Saturday, October 31, 2009

Taking Responsibility for Materials Management on a Mature Program or Product

I've already given an overview of the process I go through when doing material planning for a new product. This was based on successfully launching multiple new programs simultaneously, and I absolutely loved being involved at the early stage of a program or product. Being there in the beginning, a master scheduler or production planner has the opportunity to influence the way bills of material are configured, demand is loaded, and planning factors are set.

In contrast to this is planning for a mature product or program. I am taking over a mature program with a family of very complex assemblies on Monday, and this weekend will be spent preparing. Except for when I'll be watching the Florida-Georgia game. I do have my priorities, after all.

I plan to "live-blog" the process as much as I can without giving away any proprietary information. To set the groundwork, the program is very important to my company's current and future business and is generally considered a cash-cow. It is not without challenges however; inside lead-time demands, material shortages, and the sub-optimal impacts these have on inventory, operations, and profitability.

Step one in this effort:

Bill of Material (BOM)

Since the products are fairly complex from a technical and process perspective, I need to understand the Bill of Material. I find the best way to do this is to review the backlog and analyze the BOM and construct product trees for each active end item. Yes, I'm sure this exists already, but a few hours spent building it myself is a smart investment that will pay off in a deeper understanding of the product structure.

When I build a product tree, I like to just use Excel and I include the item attributes like:

  • Item Number

  • Item Description

  • Procurement Lead Time (longest component lead time)

  • Manufacturing Lead Time

  • Fixed Days Supply

  • Lot Size

Besides helping me understand the product structure and planning factors, this exposes disconnects between the way a product is planned and the way it is built in real life. For instance, if a product has a Fixed Days attribute set to 10 days, but over time the manufacturing team has found it easier to build in 15 day lots/cycles, the materials organization will always be chasing those last 5 days of components.

I'm not saying that is the case with the program I'm working on, but it is an example of what can be uncovered by doing regular reviews of the BOM.

After I complete this effort I will post again about the next step I'll take in my preparation. If you have questions, fire away in comments.

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