedule, by reducing the scramble of jobs in the shop.  Now we do them in order and everyone in the company knows when to expect a job to be worked on and ready to ship."  Steve, WI.

If you browse the various VSS testimonials, case studies, and results that custom job shops have reported you'll discover that none of the VSS clients are making widgets. None of these shops are doing high volume work of the same widgets over and over. One thing that VSS clients have in common is that they do NOT produce the same things over and over again.  While some jobs, may on occasion, repeat for some of them (or they may make a few things to stock), others don't do any repeat work at all. Job shop scheduling in a custom manufacturing shop is a challenge, to say the least!  But it is this environment that Velocity Scheduling System was developed for. You'll also notice that in some of the testimonials the specific shop is NOT identified.  Why?  Well, Steve in WI and many others don't want their competitors to know how they've managed to gain a competitive advantage.  How is it that they can get more jobs done faster with the same people and resources?  How is it that they've improved on time delivery?  How are they more cash flush and more profitable? To get the results that Steve got or that any of our clients have gotten, you don't need any job shop scheduling software.  VSS is NOT software.  It is a manual, visual scheduling system.  It will work with any ERP software you may use, no ERP, QuickBooks, Excel or whatever software your using now.

http://www.velocityschedulingsystem.com/?p=1815