Effective production planning involves the consideration of many variables. Aside from the costs associated with labor, inventory and overhead, there are also costs associated with lead times. Detailed scheduling allows a careful review and mitigation of lead times by scheduling production based upon the specific product structure. Product structure is the order in which things must be done to complete a product; for example, the doors must be attached before the car can be painted.
Production is traditionally scheduled at an aggregate level, meaning that all the machines are lumped together as “machine resources” and employees as “labor resources.” Then the average hours to complete a project are calculated, divided by the machines and by the people to get an average rate of production that is then adjusted to meet forecasted demand. Traditional aggregate planning is why so many companies found such large cost savings when efficiency-planning techniques were introduced. While this system is commonly used, and can be effective in some cases, more often than not product structure must be considered.
Product structure is used in production planning to reduce lead times, which results in less idle time/more income because more can be produced with fewer resources. Product structure is considered by mapping the process required to actually produce the product. The process is considered in terms of what must be accomplished before a subsequent step can be completed, and parallel processes are noted. For example, in manufacturing a doll, it does not matter whether the eyes or the mouth are painted first, but both must be painted before the hair is added. The planning of production with these considerations is called “detailed scheduling.”
Detailed scheduling is the hallmark of efficient production. When used effectively, detailed scheduling works to prevent bottlenecks, reduce or eliminate lead times, mitigate idle time, increase production and, in essence, streamline the entire production process. Detailed scheduling combines capacity planning with inventory control management, so that everything from the resources available to the cost of storage are combined to produce a detailed schedule of production.
Detailed scheduling has the most obvious benefits in production environments where a variety of products are produced using the same machines. An example of this is automotive plants. Detailed scheduling also has a large role in production environments where products are nearly the same but only require certain specializations. Borrowing another example from the automotive industry, imagine the production of a specific type of vehicle and the specializations of color and upholstery, for example.
For all of its benefits, detailed scheduling also has certain limitations that must be kept in mind. First and foremost, detailed scheduling is based on forecasts of customer demand. As a result, it is subject to the same caveat, namely, subjective assumptions. The effect of subjective assumptions can be somewhat mitigated by trying to include as much quantitative data as possible in creating those assumptions and in using a “rolling-horizon” technique. A rolling horizon means that the detailed scheduling is implemented but reviewed and adjusted after a short period. Also, the person creating the detailed schedule limits actually may limit its effectiveness; in order for detailed scheduling to be effective, someone who knows all the ins and outs of the manufacturing process must complete it.