LEADING QUESTIONS FOR PRODUCTION DESIGN:
- Do we have sufficient capacity to meet or sales target?
- Can we eliminate capacity bottleneck by outsourcing production?
- What is the added value of our product mix managed by our sales team?
- How can we increase added value despite our constrained capacity?
- How sensitive is our production costs to foreign exchange fluctuations?
- What can we do if the apparently profitable sales orders, when in fact the are loss makers?
DESIGN PARAMETRIC PRODUCTION TO:
Account for dynamic constraints to balance incompatible targets.
Design resources, processes, variables, parameters and targets completely.
Test performance by simulating targets and constraints.
Use prices, promotions and operating volumes as parametric decision variables.
Adjust customer service level to achieve strategic profitability.
Save time by reducing analysis and decision making time from weeks to hours.
USE THE PARAMETRIC PRODUCTION DESIGN TO MAKE DYNAMIC DECISIONS.
Balance sales quantity targets with capacity constraints to achieve coherence and consistency among all business processes and units. To this effect;
- Measure capacity as quantity per hour.
- Start from theoretical machine hours as 720 hours per machine per month.
- Deduct from 720 hours, holidays (official and religious), planned maintenance hours, hours lost during chift changes, hours lost to tooling changes, and unplanned interruption hours such as power cuts, breakdowns, etc. to reach practical attainable hours available for production per machine per month.
- Clone on Reflex, the parameters of PRODUCTIN DESIGN such as Machines, Routes and Product Trees, as replicas of the ERP system.
- Set semi-finished product Target Inventories.
- Use the same concept of “days required” in the SALES DESIGN, to decide the days necessary to keep the production going when switching form one production phase to the other. This way semi-finished products serve as buffer stock automatically and can be used for example, to accomodate unplanned power cuts in scheduling.
If and when Reflex faces a bottleneck in capacity, it automatically tries to overcome the bottlenck by taking the following corrective actions:
- It shifts production to alternative routes if they are specified by the user
- It reduces gradually the number of days required given in Target Inventory of Finished and Semi-Finished Products
- It goes back to the previous month preceding the month of the bottleneck and uses the excess capacity to produce buffer inventory to carry to the following month to overcome the bottleneck. If the buffer stock falls short, then it goes back 2 months preceding the bottleneck. This iteration is repeated until the last permitted preceding month is reached, which may be the first month of the budgeting period.
If Reflex cannot overcome the capacity bottleneck it stops working automatically and signals that given scenario parameters are conflicting and should be revised manually. At this point outsourcing needed capacity becomes a solution alternative at the discretion of the user.
Manual revision may require lowering sales targets, designing new production routes, revising product trees, and investing in new machines. Even changing the type and nature of raw materials may change capacity calculations.
Automatic stopping of Reflex is an emergency measure ensuring that monetary values can only be assigned if all the quantity flows from end to end are coherent and consistent with each other and with the system as a unified whole. Reflex prevents making wrong decisions at the earliest possible stages of scenario simulations.