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Is your production schedule getting out of tune with market demand?
Many companies use the monthly demand forecast, finalized at the S&OP meeting, to prepare the Master Production Schedule for the month. The weekly schedules get more detailed as we approach the week.
Do you realize that, in such a scenario, the production schedule running in the last week of the month is based on demand data fetched more than a month back? Is the actual consumer demand likely to be different from what was estimated at that time? Of course, by a substantial amount!
The problem actually lies with the frequency of refresh… not only of the demand outlook, but also the production schedule derived from it. Monthly refresh just doesn’t work in a consumer market.
Some companies have already moved to weekly refresh to ensure that their production schedule is more in line with the current demand. The best-in-class are now operating on a daily refresh cycle so that their production is always in tune with the real market demand.
Unless we correct the frequency of refresh, we’ll continue to struggle with the twin objectives of higher availability and fresher products to consumers.