Business data today can be collected with amazing accuracy from an astonishing number of things. The longer the data is collected, the more it is also accumulated. Thus, it becomes better and enables the monitoring of long-term trends. Progress in data collection is also a sign of development from a production planning perspective, but the full practical benefits can only be reaped through a production planning system.
An efficient production planning and supporting system enable the collection, storage and analysis of production-related data, thus helping the company to improve its performance with the key metrics of choice. In many cases, a specialized system solution enables the first significant data-based improvements to be made in the company.
The key metrics for manufacturing companies vary somewhat by industry and company, but they also have a lot in common. For example, production efficiency, security of supply and the management of capital committed are important indicators for all companies and are closely monitored. All three metrics can be significantly affected by streamlining production planning.
Production can be made more efficient, and the utilization rate increased by a variety of production planning improvements. Better planning enables on-time manufacturing, optimizes changeover times, reduces unproductive wait times, and speeds up lead times. One of the concrete improvements enabled by the system is, for example, the effective influence on set-up and change-over times by means of production schedule.
The working hours available in production are always limited, so their use should be carefully planned. First of all, it must be ensured that everything necessary is done on time. Second, it is important to be able to handle the remaining orders in an optimized way, without risking profitability or customer satisfaction.
Practice has shown that indicators measuring production efficiency – for example, the number of units produced per working hour or the ratio between the actual and planned working hours – are developing in a trend-positive direction with the deployment of a production planning system. Similarly, experience shows that without a production planning system, continuous improvement in the long run is not practically possible.
The first 10% improvement in production efficiency often comes from the current situation being monitored. However, a corresponding 10% improvement should be able to be repeated every year.
Juho Arkkola, Sales Manager
For example, we helped our customer Sandvik increase capacity and resource efficiency.
Regardless of the industry and company, all companies in the manufacturing industry are interested in the security of supply. It is measured in one way or another in all organizations, and many divide it further into internal and external security of supply: The former measures success in the company’s internal schedule goals, the latter the delivery schedule visible to the customer; whether the customer received the agreed delivery in full and on time. A so-called shipment buffer is often left between internal and external delivery time targets.
Improving security of supply consists of several elements, each of which can be affected by effective design work. For example, in the assembly industry, an essential intermediate goal is to measure material shortages in collection. For many, a familiar measurable thing can be, for example, the number of reset collection lines.
As with streamlining production, the timeliness of the various stages of production plays a key role in improving security of supply. When a production planner has a reliable view of the schedules, plans can be brought to an increasingly precise level and scheduling can be improved throughout the chain – from procurement to customer delivery.
For example, our customer in heavy assembly and a massive number of items, Normet, has improved its material availability and predictability by improving the efficiency of production planning.
In terms of appropriate inventory levels, the benefit of an efficient production planning system lies in the fact that the effects of different decisions on inventories are already seen at the planning stage. Controlling work in progress and emergency inventories are, to the greatest extent possible, long-term systematic work, the importance of which increases as the number of items grow.
Another important consideration is that a continuous, real-time view of the overall production also enhances the company’s internal confidence in production capabilities. When you can trust the production, it is no longer necessary to maintain oversized inventories just in case.
Our customers often report that a comprehensive production planning system has enabled informed, controlled decisions about inventory levels. Previously, balances were mainly based on randomness and a gut feeling, while today they are used to make informed, data-based decisions even at the management level. In this way, the level of capital tied up in the inventory is exactly what it is wanted to be – without compromising security of supply.
For example, our customer Tasowheel reduced the amount of work in progress and reduced the amount of capital tied up in production.
One of the most important indicators for a company’s long-term profitability and business continuity is customer satisfaction. Success in production efficiency, inventory management and security of supply helps ensure that the products and services offered by the company are perceived as reliable, cost-effective and flexible. This makes customers want to buy them again.
Our guide FAQ: Production planning system adoption is directed to organizations operating in the production industry field of business. In this guide we will provide concise answers to FAQs as for production planning system procurement and its adoption.
iPES by Pinja - Production planning and supply chain management system
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