A successful business seeks to provide their customers with the right goods at the right time. This involves maximising productivity and to do this you will need a robust production plan.
Planning is a great tool to save precious time and reduce waste. It also offers a way of ensuring work flows well and that employees are on task. Following a production plan should also make it easier to manage stock levels – smoothing your production can help to build healthy stock levels, leading to improved delivery performance and happier customers!
Polar is small business that manufactures camping equipment, which is distributed to outdoor adventure shops. The business has grown significantly over the past three years, they have customers across the UK and have recently started pallet shipping to Europe. In line with their growth they have had to employ more stringent processes. Dan (owner and CEO of Polar) has instructed his senior team to explore the planning process – with the objective of making it as effective and efficient as possible. There are a number of key measures Polar will need to put in place in order to do this:
Forecasting isn’t easy, but Polar can use the information they have to try and work out the demand for their products going forward. There is no need for a crystal ball or a finger in the air approach. Polar can look at historical data and trends in the market, alongside existing orders and those which are a distinct possibility.
Manage stock levels
Polar do not want to clutter their warehouse with too much stock and similarly do not want to realise they have run out of the “fold-away camping table,” when they have already organised pallet shipping to Europe and the haulier is due at any moment. Safety stock should be set at a sensible level, with stock monitored and replenished (Polar could consider a pull system eg Kanban to assist with this).
Employees should never be standing idle and equipment left unused. A sound plan will ensure that employees are busy and capacity is being used. However, Polar shouldn’t overstretch the plant. Problems do arise and changes to the plan may be necessary – there needs to be room for some flexibility.
Standardise & identify risk
Polar should identify the methods and procedures that work well and roll these out across the company. They can be implemented as standard WOWs (ways of working). Bottlenecks in the production and distribution process should be investigated and resolved and if a problem occurs it’s important to document what went wrong. Understanding the problem will help Polar to put controls in place – reducing the chance of further occurrences.