Updated: Apr 9
I like these three because it really simplifies things. We also have tools that exist to manage these three in all of our current planning systems. If we aren’t using them, our way of planning and executing is messed up!
Working on the right thing at the right time is accomplished by keeping customer due dates current, using your dispatch lists, and reporting job completions on a timely and accurate basis. Staying on track means you’re getting the appropriate amount of work done each day. The fundamental relationship is work remaining vs. time remaining. If I have five days of work left to do then I better have 5 days or more left to get it done in. This assumes I didn’t over book myself in the first place. Again, the tool we have is the critical ratio. We need to use it to not only to help us work on the right thing at the right time, it helps us identify those orders that are potentially behind.
As much as we hate variance reports, we do need them. They tell us if we’ve used more labor or material than planned which can impact our profitability. Like discussed earlier, we have to make money from manufacturing and we have to make enough money from manufacturing to allow us to re-invest in ourselves if we want to have a chance at survival and growth.
If we can’t do the three things above, we’re in trouble.
Remember: Dispatch lists, critical ratios, and variance reports. Use them!
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Chuck Nemer is a trainer/consultant with 40 years of experience in Supply Chain Management, Lean, Leadership, and APICS. He currently works with approximately 50 universities and 3000 students annually in supporting the use and play of the simulations in the classroom. Within those 40 years, he has taught, and continues to teach, professional certification classes for APICS, professional development seminars and programs on his own, and on behalf of colleges in their outreach programs to local and regional manufacturing firms.
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