How to improve business performance through scheduling
Maxim # 3
Scheduling is King
If anything differentiates successful businesses and successful business people from the rest of the pack it is their ability to understand this Maxim. You shouldn’t be fooled by its simplicity (or by the awkward grammar).
Scheduling is King refers to a reality that we learn over time and through experience. In almost all cases, sustainable profitability results from how well a company is able to schedule its business. A brilliant strategy is powerless without a good schedule. Brilliant managers can sometimes provide temporary excellence but it won’t sustain over any meaningful period of time. Only an extremely differentiated product that commands a high premium can match scheduling in terms of its power to influence profit (and few products can sustain such a position for long).
Why is scheduling so important? Scheduling is the key control point between the future and the past, or in our terms between planning and measurement. It is the final set up before execution and determines whether you make money or lose money. A good schedule is built from the key profit drivers that you need to achieve your plan. All too often however the schedule is reactive and the key profit drivers are ignored. The schedule is more of a hot list due to past problems or missed communication or false promises.
In many companies where we work, scheduling is somewhat of a black hole. It is sometimes difficult even to find out how the schedule is put together, and quite frequently it is done through some kind of voodoo by a scheduler in a back office. This is odd given the importance noted earlier. MRP and ERP systems are supposed to schedule but they rarely work because the data in the system is often inaccurate.
A client at an automotive supplier once told us, “You do a great job breaking a management system down into pieces and telling me how to crew the plant. But what I need from you is, now that I have crewed the plant properly, which products should I put on the line, in what sequence, in what batch size, to optimize the profit from this facility. You tell me how many pieces we will produce but you don’t tell me how much profit we can or we should generate”.
Fixing the schedule requires everything we know about product, process, systems and behaviors. The schedule must be built to be profitable and satisfy the most important customers (product), it must be based on the planning guidelines of each step in the order cycle (process), it must satisfy the drivers of revenue, service, cost and speed (system), and finally it must signal to managers and employees what they need to do (behavior).