Supply Chain Blog

FMCG/Brewing/Pharma Factories : Manufacturing Golden Rules

Posted by Dave Jordan on Thu, Apr 25, 2013

When I was managing an FMCG factory in Saudi Arabia one of the most frustrating challenges was the lack of factory capability understanding of Sales & Marketing colleagues and some detached Board members. People who have never worked in factories tend to have little understanding of what can and cannot be done in terms of flexibility.  Commonly however, factory guys are their own worst enemies by always striving to meet S&M requirements by overcoming significant time and equipment hurdles.

If you are experiencing unfair pressure or you simply want to be very transparent about your factory capability then a set of Manufacturing Golden Rules will come in handy. Written simply and based on hard manufacturing reality this will diffuse and divert a large number of requests and allow colleagues to focus on what is possible in the short term.

FMCG ManufacturingThe aim of a Manufacturing Golden Rules booklet is to unambiguously state in-house manufacturing capabilities and limitations. This information should be widely circulated around the business to ensure the Marketing & Sales Organisation (MSO) and the S&OP process teams all have the same information and understanding. This provides one consistent voice from the factory and is designed to avoid misconceptions and misunderstanding in MSO staff. This operates in parallel with the Service Level Agreements (SLA) which should also be in place between MSO and SourcIng Units (SU).

This is a dedicated factory and we are committed to providing the lowest cost and highest flexibility in service. If we only had one SKU this factory would be able to meet all your needs 100% of the time with very little notice. We have more than 1 SKU and therefore we need to put these rules in place so everybody knows what we can do while ensuring optimum factory operation and supply surety.

Rules

  1. We make Bloggo and Brand X in the same mixers and filling lines so they cannot be produced at the same time.
  2. Liquid production will follow a light to dark colour approach to minimise or even avoid cleaning downtime between different products.
  3. The downtime between chemically different products is 1 hour.
  4. The downtime between variants of the same chemical base is 45 minutes.
  5. The minimum production length is one complete 8 hour shift
  6. Batch size is fixed and cannot be reduced.
  7. The factory will only accept planning communication and adjustment requests from the MSO Supply Planner as an output from the MSO S&OP.
  8. The plan for the following week must be frozen 1 week in advance. Any requirement for deviation due to RM/PM availability or factory downtime will be discussed between the SU and MSO planners only.
  9. New Product Development/Change (NPD) trials require 30 working days notice.
  10. NPD and product change first production runs assume that first shift output is unfit for sale. This includes new suppliers of the same material and change in supplier and/or supplier production site.
  11. One working day each month will be allocated to plant maintenance and/or staff training.
  12. The ABC filling line produces the following quantities of SKU pieces  per shift:                                                                                                           300ml       5000 piece
    1000ml     4000 pieces
    2000ml     3000 pieces 
  13. The XYZ filling line is also capable of filling the following SKUs with due adherence to the NPD/product change procedure: 100ml, 1500ml, 3000ml, 5000ml 
This is simply an example but you need to keep the list reasonably concise or people will not read through to the end. The more unnecessary debate and misunderstanding you remove from your processes the easier it will be to delight customers and consumers as often as possible.

Image courtesy of Stuart Miles at Freedigitalphotos.net

 

 

Tagss: SKU, Brewing & Beverages, FMCG, Dave Jordan, Pharma, Manufacturing Footprint, S&OP