Author: David Dehne

ERP is an Oxymoron

Have you ever had one of those moments when a thought hits you that is so obvious that you wonder why it never occurred to you before? I just decided that there couldn’t be a technology less aptly named than Enterprise Resource Planning, more commonly known as ERP.

Before I go into why, let me lay the groundwork so we’re all using the same terminology.

What is ERP?

From a manufacturer’s perspective, ERP was born with the addition of MRPII to the core financial functionality already found in existing systems. Pretty much all of these early systems provided modules for GL, AR, and AP. (Sometimes called “GLAPAR” in industry jargon.) Many of the early ERP solutions provided some procurement functionality as well as sales orders, though not many offered manufacturing-oriented functionality like the ability to configure products on the fly.

Sometime in the 80s, ERP vendors realized if they wanted to target the manufacturing sector, they needed to provide tools to help manufacturers deal with what is arguably their biggest issue: inventory. That’s when Material Requirements Planning (MRP) – a concept that had been around since the 50s – was codified in software form.

There is a belief that manufacturers are slow to adopt technology. I think it’s more that technology is slow to adopt manufacturing. Historically, ERP vendors have focused on manufacturing last, and many never quite get it right.

And that leads me back to my original premise: ERP is an oxymoron.

Garbage In/Garbage Out

As Trey Jordan recently wrote in his post Going Lean: Should You Replace Your ERP System? (insert link), ERP systems are great at collecting financial transactions from all over the enterprise. The E in ERP is just fine. My problem is with Resource and Planning.

In this post, I’m just going to look at inventory, since many ERP systems don’t even try to manage capacity. If you want to look at this from the capacity perspective, you might enjoy our white paper: The Next Generation of Planning and Scheduling Solutions.

The core resource planning tool in ERP systems is, of course, MRP. Put simply, MRP looks at future material requirements and works backward using inputs such as current inventory levels, order lead time, and so on to create time-based requirements for raw materials and components.

In theory, that makes perfect sense. If I want to make 100 widgets by the end of the month and it takes me two weeks to do it, I need to make sure I have the materials available by mid-month in order to reach my goal. If some of the materials required are subassemblies built in-house, then the system issues production orders so they will be available when needed as well.

The problem lies not in the algorithms, but in the inputs. Or to use a technology axiom that’s been around even longer than MRP: Garbage In/Garbage Out.

Where does the order for 100 widgets come from? The quick answer is the production schedule, but what are the inputs into that? In push-based manufacturing environments, the primary input into the production schedule is the sales forecast.

Therein lies the problem.

Sales forecasts are always inaccurate; the only question is by how much. I just Googled “sales forecast accuracy” and got 2 million hits, most of them having to do with why sales forecasts are always wrong. I skimmed a few of the results to see how accurate forecasts are on average, and the answer seems to be around 75%.

However, many of these articles and posts looked at forecasts from the perspective of the sales team: Did sales hit the numbers? A 100% accurate forecast from the perspective of the VP of Sales can still be wildly inaccurate from the perspective of production if the products sold were different than those forecasted.

Wisely, many manufacturers have learned not to trust the forecasts generated by sales. They hold weekly S&OP meetings to look sales leaders in the eye and review what’s in the forecast so they can adjust their production schedules based on what seems realistic and doable. These meetings can get tense. And, as much as the participants would like to apply proven processes to their S&OP meetings, they don’t do much to fix the core problem: Everyone is still guessing.

Manufacturing Demands a Different Approach

Maybe I should cut the ERP vendors a break. It’s not that their systems are coded poorly; it’s that they start with the wrong premise. That is, they were developed for push-based manufacturing, a generally accepted practice even though MRP has never been proven to provide the sustainable performance improvements manufacturers need.

The opposite of push-manufacturing is pull, where resources (including capacity) are synchronized to customer demand. Pull is a core element of manufacturing principles such as Lean Manufacturing and JIT Inventory Management, so many readers are probably familiar with it. We often used pull-manufacturing or pull-replenishment synonymously with Demand-Driven Manufacturing, though our software Platform also applies other core principles of Lean such as Theory of Constraints.

If you’re tired of dealing with an Enterprise Resource Planning application that does nothing to help you plan resources effectively, I encourage you to investigate Demand-Driven Manufacturing. Our website is filled with white papers, articles, on-demand product demonstrations, and case studies that can help you learn more. If you’re brand new to the concept, check out our YouTube video: What is Demand-Driven Manufacturing?

June 18, 2018
Going Lean: Should You Replace Your ERP System?

By Trey Jordan, Senior Software Consultant

Enterprise Resource Planning (ERP) has been around for decades. You’d think, by now, the industry would have it figured out. Yet, every year, we hear news about ERP implementations that fail. For every one of these high-profile flops, there are many, many more implementations that simply fail to live up to expectations.

At some point in their Lean journey, nearly every manufacturer faces the same decision: Do you take the time to fix or replace your broken ERP systems or just keep working around them?

Is “Rip and Replace” Really Worth the Effort?

If you’re even a modest-sized manufacturing enterprise, you’ve probably already sunk hundreds of thousands of dollars into your ERP system. If you add up everything including the software costs, implementation, training, maintenance fees, etc., the actual figures can get pretty scary.

Perhaps even worse than the costs, though, is the chaos that typically surrounds an ERP implementation. Some years ago, Gartner created a model called the Hype Cycle that they used to represent the life cycle of a technology. Though the intent was to represent technology as a whole, I think it also pretty well represents what we see in a typical ERP implementation. The only difference is that many manufacturers never emerge from the Trough of Disillusionment.

Gartner Hype Cycle

Does Your ERP Implementation Meet Expectations?

Depending on what study you reference, roughly three-quarters of ERP implementations fail to some degree. Many studies look specifically at whether or not the implementation finished on-time and on-budget. They often fail to consider whether the ERP system helps the organization achieve its desired objectives. If that were factored in, I suspect the percentages of “does not meet expectations” implementations would climb even higher, especially in manufacturing.

The challenge is that Lean Manufacturing, which unquestionably can help manufacturers achieve a wide variety of bottom-line benefits, requires a pull-based approach that is tied to customer-demand (throughput). ERP systems, with their forecast-driven, push-based approach to resource planning and production scheduling, aren’t necessarily designed to support a Lean environment. Even most ERP systems that claim to support Lean Manufacturing are still built around push-manufacturing, with pull implemented using a variety of add-ons and workarounds.

Interestingly, if you do a Google search on why ERP implementations fail, you will get lots of different answers, from lack of executive support to poor change management practices to unrealistic expectations. All of these may be valid, but they fail to address the core underlying issue: the ERP system wasn’t designed to work in a Lean Manufacturing environment.

Even if ERP systems were easier to implement, success isn’t likely to be achieved even with a new ERP system when success is measured against desired outcomes such as increased velocity and reduced inventory levels. So, why would anyone go through the hassle of replacing their ERP system as part of their Lean journey?

ERP: What is it Good For?

Now that I’ve completely ripped apart the concept of ERP, let me head back in the other direction for a moment. While ERP doesn’t do particularly well at resource planning and production scheduling, it does have its uses.

For most organizations, ERP is the system of record for all financial transactions and information. As things happen in the business, e.g., something is bought, sold or produced, these events trigger financial transactions that flow through the ERP system and eventually to the general ledger.

In addition, ERP is also the backbone of the sales system. Whether your sales team is using the sales order module that comes with your ERP system or add-on applications for configuration, pricing, and quotes, the ERP system is the system of record for master files such as bills of material, pricing and customer information.

Likewise, your current ERP system can create a solid backbone for a Lean implementation as it can provide the master data information needed and collect the financial transactions that result from production. You just need to overcome the inherent shortcomings of ERP in a Lean environment. For example, SyncManufacturing synchronized planning, scheduling and execution software (part of the Synchrono® Demand-Driven Manufacturing Platform) sits on top of your current ERP application(s), giving you the power to transform a push-based production environment into to a demand-driven, pull environment. It doesn’t really matter which ERP you use; SyncManufacturing can accept data from any source – even multiple ERP systems.

Related post: The Pros and Cons of Consolidating ERP Systems

But What if You Don’t Have ERP?

Occasionally, I will run across a manufacturer that doesn’t have an ERP system at all. Much of the time, the manufacturer started out as a small job shop using no more than a simple financial system and a few spreadsheets to manage their operations. Over the years, the business grew, and perhaps even changed manufacturing modes, but their systems didn’t quite keep up.

The question I often get from this type of manufacturer is a bit different. They want to know: Do I need to implement ERP at all in a Lean environment?

The answer is not necessarily. Technically, all master data (resources, items, BOMs, routings, inventory, purchase orders, and sales orders) can be entered and maintained directly into SyncManufacturing planning, scheduling and execution software. SyncManufacturing is also creating inventory transactions as parts are produced, consumed, received, and shipped. The business will probably want some sort of financial system of record to collect financial transactions and produce reports, but it is not strictly necessary to have even that to implement Lean using SyncManufacturing software. It is certainly not necessary to have MRP or production scheduling functionality in place before implementing Lean.

Still have doubts? That’s not unusual. Early in our careers, most of us were taught that getting MRP right was the key to improving results. It’s hard to give up MRP and ERP, if not totally, at least as the keys to all our operational challenges. But no matter where you are in your journey, I welcome your questions and comments. Please add them below or reach out to me directly, and I will do my best to respond to each and every one.

June 11, 2018
The Pros and Cons of Consolidating Manufacturing ERP Systems

Managing operations through multiple manufacturing systems can be challenging, but it’s a daily reality for many manufacturers. In this post, we’ll look at the pros and cons of consolidating ERP systems – and propose an alternative.

When Two Worlds Collide

Whenever two or more organizations merge, they are almost always using different ERP systems. As anyone who’s ever tried to consolidate an ERP systems knows, it’s not easy.

Each organization chose their respective ERP systems for a reason. For instance, one facility might operate in a make-to-stock mode and the other in a make-to-order mode even though they manufacture the same types of products for the same customers. Addressing local regulations and business practices is another common (and good) reason for implementing one manufacturing system over another.

Even if their chosen system isn’t perfect, the users in each facility may have learned it well enough (or customized it enough) to work around many of the application’s shortcomings. I’ve seen people who told me they HATE their ERP system fight tooth and nail to keep it when told the organization was considering replacing their system with the same system used at corporate or at another facility.

The 3 Cons of Consolidation

The first con of consolidation is obvious – consolidating ERP systems is hard on your employees. Even those who are willing to get with the program are going to have to learn an entirely new system. That takes time and money and eats into productivity.

Then there are the real and valid reasons why facilities chose different systems. Even if the ERP system on which the company decides to standardize is flexible enough to handle multiple manufacturing modes and other unique requirements, there will still be challenges. For instance, different setup parameters and customizations may mean that the systems won’t talk to each other the way you had hoped.

Finally, there is the expense of consolidation. ERP systems can cost hundreds of thousands to millions of dollars – just in software costs alone. Though some vendors offer ERP on a more budget friendly subscription basis in a SaaS model, the costs can still be considerable if you have a lot of users. Plus, you still have the upfront costs for things like implementation, training, customization, and so on.

The 3 Pros of Consolidation

If a consolidation project goes as planned – and that’s a big if – the company is probably hoping to gain benefits such as:

Simplified support and maintenance – Theoretically, if everyone is using the same system, user support should be easier. I don’t want to discount this benefit because it’s one that can be achieved, though it can take years to get there and may require functional compromises.

Increased visibility – Management wants to have a clear picture of what is happening across the enterprise. With disparate systems used in each of the facilities, getting accurate KPIs is a challenge. Getting KPIs in real time is next to impossible.

Decreased lead times – If the organization is vertically integrated, with facilities supplying each other, increased visibility into capacity and material availability across facilities should allow production managers to optimize production schedules and resource utilization. In my experience, though many ERP vendors claim to be multi-entity capable, in practice, their ability to handle cross-facility resource management varies widely.

Is it Time to Take Your Lean Initiative to the Next Level?

The Synchrono Demand-Driven Manufacturing Platform can help you achieve the consolidation benefits you’re looking for plus the benefits of Lean for a fraction of the cost and without the loss of productivity and sheer chaos of an ERP consolidation initiative. Here are just a few examples:

One version of the truth – Our Platform sits on top of your ERP systems, so there is no need to rip and replace any of them. We can consolidate information from disparate systems and serve up data and insights in role-specific dashboards.

A sample dashboard from SyncView software

In the video, How Orbital ATK Enabled the IIoT and a Visual Factory, Orbital ATK’s systems architect shows a graphic of all the different systems from which their Synchrono implementation pulls data. The entire video is well worth watching, but if you just want to take a quick peek at their chart, it’s at about 5:15 in the recording.

Management by exception – Trying to keep your eye on everything that is happening across facilities can drive you crazy. Our visual platform allows you to see status across your enterprise and drill down on those that require your attention, to better understand the root cause of the issue.

This bird’s eye view of the entire enterprise was taken from the webinar Visualizing Metrics in the Factory of the Future.

Pull-based replenishment – Demand-driven inventory management is a core principle of Lean, and our eKanban software allows you to send electronic replenishment signals across facilities. You can also bring your suppliers into your Lean initiative – and improve supplier collaboration, visibility and performance – with our supplier eKanban capabilities and supplier communication portal. Watch a demo.

Synchronize resources across facilities – Our exclusive CONLOAD™ scheduling algorithm drives production flow across facilities by controlling the release of work into production based on the availability of people, machines, materials, etc. and managing constraints using principles from the Theory of Constraints. Watch our YouTube demonstration.

Capable to promise – Because we can access and manage data across multiple enterprise systems (and machines, sensors, etc.), our capable to promise functionality provides a true picture of what can be produced and when.

Learn More

Consolidating ERP systems is such a burdensome, disruptive process, it’s worth taking the time to at least consider the alternatives. In addition to the resources I’ve already shared throughout this post, here are a few more I think you’ll find helpful:

Article: What is Demand-Driven Manufacturing?

White paper: E2E Supply Chain Visibility Technology is Here

Video: How to Synchronize Production Planning, Scheduling, and Execution

June 4, 2018
Three Ways Leaders Create Lean
Three Ways Leaders Create Lean

“Relentless” leadership and team empowerment drive lean change

For those of you who have heard this before, it bears repeating. For those of you who have not, this is important – leadership is the single most important component to lean success.

It is exciting to talk about bottom-up change and expect that a ground swell of individuals in virtually every level of the organizational chart can succeed with lean—in spite of those in the C-suite that just don’t get it. But in practice, this has to happen early on or there is little-to-no chance of success.

Who’s driving this thing?

I am not saying that lean changes cannot start from the bottom-up; but the situation needs to flip quickly to leadership driving the bus. That’s because at some point early on in your lean journey, your methods will start to conflict with some long-standing processes and metrics. These formerly sacrosanct topics need to be addressed by leadership (those with the power to change them) before your journey can continue.

Once leadership is on board, the leader(s) can come from anywhere in the company. But to prevent stagnation at a higher level, leaders must carry the torch of continuous improvement tirelessly and relentlessly.

80/20 rule

They can start out leading the kaizen events but they need to mentor and train those doing the work in order to keep continuous improvement alive and well. Mature lean organizations expect 80% of their improvements to come directly from those closest to the work. This is the only way to fully utilize the talents and capabilities of your human assets. Give the people closest to the work the tools and the support necessary to astound you with their creativity and innovation.

Out on the floor

Gone are the days where leaders sit in their offices sending out directives to the rest of the organization and lead mainly by pounding on the rest of us when those directives are not met. Today, leaders are responsible for training and mentoring their people. They equip them with the tools of continuous improvement and empower them to remove the obstacles that block their way. Here are some ways I have seen manufacturing leadership create a more demand-driven culture:
- Of machines and men (or women) – Leaders who think of their production staff as extensions of their equipment are making a fatal error. Empowered people who feel their bosses care about keeping them on staff by growing their skills and offering development opportunities are the people who will drive the changes needed to make your business excel.
- “Scaffolding” support – It is a huge mistake to treat your people like their only role is to follow the standard operating procedures (SOPs) handed down from above and that the only way they drive value is when their direct labor hours are being absorbed into products. You are under-utilizing the most valuable assets in your organization. It doesn’t happen overnight and without any effort, but you must build the scaffolding needed to support your people by giving them the tools, confidence, and authority to make changes. It is the people closest to the work – and who know the most about the process – that can provide the greatest innovation if you build the foundation on which they can innovate.
- Training rolls on- Training should never stop. I hear the complaints and the unending list of obstacles – no time, no budget, where to begin, no senior-level support, and so on. But every moment spent training your people yields ongoing hours saved in fixing mistakes, putting out fires and trying to explain your poor results to the powers that be. Equip them with the tools, confidence, and abilities to speak up when something’s wrong; show them how to look for solutions and take ownership of results, and you are tuning up the “true improvement machine” on your shop floor and beyond.
I have been working with supply chain professionals and manufacturing leaders my entire career. If there is one thing I can say about the successful ones, it’s this: Effective change agents in manufacturing environments invariably spring from a leadership culture that supports the people not just the change — every step of the way.

– John Maher

John’s passion for demand-driven manufacturing is equal to his interest in how this method improves the lives of employees within these environments. “I’m here to help, not to judge” comments John whose posts reflect why demand-driven matters and are based on his experience working in manufacturing environments and expertise in ERP, MRP, APS, supply chain, manufacturing planning and scheduling systems and constraints management.
May 21, 2018
Are Your Manufacturing Metrics Meaningless?

It seems not a week goes by when I don’t hear from someone in manufacturing: “You can’t manage what you can’t measure”. Of course, there is a lot of truth to that statement, but as someone who spends all day, every day, helping manufacturers gather real-time data for better operational performance, I believe the statement is incomplete. The axiom should be: “You can’t manage what you can’t measure consistently and accurately.”

Take the example of On Time Delivery (OTD). In any manufacturing environment, delivering what you promised when you promised is good business, so measuring this metric makes sense. However, as simple as this metric should be to measure, it can get complicated. Consider this scenario:

The Challenge with Measuring On-Time Delivery

Bob in sales promises a customer that their order will be shipped by the 15^th of the month. The factory comes back and says, given the current production load, there is no way we can get the order out the door until the 25^th. The order isn’t big enough, nor has the customer done enough business with the company, to warrant upending the production schedule to meet the promised delivery date. As a result, the factory’s understanding of the promise date is the 25^th, while Bob’s (and the customer’s) is the 15^th. Who’s right?

Let’s say the customer’s order history does warrant upending the production schedule, but that throws off the delivery date for several other orders. These customers are accommodating, so despite the chaos in the factory, the change doesn’t result in any lasting harm. If the factory then delivers these orders by the new promised delivery date, are they still “on time?” What if the customers whose orders were affected hadn’t been so accommodating?

Later that month, the factory manager is called on the carpet by the CEO because according to his monthly reports, the factory’s OTD rate is less than 50%! (The report IT creates for the CEO compares the original promised date against the actual delivery date.) The factory manager pulls out a spreadsheet showing the production schedule against actual delivery. According to his figures, the factory’s OTD rate is 95%. Not perfect, but darn good. Is the factory manager’s position defensible?

Making Manufacturing Metrics Meaningful Again

Let’s take a look at a few of the challenges presented in the above scenario and how Synchrono can help resolve them.

#1 One version of the truth – The factory manager’s spreadsheet is the type of “red flag” we look for when clients call us in to ask how they can improve operations. Spreadsheets in manufacturing almost always mean that people are working from different versions of reality. Not only is there a question of where the data comes from, but studies also show that a good portion of the spreadsheets used in business contain errors. Creating a common definition for key metrics and then letting a system, such as SyncView from Synchrono, serve that KPI up in a dashboard helps ensure everyone is working from the same version of the truth.

Related Post – It’s Time: Manufacturers Need to Cut Ties With MRP and Spreadsheets

#2 Bridging the Divide Between Production and Sales – In many facilities, the last thing the production scheduler wants to do is take time out of their day to negotiate with sales. Every call could mean a change to their carefully crafted schedule. For their part, sales is more interested in closing business. If they’re promising unrealistic dates, well, they can always ask for forgiveness later.

SyncManufacturing considers all resources when calculating capacity: materials, people, processes and equipment – and delivers a “capable to promise” date (CTPD) that the factory can meet given current supply and workload. Many Synchrono customers give sales access to this information during the sales process, eliminating unrealistic promised delivery dates or the need for sales to call the factory. In the example above, Bob would have been given a CTPD that he could reliably provide to his customer, making the issue of conflicting OTD metrics moot. Just as important, providing Bob with a CTPD prevents Bob – and the organization – from making a local decision that could have enterprise-wide impact. Along with CTPD verification, many SyncManufacturing software customers put a process in place where they talk through the options available when a customer request date cannot be met. This way, the organization can have a systematic discussion of what can be done, rather than making a decision in isolation that could have wide-spread ramifications.

#3 Synchronizing Resources to Demand – Finally, many of our customers have dramatically increased their on-time delivery rate through the synchronization of resources to demand. At Rex Materials Group, on-time shipments went from 50% to 98% in one facility. I should also mention that Synchrono helped RMG lower lead times as well. Many orders that used to take three to four weeks can now be delivered in less than five days. Some products even have a 24-hour turnaround. Orders can be shipped the next day with no extra effort.

If your manufacturing metrics need an overhaul, here are a few additional resources you might appreciate:

White paper: Metrics That Drive Action

Video: Visualizing Metrics in the Factory of the Future

May 7, 2018
Smart Capital Investing in a Recovering Economy

Earlier this year, the MAPI Foundation increased their projection for manufacturing sector growth for 2018 – 2021 from 1.5% to 2.8%. We haven’t seen overall growth like that in a long time, and it should spell a welcome relief for many manufacturers.

Capital Spending: A Leading or Lagging Indicator of Profitability?

One of the metrics that MAPI points to for their increased optimism is the pace of capital equipment spending. According to the statement on their website:

“After growing by a sluggish 3.5% during 2015 and then contracting by 3.4% during 2016, equipment investment growth accelerated to 4.8% during 2017. Capital spending growth for the third and fourth quarters of 2017 averaged a strong 11.1%.”

MAPI also calls capital equipment spending a key driver of manufacturing profitability.

While it might signal profitable times ahead, calling capital investments a driver of future profitability may be simplifying things a bit too much. Sometimes, capital equipment spending is simply a lagging indicator of an increase in business. Orders go up, so manufacturers have greater cash flow and more money to spend. At other times, capital spending is indicative of the anticipation of an increase in future demand.

But either way, capital investment doesn’t do much to drive manufacturing profitability unless it is linked directly to either: 1/attracting new business (e.g., with lower lead times) or 2/filling existing orders more efficiently. Even in the best of economic times, capital investment can eat into profits if it isn’t synchronized to demand. Consider the following scenario…

Should You Buy That New Equipment?

There’s a new metal stamping machine on the market that can produce parts at twice the rate of the one you have now. It takes less time to set up a run, tolerances are tighter, and it works on a broader range of materials than your existing equipment. It even has built-in alerts that help predict when it will need maintenance, so you can better reduce downtime and schedule around it when it isn’t preventable. The new model is expensive, but business was good last year and is tracking even better this year. Should you buy it?

There are many reasons this equipment might be a good investment. For example, the tighter tolerances and broader range of materials might help you attract new business you wouldn’t get otherwise (Reason #1). However, if you’re basing your decision solely on being able to produce more faster through reduced setup times and a faster run rate (Reason #2), it may not be a good investment if the older equipment isn’t a constraint in your system. (Note that, in this scenario, we’re assuming the older equipment is reliable even if it is slow.)

According to the Theory of Constraints (TOC), a constraint is anything that limits a facility from reaching its performance objectives. There are several types of constraints, but in this case, we’re just looking at a resource constraint. If the new stamping machine replaces older equipment that is a constraint, that’s a mark in favor of making the investment. With the current constraint sped up, the facility will be able to produce more. (And, since we’re talking about a Demand-Driven Manufacturing scenario, that “more” will be based on customer demand.)

Investing in equipment that allows the manufacturer to fill an unmet customer need can be a good decision. However, money invested in equipment that simply speeds up a process that isn’t a constraint is often money wasted – and that definitely does NOT lead to future profitability.

Synchronizing Flow to the Constraint

Now that you’ve decided to invest (or not), you need to synchronize production flow to your constraints. SyncManufacturing has helped manufacturers increase flow – and capacity -without adding equipment and has even helped some put off an investment in factory expansion.

One of the ways we accomplish this is through our proprietary scheduling engine called CONLOAD (short for “consistent load”). The CONLOAD algorithm sets the optimal rate for releasing work into production to achieve a consistent level of work flow. Here’s how that happens:

CONLOAD™ allows the user to establish a level of work-in-process (WIP) inventory to achieve optimal flow through the production process. Those who are familiar with the Theory of Constraints (TOC) will recognize this as the amount of WIP necessary to avoid starving the constraint.

The standard unit of measure for setting the optimal WIP level is the number of hours that a job takes on the constraint(s). If this level is 20 hours for a constraint, your CONLOAD™ is 20 for that constraint and the system will ensure that only 20 hours of work is in process for that constraint at a given time. Note, this is not 20 hours’ worth of work at the constraint – it is 20 hours’ worth of work between the release of work and the constraint.

By gating the release of work into production in this way, you are only releasing the work necessary to optimize flow and velocity through production. All other work is gated into the system at the rate the system can handle, based on CONLOAD™.

SyncManufacturing software monitors all activity in real-time and makes dynamic adjustments based on the pace of the constraint. If it is running faster than expected, the software will speed up the release of work into production. Conversely, if the constraint is running slower, SyncManufacturing will scale down the CONLOAD rate, always maintaining the proper level of WIP.

3 Ways CONLOAD Accelerates Flow

Managing to the constraints increases flow and maximizes throughput in a variety of ways. Here are three examples:

Reduce WIP – You only have in the system what you need to maximize throughput.

Minimize delays – You stabilize the in-process queues, so when an order is released, it can flow through the process.

Reduce waste – You reduce the waste caused by undesirable behavior associated with too much work in the system, including unclear work priorities, choosing to work on easier setups, or handling materials more than necessary.

Sumiden Wire, Rex Materials Group, GIW Industries, Orbital ATK, and Pyrotek are all manufactures that implemented constraints management using SyncManufacturing to increase flow. Read their case studies to learn more and then watch the CONLOAD demo on YouTube.

We’ve also released a brand new on demand demonstration of SyncManufacturing software that shows how all the pieces fit together to synchronize resources (people, equipment, materials, method and data) to customer demand. As always, if you have questions or comments, leave them below or reach out to us directly.

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April 30, 2018

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