Just taking a break from the drama surrounding my new program to report that I was informed my old program hit 12 inventory turns before I left. Combined with 100% on time delivery and excess & obsolete below 0.5% of material cost of goods sold, I’m going out on a limb and claiming it as a textbook performance.
Which is funny because oftentimes when management makes a push to improve metrics there are always a cadre of homegrown materials people armed with excuses why the textbook approach won’t work in the real world.
The secret: The fastest way to reduce inventory on-hand balances is to ship it.

With regard to production scheduling, it is critical to know capacity and lead time. Many companies simply schedule to maximize revenue or achieve the customer’s need date regardless of what it means for operational excellence. Knowing capacity means you can assess and manage risk when outside forces require production schedules in excess of capacity. Contingency plans can be made to increase capacity and buy material inside lead time. With regard to our schedule, we were several months late starting due to redesigns from our customer. This required our manufacturing and test engineers to get creative and solve some capacity issues.
As far as material availability, I managed my “A” items tightly – super-tight. But I didn’t worry about the “B” and “C” items beyond ensuring I had enough on hand to build the schedule. That’s the whole point of inventory stratification: focus where the dollars lie. After that, it’s all about execution from the team: purchasing managing the supplier deliveries, and production control getting the material to manufacturing with enough lead time to build and ship quality product. In a prior post I stated:
As a Master Scheduler, I control much of the front-end of the manufacturing process – any variation on my part bullwhips through the organization. Variation isn’t something that can be avoided, however, but as a professional I need to be diligent about controlling those factors under my control… I track demands over time, supply exceptions over time, excess/obsolete over time… well, you notice “over time” is the critical factor. After each MRP run (we run weekly), I export all of my data and review several critical factors: has my backlog changed, is my planned order report correct, has my excess/obsolete moved unexpectedly in either direction, and has the exception report changed positively or negatively. There are many other items I track, but I start with these and use them to uncover issues and troubleshoot them prior to someone else asking me that dreaded question, “What happened?
So, by focusing on demand stability and material availability over time in a structured and disciplined manner, I did my part as Master Scheduler to maximize inventory turnover. When a team maximizes the inventory going out the front door, good things happen.
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:
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Ghandi once remarked that there are two kinds of people: Those that do the work and those that worry about getting the credit, and he advised that one should try to be in the first group. A noble sentiment, but in the real world I find such a person does not exist. I include myself in this analysis.
For each of us, there is a lifetime work-credit graph similar to a supply-demand market equilibrium graph in economics; ideally, we want to be working at equilibrium with the credit we receive. But, there are times where we work harder than we get credit for, and times where we get credit we don’t necessarily deserve. Human nature being what it is, we often put our efforts into those things that will maximize the credit we receive, regardless of the actual amount of work (or value!) we bring to our jobs.
Additionally, I’ve often complained that there is a reason that people who are good crisis managers got that way. In my experience, they experience an abnormally high number of crises, and then are congratulated for solving their own problems. I don’t appreciate these people the way others might. I believe a professional works to minimize their problems and variability, and understands their issues without needing to “go get their arms around it”.
So, I spend time every week developing tools at work that I hope will increase the value I bring to my job. It is an iterative process, always looking for that perfect tool that gives me perfect visibility. I’ll never find perfection, but the search gets me closer with every iteration.
I use most of these tools to analyze MY own performance and those things under MY control. I work in an extremely complex, dynamic environment, but the optimal work model in my industry is to minimize variation and maximize repeatability. As a Master Scheduler, I control much of the front-end of the manufacturing process – any variation on my part bullwhips through the organization. Variation isn’t something that can be avoided, however, but as a professional I need to be diligent about controlling those factors under my control.
Primarily, I use pivot tables in MSExcel in this process. I track demands over time, supply exceptions over time, excess/obsolete over time… well, you notice “over time” is the critical factor. After each MRP run (we run weekly), I export all of my data and review several critical factors: has my backlog changed, is my planned order report correct, has my excess/obsolete moved unexpectedly in either direction, and has the exception report changed positively or negatively. There are many other items I track, but I start with these and use them to uncover issues and troubleshoot them prior to someone else asking me that dreaded question, “What happened?”
I paste the data into spreadsheets and add a column for the date, then run a pivot table with the date across the top and the data being measured in the vertical column(s). Now I have a neat, easily-built, easily-understood trend analysis showing how the data changes over time. From here, I look for exceptions, troubleshoot, pareto, and start working to resolve as quickly as possible.
At this point, I am out in front of the rest of organization. No one is coming to me with a problem, asking how it occurred, and wanting to know how it will be fixed. The problem didn’t cascade or mushroom through the rest of the organization; most people never know the problem exists unless they’re involved in the resolution or I choose to tell them. The discipline with which I maintain and work this data provides me the opportunity to show my work in it’s best light. Ghandi was half right; There are two kinds of people, but I try to be in both groups.
