Precise means being exact, accurate and careful about details. The difference between good and great. As we discussed in our recent Supply Chain webinar, this is not an easy task if you have a lot of fluctuating demand and uncertainty in your production process. During the webinar, Paul Coombe (Supply Chain Director at Nampak Glass) shared his insights on making the best possible use of your production facilities and optimizing the way you respond to changes in demand. This is particularly difficult at Nampak, a business that aims to produce 350 tons of glass per day while managing different production processes for different bottle types and maintaining customer service at a profitable level. The interview below summarizes how Nampak tackled this challenge.
Paul, why is production scheduling crucial for Nampak glass?
Every business wants to achieve the optimal mix of customer service, smallest logistics cost and inventory carrying cost. But certainly, in our industry, production scheduling is what will define if we do this successfully or not. The glass making business is a process-based business. Our furnace runs every day of the year, 24 hours a day – unless we schedule downtime. So in our kind of business, we really sell time. Production scheduling is extremely important at a tactical level, but it also has to provide a decision-making point for sales.
Our success is premised on having furnaces that output a certain amount of tons of glass every day and we’ve got to maximize the amount of tons we draw from those furnaces. Any change that we do will impact our ability to deliver the optimal quantity. What we used to do was avoid these changes because they are costly. But sometimes it can more efficient to actually incur some of these changes and deal with the complexity that results. That is why key production scheduling information takes center stage at our S&OP meetings.
What are the complicating factors in your production scheduling?
There are many complicating factors, among them:
- Highly seasonal productions
- A natural element of stock hold for certain color variations
- Storage; bottle specifications like color might change depending on temperature, for instance
In addition, the glass business has a long-term planning horizon, production scheduling informs this long-term planning horizon. The scheduling process in our business affects a whole lot of senior decisions that impact our long-term profitability. But you’ve got to be able to represent the details in a nice, clear way because then executives can see impact on cost. For this we need a system that supports visibility.
Our previous production scheduling process was very much based on Excel and, in fact, it was quite fixed. It was not a dynamic process, in the sense that it was impossible for somebody to model things, create scenarios and look at optimization opportunities. Previously, we were unable to change the monthly view to a daily view or a weekly view without a lot of hard work. It simply wasn’t possible to model the amount of iterations or the number of potential outcomes.
What we can now do is, instead of having a static view for a month and saying we’ll input these changes at the end of next week or next month…we can input them and model them live. We can take decisions in a meeting or in a week’s time. For example, we are able to make planning decisions and get our MT to approve them because we can model all the things that are of interest to the business. Now we can talk in the detail, in the numbers, in the facts. We can get decision-making a lot more quickly. Without this planning technology we would not be able to be as nimble as the market demands that we are.
Watch the webinar presented by Marcel Mourits (AIMMS SVP Supply Chain Strategy) below, or download our Nampak case study to learn more about the importance of demand driven production scheduling.