Congratulations, you just won another new contract. But do you know if you have the production capacity to deliver?
Imagine this: Your leading sales rep just knocks on your door announcing another significant piece of contract manufacturing business she has won. After the obligatory “Congratulations,” you sit back down at your desk and the horrifying thought comes to you: Can we handle this new production contract?
Unfortunately, this question is all too common for many managers facing changes to existing customer forecasts or opportunities to grow production volume. This is especially true for those struggling with capacity constraints or manual spreadsheets and pivot tables.
As we continue to experience a more dynamic supply chain, partners and customers are demanding these adjustments to be made in an instant. Deacom’s COO, Scott Deakins, recently spoke with Supply & Demand Chain Executive Magazine about what features managers should be looking for in a strong production capacity management system.
Below are five capabilities he noted to be most important:
- Customer forecasting – Customer forecast sheets should always be incorporated into a capacity system in order to properly calculate accurate expectations. Deakins notes, “The forecast sheet should include the customer’s part number, and the expected daily, weekly or monthly sales volume.”
- Planned and unplanned maintenance reporting – Find a system that takes into account planned and unplanned equipment downtime into reports. Building these details into the system will provide a clearer view into the existing status of production and if new lines need to be introduced.
- Product routings -Be sure to select a solution that will allow you to determine the time it takes to manufacture a production based on different batch sizes. Many types of software will take into consideration the product routings to make this calculation. “These routing calculations can get tricky, so when reviewing a new system, be sure to run through a few examples. Apply various routing sequences unique to the business to make sure the system can handle it,” advises Deakins.
- Production capacity reporting – Comprehensive production capacity reports should be based on customer forecasts, product routings, and expected run times for each production line. Pulling this data quickly will deliver managers a quick overview yet full understanding of the open capacity. Deakins suggests that managers select “an option that can provide a report that can be broken down by forecasting period—day, week or month—against the production lines. This report is the first stop after a sales representative announces a new business win.”
- Labor constraint requirements – Though not common for all manufacturers, some require specially trained workers to operate certain machines. These constraints can significantly impact the production process and should always be managed in the system.
In sum, don’t be that manager who frantically grabs the walkie-talkie to ask the production team if they can squeeze in one more order on a daily basis. If you understand how to quickly accomplish the above tasks, you will be able to react quickly to changes in customer demands and determine when it’s time to invest in a new production line to grow the business.
To see the original article in Supply & Demand Chain Executive, click here.
