The Process of Production
Scheduling
Manufacturing organisations
allocate significant funds to acquiring plant, machinery, equipment, and
buildings to support their production operations. Effective control of these
resources is crucial to optimising manufacturing costs per unit and maximising
the return on investment. By doing so, organisations can enhance the efficiency
and potential of their manufacturing facilities.
Efficiently utilising
manufacturing resources reduces costs and improves service levels. This is
essential for ensuring the organisation's long-term financial stability,
sustained growth, and increased turnover, sales, and profitability.
Organisations can achieve these objectives and strengthen their economic
standing by managing their manufacturing resources effectively. The most common
manufacturing strategies are:
- Make-to-Plan (MTP): The manufacturing facility formalises
the products into the plant's production plan. The products may be
dispatched immediately, stored, or used in another manufacturing process.
- Make-to-Order (MTO): Products are manufactured
according to customer sales orders.
- Assemble-to-Order (ATO): The products are manufactured using
MTO or MTS processes, and the generic product is assembled to tailor the
finished product(s) to the customer's specification before being
dispatched.
- Make-to-Stock (MTS): Like MTP, the manufacturing
facility makes the products that have been formalised into the
manufacturing plan. The products are stored awaiting order dispatch.
Manufacturing organisations
typically adopt a pricing-oriented approach, aiming to maximise production runs
to minimise the cost per unit. This is achieved by implementing manufacturing
strategies such as MTP, MTS, or ATO. These strategies are beneficial when
manufacturing capacity is costly to reduce. At the same time, the cost of
maintaining inventory is comparatively less expensive.
Maximising Production
Efficiency
One effective manufacturing
practice is ATO, which reduces inventory levels by replacing multiple lines of
different finished goods inventory with a single generic product. This generic
product can then be customised according to each customer's requirements before
it is dispatched. By adopting this approach, manufacturing organisations can
streamline their inventory management processes and minimise the costs of
holding excessive inventory.
Various organisations opt
for manufacturing processes that offer flexibility to accommodate customer
requirements, with service provision being the primary factor influencing
manufacturing capacity. The prevalent manufacturing strategy employed in such cases
is MTO, as the expense associated with inventory maintenance is significant,
and fulfilling customer needs takes precedence.
To enhance production
capacity, organisations focus on utilising methods and technologies that
minimise the expenses related to transitioning production lines between
assorted products. This is achieved by implementing batch manufacturing
processes, allowing efficient production while catering to varying customer
demands.
Organisations can
effectively manage their manufacturing operations and adapt to changing market
demands by prioritising customer satisfaction and operational efficiency.
Strategically utilising MTO and batch manufacturing processes enables
organisations to optimise their production capacity and meet customer
requirements cost-effectively.
Effective Sales Order
Management
With the market's evolution,
organisations can now cater to a broad range of customer needs and
requirements. Unlike the early days of the industrial revolution, when
simplicity and uniformity were the norm, today's organisations are equipped
with advanced technology that allows them to customise their products or
services to meet the diverse demands of the market. This shift in approach has
been driven by customers' changing expectations and desires, who now expect a
more personalised and tailored experience.
The famous quote by Henry
Ford, "the customer can have any colour so long as it is black," no
longer holds in today's market landscape. Organisations are now focused on
understanding and fulfilling the unique requirements of different customer segments
rather than adopting a one-size-fits-all approach. This customer-centric
mindset has led to the development of various products or services that cater
to specific preferences, ensuring customers have multiple options.
As a result of these
changes, organisations can now target specific market segments with tailored
products or services that meet and exceed the needs and preferences of end
users. This shift towards customisation and personalisation has enhanced
customer satisfaction and enabled organisations to maximise profitability by
tapping into niche markets. By leveraging technology and innovation,
organisations can adapt to the evolving market dynamics and stay ahead of the
competition.
Product Marketing
In today's marketing
landscape, the dynamics have shifted significantly. Unlike during the
industrial revolution, when organisations were solely responsible for pushing
their products and services into the market, consumers now have power.
Organisations no longer drive technological advancements in products and
services but are pulled by consumer demands. This shift has transformed the
market into an opportunity that organisations must adapt to rather than a
controllable aspect of their business.
The challenge for
organisations in today's diverse market is not being market innovators but
rather keeping up with and meeting the ever-changing needs of consumers. While
organisations can still introduce innovations that temporarily shape and
control the market, consumer demands eventually take precedence. As a result,
the market transitions from being driven by organisational innovation to being
dictated by consumer demand, influencing the development and offerings of
products and services.
The key for organisations is
to recognise that the market is now consumer-led and controlled. Instead of
trying to control the market, organisations must embrace the idea that
consumers can shape and influence the direction of product and service development.
By understanding and
catering to consumer demands, organisations can effectively serve the market
and stay relevant in an ever-evolving business landscape. This shift requires
organisations to be agile and responsive, constantly adapting their strategies
to meet the needs of the consumer-led market.
Manufacturing Scheduling
Organisations need help
managing their manufacturing and distribution supply chains due to the
complexity of diversified markets. These markets require organisations to cater
to a wide range of product and service needs, and ineffectively managing manufacturing,
distribution, and inventory resources can result in losing competitive
advantage.
Therefore, it is crucial for
organisations to strategically align their resources with the diverse needs of
the market to succeed. Order management is a complex series of routine events
that transfer a sales order into a sales invoice by undertaking the following
steps:
- The sales order is received and
input into the organisation's sales order processing (SOP) system.
Products or services are typically detailed by product code, description,
price, and quantity required.
- After inputting the sales order, a
manufacturing or purchase order might be created detailing similar
information required to manufacture or purchase the products or services.
This system is the organisation's manufacturing planning or purchase order
processing (POP) system.
- Once the manufactured or purchased
products or services have arrived, the organisation must input the details
into the SOP system detailing the products or services by product code,
description, price, and quantity received.
- When the finished goods inventory
exists for a sales order to be fulfilled, the sales order must be
converted into a pick note, which details the organisation's staff and
what products and quantities must be assembled before dispatch.
- Once assembled, the sales order is
confirmed on the organisation's processing system by producing a pick note
confirmation transaction, which generates a sales order delivery note.
- Sales orders are collected by the
distribution or third-party logistics function for delivery to the
customer. Sales orders are confirmed as being delivered upon confirmation
that they have been dispatched or upon receipt of a signed delivery note.
The details will be updated on the SOP system to confirm that the delivery
note has been delivered.
- Confirmed sales order delivery
notes generate customer sales invoices, which are then sent to the
relevant customer for payment.
Materials Requirements
Planning
The process described above
must consider the importance of having a bill of materials (BOM) for
manufactured products. A BOM provides a detailed list of the raw materials,
parts, and sub-assemblies needed to produce the finished goods. By utilising
materials requirements planning (MRP) processes, the demand for materials in
finished products is traced back to ensure that raw materials, parts, and
sub-assemblies are available before manufacturing begins.
Multiple levels of BOMs may
need to be managed, manufactured, or purchased to facilitate the production of
finished products. This ensures the necessary components are in place to
assemble the final product. The intricate nature of manufacturing results in a
continuous flow of raw materials, parts, and sub-assemblies into the production
process, highlighting the importance of proper planning and coordination.
Recognising the significance
of a BOM and implementing materials requirements planning can help
manufacturers streamline their production processes and avoid delays or
shortages in the supply chain. This initiative-taking approach allows for
efficient resource allocation, timely procurement of materials, and the
successful manufacturing of high-quality finished products. Embracing these
practices can improve productivity, cost-effectiveness, and overall operational
efficiency in the manufacturing industry.
Distribution Management
The distribution
requirements for an organisation's products and services can result in a
complex flow of outbound products and services related to standard operating
procedure requirements. Sales orders are sent to various entities such as
manufacturers, wholesalers, distributors, or retailers, all requiring finished
goods inventory to fulfil customers' demands.
This scenario is not limited
to just one organisation but extends to other entities responsible for meeting
these supply needs. As a result, a supply chain from raw materials to end-users
is established, characterised by its complexity and diversity. Effective
information management is essential to successfully address these intricate
supply chain requirements.
Ensuring that the flow of
products and services is managed efficiently is crucial for organisations to
meet the demands of their customers and maintain a competitive edge in the
market. By establishing effective communication channels and utilising technology
to streamline processes, organisations can navigate the complexities of
distribution needs and supply chain management effectively. This
initiative-taking approach can lead to improved customer satisfaction and
overall operational efficiency.
Management of Data and
Information Streams
Contemporary systems like
sales order processing (SOP), purchase order processing (POP), and material
requirements planning (MRP I & II) play a pivotal role in automating most
of the material manufacturing and procurement tasks. Efficiently managing these
information systems ensures that demand requirements are met and supplier
deliveries are made on time. Any delays or disruptions in the supply chain due
to late deliveries or missing materials can have severe consequences,
potentially halting the entire supply chain operation.
The seamless integration of
systems between an organisation, its customers, and suppliers has
revolutionised how information is shared and processed. This integration allows
accurate system communication, giving customer service coordinators real-time
access to order status information. The live data empowers them to effectively
manage sales orders and provide timely customer updates, enhancing overall
customer satisfaction and operational efficiency.
Leveraging advanced
technology and interconnected systems can streamline operations and improve
supply chain management. The ability to track orders, monitor inventory levels,
and coordinate with suppliers in real-time ensures smoother operations and reduces
the risk of disruptions. Effective management of these systems is crucial for
maintaining a competitive edge in today's fast-paced business environment.
Providing supply chain,
procurement, and logistics personnel with consistent visibility at key stages
before sales orders are sent downstream in the logistics chain is crucial for
optimal efficiency. The most streamlined and productive systems only require a
sales order to be entered once, with the system automating the subsequent
transactions needed to convert raw materials into finished products.
Organisations can minimise
delays, reduce errors, and enhance overall operational performance by ensuring
that all relevant staff access the necessary information and processes before
dispatching sales orders. This approach simplifies the workflow and increases
the speed and accuracy of transforming raw materials into finished goods,
ultimately improving customer satisfaction and profitability.
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quality, efficiency, and effectiveness of their product and service supply to
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