Is it possible to create efficient solutions in production planning and control without expensive software solutions? With a production-experienced interim manager CFO from HANSE Interim, definitely.
The initial situation
After successful restructuring by HANSE Consulting, a manufacturer of ingredients for foodstuffs needed to bridge the vacancy of the commercial manager. The management decided in favor of the experienced interim manager Horst S., who, in addition to his training as a businessman and controller, specializes in the food industry and production.
The task
HANSE Consulting had already created very valuable basic modules in the area of planning and in the creation of contribution margin calculations. Here, additions in the pre- and post-calculation and in the reporting were still necessary. The new tools were actively used for a sustainable optimization management.
The task then became more complex, especially in the need to develop a production planning and control system concept (in short, a PPS concept). Production in the company is characterized by a high product depth with strong diversification. Customer orders have to be integrated into the production process flexibly and sometimes at very short notice. In some cases, this is associated with very short lead times and a wide variety of lot sizes per batch.
Against this background, most consumption data was not recorded automatically. A device was not yet available at the time of project planning. The challenge was to install a production planning concept quickly.
The aim was to keep cleaning and setup times for production and for filling the batches as low as possible and to minimize unit costs in the long term.
The challenge in this context is that different colors and grain sizes of the materials have to be taken into account in the program planning for the compounds. The more ingredients and the more colorful or varied the batches are, the earlier the plant has to undergo a general cleaning with longer makeready times for a lighter mixture.
The planning was made particularly complex by the fact that purity and color were not the only criteria influencing the sequence, which affect make-ready times.
For in addition, the nuances of the aggregate state had to be considered.
Organic products were not allowed to follow non-organic products, and substances containing allergens were not allowed to immediately follow allergen-free products. Other criteria included ethnic requirements, such as halal manufacturing or manufacturing products that could cause animal contamination of downstream products.
In addition, different physical characteristics can negatively affect downstream products, which can lead to incorrect batches.
Against this background, automated program selection proved to be extremely complex, which is why production planning was previously carried out in a tedious manner by the production management. This led to a less than standardized approach, as the solution to the tasks was sometimes approached differently depending on the shift management on duty, which in detail could lead to different results in terms of quality and output.
The solution
This situation meant that only a few very experienced employees could be entrusted with the task of program planning. This task was solved by assigning an ordinal number to each article number.
The classification system was divided into topics such as aggregate state, bioproduction, containers, ethics, color, allergens, odor, and so on. The bullet points were assigned a digit (tens, hundreds, or thousands) depending on their priority. Within these digits, gradations and nuances were assigned, which in the end resulted in a sorting within an ordinal number.
This ordinal number was directly assigned to an article via the merchandise management system. During export or after output of the orders to be processed, the ideal program sequence could be output via a sort of run. The production orders could be assigned to an ideal production line via a code from the master cost center and considering the required batch size.
Based on data from the limit plan calculation, it was also possible to define target production times for charging, mixing, etc. Thus a comparison between target and actual time in production was possible.
Some test runs and corrections had to be made during project planning when working out the gradings. Over the year, however, the ratio became more and more accurate.
As the company did not yet have an automated process recording system, a board was designed as an alternative via office systems, with the help of which the production from the status of an order, e.g. provision, mixing, filling, etc., could be stored via board and color system.
In this way, the production status of an order per batch could be tracked at any time.
The result
Although the customer did not have any automated PPS systems, the company is now able to perform end-to-end production planning. If additional acquisition systems are invested in for the future, modules can be added at any time.
In addition, there is the flexibility to intervene manually in the processes at any time, which allows a high degree of customer flexibility. Nevertheless, a target/actual system is able to verify additional costs for planned or unplanned deviations in order to be able to incorporate deviations into future planning. These could be deliberate decisions to service time-critical orders in a customer-oriented manner. They can also be unintentional disruptions in the process, whose error rates are documented, evaluated and avoided for the future.
In this way, cost-intensive recurring system malfunctions are avoided in quality management.
Conclusion
Expensive software solutions are not always necessary in medium-sized companies when it comes to creating efficient solutions in production planning and control. In the knowledge of the practice and in the interaction with the departments, often amazingly individual and effective tools can be created with existing resources.
With best regards
Your HANSE Interim Management
