Production Management

Planning production to reconcile flexibility and cost reduction

Companies must apply efficient industrial operations planning processes that incorporate constraints and guarantee the availability of equipment, resources, materials, and components if they are to optimize the use of their production capacities, reduce their manufacturing costs, and improve product availability.

Context and challenges

In addition to questions of product segmentation, modeling of production constraints, and associated information systems, the building or overhauling of production planning processes must address the question of roles and responsibilities between the Supply Chain and production functions in terms of capacity management and production flows across different timescales.

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If the Manufacturing function is responsible for planning, then how can the quality of the Supply Chain KPIs - inventory, product availability, and logistics costs - be guaranteed? And if, by contrast, the Supply Chain proposes the weekly production schedule, then how can production be correctly optimized?

In more general terms, this raises the question of the nature of the mutual agreement between manufacturing and the Supply Chain.

The answer to this question depends on the company’s Supply Chain model, the corporate culture, and the business context in which the company operates (cost, cash, and service priorities). Our experience across a range of sectors has revealed to us the existence of Supply Chain models structured primarily around the complexity of the supply (industrial complexity) and demand involved, as well as shown us that the most efficient companies were those which had successfully defined a governance system consistent with these models.

This then raises other questions:

  • How can management methods be differentiated according to product segment (make to order vs make to stock, fast movers vs slow movers, products in decline vs new products, etc.) to best reconcile the Sales and Manufacturing functions’ competing priorities?
  • How can the “tension” between the Sales and Production functions be adapted to the different product types?
  • Which product grid can be used in the master production schedule (MPS) to adapt workload/capacity? Over what unit of time?
  • How can the MPS be used to take structural decisions (allocation of new products, opening and closing of production lines, etc.)?
  • How can the multi-site MPS be integrated with the immediate environment (site scheduling, operational relations with subcontractors, etc.)?

How can Argon Consulting help you?

  • Identifying challenges related to existing deficiencies and estimating the cost of overhauling the organizational structures and tools in place (business case)
  • Clarifying the target organizational structure in terms of skills, scaling, organization (central vs. local, planning vs scheduling), and roles and responsibilities in line with the company’s Supply Chain model
  • Overhauling processes in line with best practices and the specific features of the company (products, constraints, production network, etc.), while clarifying the switch from a medium-term/aggregated grid (planning) to short-term/SKU grid (scheduling)
  • Modeling bottlenecks and selecting constrained planning methods
  • Reviewing key parameters (operational procedures and cycles, machine capacity and efficiency, minimum supplier orders, etc.)
  • Building and evaluating alternative scenarios in the event of problems relating to capacity or availability of materials (make or buy, balance between sites, additional resources, trade-off and management of priorities, etc.)
  • Implementing alerts, KPIs, and scorecards
  • Selecting and implementing operational planning tools - MPS, scheduling (drafting of the specifications drafting, management of calls for tender, deployment strategy, implementation assistance, project management and risk management, etc.)
  • Deploying an improvement plan (training, fine-tuning of models, etc.) and managing change (in culture, behavior, skills, communication, etc.)

Case Studies

Deployment of Supply Chain processes, teams and information system
From the supply chain vision to the deployment of processes and the implementation of a supply chain planning information system
Adapt the purchasing and supply chain organization to support strong international growth
Optimization of a leading petrochemical company’s MRO supply chain
Development of a program to reduce stocks and cut logistics costs
Boost performance by cutting stocks and improving the service rate by overhauling the processes and deploying supply chain planning tools
Development of a stock reduction program
How we helped a leading European consumer goods supplier to build and deploy a flow management and supply chain planning target vision
Transformation projects in the aeronautics sector: critical for supporting sector growth
Drivers for reducing inventory and increasing flexibility in the pharmaceutical industry