Back to basics – Material Planning

When it comes to ordering the materials in an industrial environment – I had always looked at it from a very pragmatic and matter-of-fact standpoint. One must think of it in terms of taking care of its own household – ensure that you have enough supplies to get you through the week and through a busy day, keep the kids happy and be prepared in case the butcher shuts off his business; but don’t overdo it – you don’t want to throw away all the content of your fridge.

Still, easier said than done. Let us take a look at the most common material planner types:

The Squirrel. This guy is always afraid winter will come unexpectedly – so he stuffs his burrow with everything he finds out there in the woods. Need a safety stock for two weeks? The squirrel will have it for six months! Do you need say 1000 parts/week from any given material? The squirrel will bring in 1500/week – EVERY week. You know, just in case winter comes. R&D will need a new component (strictly 1 piece) in two weeks’ time, to test a new product? This guy has it since last year on stock – when he first heard about the project. And he usually has 10 pieces available, all dusty and rusty and pretty much useless – but with a good rinse-off, they should be good as new! (Not his fault there was a drawing change in the meanwhile).The warehouse is always too small for him, forklift drivers always sigh when they have to physically count the parts he manages and a typical squirrel has at least one heart attack per every delayed truck – although production still hasn’t consumed the materials he ordered last quarter.

The Bee. Beware of this lady! She works hard to provide materials to her hive – and she will resort to absolutely nothing to prevent you to spill her precious honey! You are only allowed to consume what the BOM says, she simply cannot and will not tolerate scrap, for her waste does not exist, repairs should never happen and if production used more than needed – it will only be after she used her last sting that she will let you touch her safety stocks!

The Bear. This guy has usually no idea where and how he can balance supply – as he is an absolute omnivorous. He never seems to get it right – he is either puffy and has everything he needs (and more) – or he wakes up after a long sleep, having absolutely nothing on stock – and running desperate to find something (anything) he can eat. For him everything is useful, there is no order too big to bring it  home, no fish too small to be neglected. Still, do not undermine him – when you would think he’s at a loss – he will release a battle cry that would make even the bravest supplier give in and send out materials.

The Lion. This guy is the absolute king. The suppliers need to surrender, bow down, fear and offer absolute and irrevocable submission. The lion accepts no excuses, he is never wrong (and even if he does make a mistake, it is clearly not his fault); his directions should always be followed, his words are worth carving in stone – he has absolute rights over his supplier/subjects – and if anyone dares undermine his power he will blow them to pieces with his mighty call!

And last (but not least) The butterfly. This innocent little thing is the most cheerful and easy going creature out there. Bright, smiling, always happy, innocent and colourful – the butterfly is always dancing around, flying from one flower to another, finding here and there new supplies, making friends with everyone, trying not to upset anyone… oh, what a beautiful sight, what a quaint little creature, what a quiet presence. Most of the times the butterfly doesn’t know where the materials come or when it has to arrive, has no idea about transit times, locations and volume, knows not what is actually in charge of and has little idea of how to conduct business… still seems to know little detail about the personal life of the suppliers – and is befriended on F/b by all of them!

Stereotype aside – there are a number of clear responsibilities that fall under the competence of the material planners – and the way they conduct their accounts have a significant impact both on the overall inventory performance and on the productivity as well – as missing component or over inventory are both unsound for operations.

Although one might believe the material planner job is fairly easy (and I have heard it a million times – what’s so difficult? You just send orders to suppliers and they need to send out material), the fact is that the mission is delicate and must be carried in a profoundly responsible and professional manner to be successful. Here are the most important points that the material planner needs to manage:

Analyse production demand. The focal point of the material planner – and sadly one of the most neglected – is the analysis of the production demand in terms of request versus stock. Purely mathematic you would look at the number of materials and the specific qty/item that is requested to carry out a production plan. Whatever is missing – you must bring in. Easy enough, isn’t it? Still – there are a series of significant steps a planner needs to make to be sure of the efficiency of the analysis:

  • First and foremost – the analysis is never ever performed for the current production. If the day before (or even worse – the same day) a certain item is planned to be manufactured one would check the material requirement, then the planning is already doomed to fail. Trial in error does not exist at this stage – and though issues will always arise (such as inventory discrepancies or defect material or a Mighty Power that has chewed away all the warehouse) a good material planner will always plan his materials at least a few days ahead (or a week or a month – depending obviously on lead time).
  • Determine the ghosts in your inventory – the materials that always seem to be there and are never actually but an ectoplasmic presence. May it be a small and insecure screw or a very big and expensive PCB – there is always (at least) one nasty item, that has the bad habit of taking a day out and completely missing. A good material planner knows this happens – and will call the Warehouse asking to count that ghost.
  • Make sure you communicate with the production planner. Maybe he has some secret plans to pop out just to make your life miserable, or simply he still needs some fine adjustments to do, or some client needs something on the very last minute, or… In theory there should be made a clear difference between the day production planners launch their work and the day material planners launch orders, but often that does not happen. So if you really want to be sure you ordered all the materials – do yourself a favour, ask a simple question.

Purchase order issue. Or firm request. Or whatever your organisation calls it – this is the point where your job is becoming mathematical. You had analysed your demand – and you are sure of what you need to order and you send it out to your suppliers. As funny as it may seem, I had seen so many errors at this stage – that I cannot get tired of mentioning – do not lose your credibility in front of your suppliers by making stupid mistakes. What kind of mistakes? Well of all kind – wrong requested date, wrong quantity, wrong e-mail address of the recipient, wrong currency, wrong material requested… you see all of this is just… wrong. Do yourself a favour, do the organisation a favour and check the order before sending it out. If it’s a .pdf file, or an e-mail, or an EDI transmitted message – it is important that you sent out the correct data.

Forecast is essential. Just as important it is for your organisation – it is important for your supplier. They need to plan in advance, they need visibility, they have a production to run, a supply chain to manage – and it all comes from you – their client. So be very meticulous when you are preparing and sending out forecast – because wrong forecast (or big fluctuations) have just as much influence on your suppliers as they have on your organisation. If there are noticeable deviations from the usual numbers – spend some time and investigate. Your clients might have made a mistake, or it’s your MRP that simply decided to be smart. In either case – do not just throw out numbers. Take your time, and make sure you provide the accurate set of information. It will make the difference between a headache and a smooth process.

Smooth Transport* is key. In material planning – you can never be too accurate in terms of transportation. Save yourself the problems – and always get the right information from your suppliers – size, volume, weight, opening times, loading specific info (from the back, lateral, crane etc.) – save everything and whenever you have a new transport order you already have the details. Book trucks timely, make sure you have contacts of the dispatcher, make sure you allow enough transit time (avoid tight transit times – special transport are one thing, but never assume you can use two drivers on a lorry and it will have a high impact).

Supplier Management – I left it as to the end, but it is actually essential. Question is: what on earth does managing suppliers really mean? In many cases it can convey complex definitions, but sometimes it just implies listening to a complaint or grief. It can mean that you have to hear a list of nonsense yawning. It can mean you need to comfort and calm your suppliers. But it mainly means the following:

·         Act as a representative between your company and the supplier. Either way you want to put it – Purchasing has really little to do on day-to-day basis with the suppliers. It is actually the material planner in charge. You are the actual spokesman of the company – and every time your supplier will think of the company will think of you and say ‘Oh, bee-zee wee-zee company? I know – it’s where Best Material Planner works! Great guy! Nice company!’

·         Provider of data. Yes – that it is. Your supplier is the one that provides the material, but you are definitely the one who provides the data. There is an ever circular and dependent function. You give the right order – you get the right material. Simple as that

·         Be their production manager. Well, not literally, but almost. You are in charge with the supplier performance, you want to get the right quantity at the right time – well then better get involved. I am not telling you that you have to be involved in every little step of the supplier production, but the more you know about their processes, the better.

·         Stick to the carrot and stick rule, but remember – you will get a lot more using the carrot. Carrots are nice, carrots are healthy, carrots are desirable. You want to avoid the stick – but do use it when it’s necessary. Calling an issue anything less than an issue will not help anyone.

Is there anything left out? Well of course it is – many other things. But these are the most important, would you not agree?

*I will obviously dedicate a whole article to transport managemnt.

37 wishes for my birthday

Since it’s my B-day, I can wish for whatever I want. It’s a long list, matching a wise age.

1. I wish I knew how to make my own pizza. With everything. And a cherry on top.

2. I wish I had not wasted money on trivial things. Like pizza.

3. I wish I were slimmer, but without giving up unhealthy stuff. (Pizza for example).

4. I wish I took parachuting classes. Mmm, no, not really, but it’s on many lists. I’ll stick to pizza.

5. I wish I were kinder when I am hungry. But when I am hungry all I can think is… pizza?!?

6. I wish I could find a country that has never been found yet. I would settle there, and open a pizza place.

7. I wish I read more. Even new pizza recepies, that would do!

8. I wish I were more politically aware. And vote for the right guy. (One who offers free pizza).

9. I wish tobacco and alcohol were not sold to underaged kids in Romania. They could spend money on pizza instead.

10. I wish I were a better husband and father. And surprise my family every now and then – with a pizza!

11. I wish I would not dream of impossible dreams – like winnnig the Lotery. Isn’t having a pizza with family and friends a better dream?

12. I wish I were a better listener. An active one. (Just as I am good in restaurants – when I hear pizza is ready).

12+1. I wish I made more time for spiritual things. At least just the same time I use eating. (Not just pizza, but I do spend a lot of time eating).

14. I wish I shared more. No – not on Facebook, I mean real share. Like – has anyone ever seen me sharing my pizza?

15. I wish I were more patient. I get so restless when pizza is late – but I find it so easy to forgive myself when I am late for something.

16-37. I wish I were 27! If you know anyone who could turn back time – share this, and I will buy you a coffee! (Pizza is not good for you, it’ll make you fat)

Sweet liric of the industry

It has occured to me that music and movies can define moments of the life of a professional. Wether it’s a catchy tune or a line from a blockbuster – it sometimes fits so good in a certain background that you wonder if it hasn’t been actually crafted for that very moment. So let’s all just “live la vida loca” for a moment and see if I’m right.

Ever had an recurring issue? A mission impossible problem that you believe it’s solved but it comes back times and again to haunt you? The kind of die hard issue? Seems pointless to even try and solve it – right when you thought you’ve launched a hasta la vista baby, it will look at you with cold eyes and go I’ll be back!

And speaking of termination – whenever a colleague resigns, I don’t know about you but what I hear is something in the background going this is the end, you know… lately the plans we had went all wrong… yes, it’s been a fairy tale gone bad! But still – don’t look bak in anger!

Anyways, I guess that’s just how I am, loving logistics and everything. In fact, if someone would ask me how I feel about Logistics – I can only answer ain’t nothing else matters. But you may not understand – you’re still young in the field. It kind of does smell like teen spirit, doesn’t it?

However, work is not everything, you gotta go for that life/work balance. That animal instinct telling you that you are no zombie and somethimes you gotta give it away a little bit. But you want the truth? I know you are entitled to it so here goes: sometimes life is like a box of chocolate, and that balance is hard to achieve. So what to do? Blame it on the usual suspect – your boss!

Guess we’re back to the job! I expect though that by now you should’ve somehow realise what you’re not to do, and thoroughly help every me and every you to get through the day. And even if you don’t – then fool me, go on and fool me, (that means to at least pretend).

Ah yes, today I am playing devil’s advocate; because sometimes at work it feels like losing my religion, and if you hit me baby one more time I might just put you through that wall! Still, trust me, sometimes it’s ok to cry me a river – nothing stays so smooth, you somethimes get thunderstruck and everything becomes just numb.

It is easy to lose patiente, especially because white men can’t jump and thus you sometimes feel stuck; but look to the otherside – that guy is feeling worst, yelling I’m in the dark here; so take a moment and trust yourself – you are really not what the french call les incompetents – so sit back for a minute and comfortably enjoy the silence.

Aaand – this is it I guess. Obi-Wan is not our only hope – so are you. Take my advice, relax, don’t do it, if you wanna go through it – because the final countdown is not due yet. You still have many years ahead – and we can make it the best time of our lives, and even if it somethimes seems that they don’t really care about us (except of course when we’re being hired – then they’re all you’re the one I need) what actually matters to me is when you call my name because I don’t want to miss when I walk five hundred miles to get back home and lay on my bed of roses. The end!

Dealing with work stress and other stressful stories

Working in today’s active environment is the classic no1 emotional (and physical) stress cause. But so is having your tooth removed, a fight with your spouse, a game lost by your favourite team, a sick child or (worst of them all) a low battery. Are we really that distressed, that burned out, or is it just a buzz word that we somehow feel entitled to use? Is there any particular job that it’s more stressful than other – or are they just about the same? In this article I will not try to answer these questions, and many more.

We are living blessed times when it comes to our job. Not more than two generations before (less than 30 years ago) the concept of job security didn’t even exist, let alone benefits! Take my father (and many other parents of his age) – he had the honor to taste ~34 years of comunist Romania – and that meant working from Monday to Saturday every given week, no exceptions. Can we imagine today such a treatment? Can we picture working in a company without trainings, Christmas bonus and coffee machine? Evidently – the concept of stress is considerably different from what my father’s generation would define it.

So what is stress? What is it trigerred by? How does it work? Is is contagious, just like yawning? Did they find a cure for it, a vaccine of some sort? Can you somehow homeopath it out of your system? Is it a real thing, a palpable disorder – or do we just fancy stress because of too much well-being? Do we not accuse stress of far more wrongs than the poor thing is actually capable of?

I left my old job because it was too stressful. I heard it more than once during interviews. And when I dig a little bit deeper – I find that in many cases the person is quite an underperformer, that found it too hard to reach the KPI’s and believed that the company policy was just foolish! Have we gone so far? We measure stress in a yelling boss or a stubborn client, a cold meal or a much too sour salad, an unkind operator or a blarmed diet, animal cruelty vs human (resources), a power outage, a flat tyre, pedestrians on the bycicle lane, waiting time for an appointment, co-workers and neighbours, teachers and politicians, actors and anchors – EVERYTHING is stressful!

Historically, the term itself had a different meaning from what today stress has developed into. From emphasis or physical tension it now means worry or even anxiety. Psychology and many other psy fields have only introduced this meaning somewhere in the end of the 1940ies – and it is haunting us ever since. (Without trying to undermine the psychological, emotional and physical issues that dominant distress bring about) – I stand here and ask: have we not become such spiritual crippled that we complain as a second job? Do we not, as a homo workaholicus, find it only too easy to grumble about anyone and everything – and let ourselves bleed to death to the battlefield of hardship?

My thesis is that stress is uverused and void of meaning; it has become insubstantial and common, a phrase we often use just to cover insuccess I was too stressed so I failed the exam… Are we that fragile, that utterly debilitated that we cannot cope with the most undersized stress factor? Is lamentation inborn and are we that complacent in social media pointless protest? Do we expect work to be just a flower-scattered yellow brick road, and the moment our job becomes tough – we give into stress, lay on our side and hope the end will be fast and painless?

Let us enjoy more our day job, and remeber that stressful situation is when your child is ill, when you have a health issue, when your loved ones go through a hard time, when you don’t have what to feed your family… and the list can go on. That is stress. (Well, there is also waking up in the morning and running out of coffee).

The Catchphrase of Titans

In every job, in every situation, on any given day – you would hear one phrase and would be able to recognise the person’s job only by that special set of words. I call such persons titans – a professional that is identified merely by his/her catchphrase. Here are some examples!

  • Have you tried restarting your computer? Mighty IT
  • I am sorry, but that is definitely not my job! cause he aquire, he a buyer!
  • The truck is just thirty minutes away from you! No, he’s not in criminalistics – he just works in logistics.
  • Aaarhg, I really don’t know how to explain… I can show you on the drawing! What a premierehe’s an engeneer!
  • There is no problem to stick to this plan as long as I have all the materials! That is not liposuction, this guy is production!
  • Was this in the budget? This is an autonomist or is he an economist?
  • I don’t care what you want to do with it – I will quarantine it! That is not equality, he plays for quality!
  • I know it was not forecasted – but the client ordered it for yesterday! Careful to the details, he is a guy from sales.
  • I really don’t know who did that – it must have been the guys from the other shift, not us! Ask not whereabouts – this right here is warehouse!
  • Honey, I know you wanted 3 years SAP experience and mastering of 6 foreign languages – but these are the candidates we have so you better choose! It’s not the police force – these are human resource.
  • I can swear it was loaded on the truck – it must have reached the client, tell them to search again! No, you are not tripping – simply put, it’s shipping.
  • Do you even read my e-mails when I am introducing a new product? What a harmony – he must be R&D!
  • I know you need the part for production, but I have a screaming client with a broken machinery! It’s not a different affair – this guy is doing spare.
  • Well so what if it’s model year 2025 – I want it on next month event! Things are worsening – as he is from marketing!
  • If you cannot do it, I will sack you all – and find someone who can! Sounds like abandonment – but sometimes it’s top management.

And last – but not least; literally noone: Oh I am absolutely happy with my job and pay, wouldn’t change it for the world! !

If any of these sound familiar – it’s because you belong to the big industrial family! Which is your favourite?

Back to Basics: Industrial Logistics

Here we are again. In the introductory article of this series I started the discussion about the very focal part of Logistics; today we will take a step forward and talk about one the main divisions of a production plant Logistics department – Planning.

(Note: this guide is based solely on the assumption of running projects. I will discuss in another article the specific characteristics of new project implementation).

Planning – it is one of the main elements. Again – I am not going to provide a new definition, but you can look at production planning as the core of the whole system, driving a plant operations from material supply to manufacturing and all the way to the delivery of the product. There are several constituents of planning – of which the main are:

i) Analysis and integration of customer demand. Esentially, though many consider this a Sales job, we are not talking about integrating sales orders – but rather to look at the various requests and forecasts from customers and perform a capacity check.

The capacity check (both short and long term) is essential to ensure that production will run smoothly and orders will be fulfilled timely. Neglecting to filter your customers requests through your actual production capacity will turn your planning into simple figures that only show how many articles need to be produced. However – if this first step is carried out effectively – then your planning strategy can be adapted to the market condition and you have time to react in case of capacity shortage. Whether you will define a strategy to use operators from other teams and start a training programme or you will engage with HR into hiring new heads – whatever the decision – it all begins with the simple, yet utterly important capacity analysis.

ii) Planning and controlling the production lines/isles. Obviously – a big part of a planner job is to schedule the production. Once the first part (capacity check) has been carried out, we can start organising the production cycle on daily and weekly basis.

The production plan itself seems to be a simple enough job, easy to draw in an excell table (the father of all that is holy in the Office pack) – but in reality the planner needs to keep in mind 2 crucial details and inputs to come with a correct and feasible plan.

  • Material availability. Though it may seem that the material supply falls under a different responsability – it is however a planner first concern, in order to secure the aimed output and fulfill the orders. Many organisation are established in ‘project’ pattern – where the planner is also responsible of the supply of main components for its designated product. It works obviously for products with a BOM of ~80-100 parts. However – fact is that a good planner will always keep in mind that his sucess is based on the accessibility of the raw material.

  • Production specific elements (takt time, changeover, minimum lot, subassy, team training level, etc.). Having the theoretical capacity in place isn’t enough. A good planner knows its lines – knows what is the minimum lot needed to provide a correct pace to production and secure a smooth (and SMEDy) changeover. A good planner will know which is the best team and wich team is still on a training curve, and correctly balance the quantities requested. A good planner is in touch with production – and knows when a key player is on sick leave (or vacation); knows when machine maintenance is planned and can play with different set of data to ensure that client orders are fulfilled.

iii) Communication within and outside the organisation. It may very well sound like a trivial and common sense thing to do – but the reality is that it’s ever so often neglected!

A planner job is not done unless effectively communicated. From information to production – to keeping customers updated; information towards material planning and keeping up to date with the commercial side; playing alongside quality and having an eye on engeneering – the planner is a pivotal guy who constantly needs to hand on, receive and study different facts and data.

Isn’t Production Planning fun indeed? It sure is. Remember – the planner is the person sitting behind a succesfull production result; it is the person handling customer request and turning figures into pieces.

Back to basic – who does what in Logistics

A good, solid foundation is the base start for every success. In this article I want to define a few key concepts that are specific to the big Logistics family. You might find some completely new things or just a structured reminder of what you already know – either way it’s a win-win. Let us proceed!

So, who came first, the chicken or the parcel? Egg-zactly!

In many organisations there is the big supremacy fight – one department against another, arguing over which is more important to the company. Fact is that (even if a little competition is healthy and beneficial for the advancement of the business) it is one of the top dogs tasks to make sure that every department is treated equally and no section gets to be privileged on the expense of another.

Let us be clear on one thing: if the organisation does not roll as a whole, it is doomed to fail. You can have the best sales guys in the market working for you, the kind of type who would sell ice cubes to eschimos and sand to the beduins – it means nothing if they are not backed by an effective operational team. You can have the most efficient production in the game – it’s 0 if it’s not helped by a structured logistics team. You can have top service – if your quality is bad, it will not do a thing. You can have the best price in the market – without an R’nD group at work in a few semesters your product will be copied at a better price! You can march along the best economists, people who know the law and regulations inside out, if your purchasing team is not leveraging the material cost – your margins will not support you in maintaining the business.

But with all that in mind – my heart is all Logistics. I have lived Logistics for so many years now, that I come to look at it as my baby. So if you will ask me which is the most important department in a company, my answer is: all deparments are equally important, but Logistics is more equal than the others!

So, what is Logistics?

I remember once trying to explain my grandma what it is that I do. I gave my best to draw a nice picture of my job – but I still could not shake her out of the feeling that, in fact, I wasn’t really doing anything since nothing palpable would come out of my hands at the end of a day. (But she loves me anyway!)

Therefore, though there are many definitions – the one I particulary like is simple and straightforward: logistics is the timely transfer of goods and information. You cannot separate the activity of moving the product from the information update – all coupled with an acurate timeframe. Logistics, at its very core, deals with getting things to move forward, along with the information that helps pushing everything through the supply chain.

So, is this really that big?

Oh yeah – it’s big. And serious! Every time you take a product out of a supermarket shelf – someone in logistics brought it from the manufacturer – and put it there. Each loaded truck that crawls along the highway – means some logistics guy ordered it, and another guy is watching to make it on time. Any .com order that is fulfilled – a bunch of logistics guys working together to pack, send out, transport and deliver the precious artefact!

It might seem that the world is connected by the internet and social media – but the one person standing at the very base of things, keeping products moving, having ingredients ready for the busy housewife or contributing to big industrial plans is no other than the truck driver! The day all truck drivers in the world would unite in a common strike – would be the first day internet will become pointless!

This brings us to the end of the first article in the series. So just remeber (i) Logistics is all about driving things forward and (ii) it is the driver (whether truck, or bus, or sprinter or froklift) that pushes things through.

In the next article we will examine the main functional areas of Industrial Logistics.