Usually, companies need to plan many internal processes. It is common practice to plan ahead regarding the allocation of your machines in the factory or the number of people you require on a certain day. Obviously, this is a very diverse endeavor, as you’re handling a variety of work to be scheduled. On the day of execution, the actual amount of work will deviate from the planned volume. This can pose a real problem: you will either have to disappoint customers (if there are more orders than you expected) or deal with unmotivated employees, unused machines, and higher costs (if there are less orders than you anticipated). The question is: How can you avoid such situations and make the most of your staff and resources, enhancing productivity and customer satisfaction?
Forecasting: always a challenge
When you plan ahead, you can never know everything. A forecast is nothing more than a well-considered estimate of future events. A common pitfall is that companies increasingly go into detail when forecasting, which often results in a time-consuming process, while it doesn’t solve the issue of not knowing the future exactly beforehand. By being more explicit, they make it more complex. What you need to do is make it less detailed and create flexibility in the moment to process the actual work volume efficiently.
Improve quality, increase effectiveness
Now, don’t get me wrong. It is always relevant to enhance the quality of your forecast. Experience shows that it is possible to realize a 10-20% improvement on average, so it is definitely useful to have a look at it. However, keep in mind that it will never be perfect, and deviations will always occur.
Ensure flexibility at the time of execution
Change your organization and working methods in such a way that you create a planning at a higher abstraction level, allowing for flexibility. This way, you can deviate from your plan and cope with reality at the time of execution. Basically, you can do this in three different ways:
- In resources: In your factory, every machine is operated by a group of people. Some take on complex tasks, others carry out simpler activities. Now, you can assemble a small group of experts who are capable of doing all the work – from filling machines with raw materials to adapting machines to the various products they need to produce. On quiet days, you can only work with these ‘core employees,’ but when it gets busy, you can hire less qualified, temporary workers to take on the tasks that are easy to learn and perform.
- In allocation: Every factory has a range of production lines. If a product can only be manufactured on one line, you are in trouble when there’s a rise in demand. Therefore, it is wise to invest in the multi-employability of production lines. Alternatively, you can ensure that your products can be produced on multiple lines. This allows you to switch product-machine allocation per day or per week and respond to deviations.
- In output: Most companies try to minimize stocks to limit the risk of superfluous products. The disadvantage is that when the demand for a certain product increases, they aren’t able to meet it. The solution is quite simple: pre-produce the products that are regularly in high demand when you’re unexpectedly dealing with quieter times.
What are the benefits?
In conclusion, it is important to balance the effort between the robustness of a tactical plan and the precision of forecasts. Creating sufficient flexibility on the day of execution is key. The benefits of this approach are evident: more loyal customers (as you are a more reliable supplier), highly motivated employees (since they always have enough work to do), and a better allocation of machinery (you’re getting the most out of your machines). Reasons enough to tackle this issue!