Bonuses for shooting aliens
The little boy concentrated on his portable Nintendo, his fingers frantically pressing the buttons. The tip of his tongue stuck out of his mouth expressing his tension and excitement. Did he win the round? No. But his disappointed sigh was closely followed by another attempt to beat the aliens he was trying to kill (or whatever the game was about).
I was sitting opposite the boy and his mother in the departure lounge of Bristol airport a few weeks ago. I kept admiring his stamina and persistence, despite his repeated failure.
I had a different sort of admiration for the planning team I met during my trip that week. They often had their tongues sticking out the side of their mouths. I reckon they were biting them to distract from the real pain caused by their planning process.
Every week, they prepare factory production plans and schedules. Every week, the factory fails to meet the schedule, sometimes by up to 25%. Capacity considerations used are obviously not the demonstrated capability. Yet every week, consequently, the planners try to match demand with capacity they don't have; they procure material they don't use and they promise finished goods that never materialise.
Considering that planning more or less determines customer service levels, costs and ultimately profit, I was amazed by how little understanding these planners had of their own capacity. The resulting perception was that the factory was short of capacity. Yet I was not surprised to find that the production teams were allowed to make batches several weeks early to save change-overs, thus shooting any schedule to pieces.
Unfortunately, production schedules are not like aliens in a computer game. There are no bonus points for destroying them. Planning your capacity and keeping control of your schedules requires precision, discipline and science. The difference with the computer game is that you have an unlimited number of goes to start the process over again.
Hugh Williams
Founder of supply chain planning specialist consultancy Hughenden
