Historical Problems in Effective Order Fill
Effective Orders are customer sales orders that manufacturers or assemblers fill complete, on the original promise date, without last-minute personal heroics, unplanned interventions, or unexpected variable costs. This differs from “on-time order fill”, since it accounts for the extraordinary cost in dollars, distraction, and disruption that is often incurred to meet on-time deadlines.Despite massive investments in manufacturing systems and heroic efforts by both management and production personnel, the Holy Grail of Effective Order Fill remains elusive. Key reasons for this include:
Manufacturers focus on Perfect Orders, not Effective OrdersWhile Perfect Orders are complete, they may entail tremendous cost due to last-minute expediting, overtime, unplanned line changes, and the like. And often “on time” means on the most recent date negotiated with the customer, not the one originally promised.
Enterprise manufacturing systems focus on the manufacturing process, not the full order lifecycleAs much as 80% of manufacturers’ costs are in non-manufacturing processes, such as purchasing, forecasting, order management, engineering, and shipping, and undetected errors and variances in these areas ultimately cause many production floor problems. Enterprise manufacturing systems such as MRP and ERP typically ignore this interaction and therefore cannot address this crucial area for improvement.
Lean manufacturing principles haven’t been extended to office processesImplementing Lean only on the shop floor misses opportunities for improvements in office processes that could result in smoother work flow, greater productivity due to knowledge of exactly what tasks to perform in what order, automatic training of new workers, and systematic sharing of best practices.