Production Schedules- Alignment

“Strategic Alignment”

There are many variables the influence meeting production schedules.  One of which is factory strategic alignment.

The goals of a factory are heavily influenced by the incentive programs deployed in the factory.  These incentives should be driven by that organization’s competitive strategy in their markets.  Are they focused on advanced technology, low-cost producer, highest quality producer, fastest turnaround, or on-time delivery and customer satisfaction?  These incentives are, in most cases, conflicting strategies, and an organization can only prefer one to two of those.

Are the organization’s individual department incentives aligned with the factory goals?  If Production is incentivized by total throughput (total number of products shipped), there is a risk to quality and of using line capacity for Engineering process improvements or changes.  If there is an incentive for quality, throughput and engineering test/process tests are at risk.  If Production is incentivized for throughput, but Planners are incentivized for on-schedule ship, and the Test department is incentivized only on First Pass Yield or Final Yield, etc., you have conflicting incentives between each department causing chaos and an increased probability that the actual schedule will be ignored.   Each department tries to achieve their own goals and the overall goal of improved on time delivery, on quantity, on cost will not be achievable because of departmental priorities, use of equipment decisions, priorities in schedules, and determination of  individual measures.  Each of these criteria is a shared responsibility with all departments within an electronics manufacturing plant.

Preparing Recommendations

Also, with the above variable incentives, it is quite easy to “blame” departments for specific problems when dealing with delivery challenges.  The most common assignments of departmental “blame” seem to be:

• Sales accepted an order with less than the required manufacturing lead time
• Purchasing didn’t provide the parts on time
• Sales agreed to an order without checking into part lead times
• Production focused on running the high-runners rather than getting the smaller jobs through
• Production operator errors keep making schedules slip
• Equipment breakdowns are making schedules slip
• Production planners have no idea what’s really going on in the factory
• Process variation due to engineering processes causing scrap and rework
• etc…

All managers in their departments should be measured on common measurements, aligned with factory strategy, in addition to any department specific measurements.  Achieving these measurements is a group effort, and not only any single department’s effort. When all departments are evaluated, they must work together to achieve the measurement goals and thus more likely to meet the production schedules.

Are the departments’ in your factory incentivized to meet production schedules and aligned with each other?  Are they aligned to the company strategy (even if it changes every 6 months)?  What measurements do you use to know how well production schedules are met?

Next installment we cover other factors that affect production schedules.

Stay tuned…..