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In a recent article we looked at the Top 10 Tips for efficient New Product Development in S&OP. This latest article looks at what you need in place to get the most from your manufacturing operation in support of S&OP.
When I was managing an FMCG factory in Saudi Arabia one of the most frustrating aspects was a lack of understanding by Sales & Marketing colleagues. People who have never worked in manufacturing tend to have little understanding of what can and cannot be done in terms of flexibility. However, factory people are their own worst enemies by always striving to meet urgent S&OP requirements by overcoming significant time and equipment hurdles.
If you are under pressure or you simply want to be transparent about factory capability then a set of Manufacturing Golden Rules will come in handy. Written simply and based on hard reality this will diffuse and divert a large number of requests and allow colleagues to focus on what is possible at short notice.
The aim of a set of Golden Rules is to unambiguously state in-house manufacturing capabilities and limitations. This information should be widely circulated around the S&OP teams so that everyone has the same understanding. The rules provide for one consistent voice from the factory and is designed to avoid unnecessary conversations, misconceptions and misunderstanding in S&OP meetings.
Put some rules in place so everybody knows what can be done while ensuring optimum factory operation and supply surety. (These tips are based on a fictitious FMCG factory but the principle can be applied to any sector.)
1. Bottle-neck. SKU X and SKU Y are made in the same mixing vessels and filling lines and cannot be produced at the same time.
2. Formula Incompatibility. The downtime between chemically different products is 1 hour.
3. Formula Compatibility. Downtime between variants of the same formulation base is 45 minutes.
4. MOQ. Minimum production length is one complete 8 hour shift.
5. Batch Sizes. Batch size is fixed and cannot be reduced. Filling line X is capable of filling the following SKUs with due adherence to the NPD/product change procedure: 100ml, 1500ml, 3000ml, 5000ml.
6. Sequencing. Liquid production will follow a light to dark product colour approach to minimise/avoid cleaning downtime between different products.
7. Communication. The factory will only accept planning communication and adjustment requests from the Supply Planner as an agreed output from S&OP.
8. Time Horizon. The plan for the following week must be solidly frozen 1 week in advance. Any deviation due to RM/PM availability, factory downtime or tactical market requirements will be discussed by Supply Planners, only.
9. NPD. New Product Development/Change trials require 20 working days’ notice.
10. Maintenance. Each month 0.5 working days will be allocated to plant maintenance and/or staff training.
This is simply an example set of rules or tips but you need to keep the list reasonably concise and avoid technical detail. The more unnecessary debate and misunderstanding you remove from processes around S&OP, the easier it will be to delight customers, consumers and even colleagues!
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