For businesses that are opening their first US-based plants or struggling to handle frequent schedule changes, understanding the complex relationship between inventory management, planning, and scheduling can come with a steep learning curve.
These three essential functions are naturally intertwined in manufacturers’ supply chains. To make an accurate schedule, operators must know when materials will be arriving and how much inventory they have available at any given time. At the same time, inventory managers need to reference planned production output to build the appropriate orders of raw material.
Achieving this balance can be a major pain point for many businesses. In our experience, the plants who do it best prioritize cooperation and integration across departments to keep operations running smoothly.
Step 1: Capacity Analysis
As you might expect, the first step to an efficient production process is planning. Planners are responsible for setting overall plant goals and determining how much output should be produced. To set the most precise yet ambitious goals, planners should consider a capacity analysis of the facility to better understand the maximum output the plant is capable of producing in a set time period. Determining the true production capacity can help planners better predict how much product will be manufactured in the coming weeks and months, allowing inventory and scheduling managers to make their own arrangements accordingly.
Step 2: Inventory Management
With specific production goals communicated across the business, it’s the inventory managers’ turn to put their own plans in action. Typically, a plant’s ideal inventory level is large enough to fulfill production requirements, but small enough that it doesn’t become costly to store long-term. To fulfill those production goals on time, it’s important for operators to have access to an accurate, up-to-date inventory record.
Unfortunately, that’s not usually as simple as it sounds. According to a GS1 survey, inventory counts are only correct about 63% of the time. That means about one-third of the time, plants are building their production schedule based on inaccurate information, which can lead to unmet goals. Using an inventory management tool can significantly improve inventory accuracy, allowing managers to track all their materials and even receive forecasts or delay alerts. With these helpful features, the inventory team can quickly alert planners and schedulers of delivery changes or availability issues. As a result, the other departments will have more time to adjust and avoid delays or wasted materials.
Step 3: Scheduling & Optimization
Once supplied with a detailed inventory report, your plant can begin scheduling production and putting plans into action. Schedulers often utilize the inventory management tool to ensure their schedule accounts for delivery times of materials that will be arriving just in time for production to start. With inventory availability confirmed, schedulers’ next task is to create an optimized production calendar that will achieve the planning team’s goals in the least amount of time possible. Once that round of production is complete, the planning team can collect data from the schedule to inform and improve their future plans.
However, for complex processes with many constraints, manually creating an optimized, feasible schedule can be nearly impossible (and not to mention time-consuming). Over the past 29 years, we’ve developed our advanced planning and scheduling software, VirtECS®, to help manufacturers find the most efficient production schedules and maximize their output. VirtECS® offers both capacity analysis and scheduling tools, allowing plants to better understand their own capabilities and create a schedule that utilizes an increased capacity. Additionally, VirtECS® can integrate with inventory management tools to provide manufacturers with a more integrated supply chain solution. To learn more about how VirtECS® can impact your supply chain operations, send us a message and one of our experts will reach out to you with more information.
