items and situations that are outside of the knowledge of the scheduling package. The scheduling system is only as good as the information you provide it.


Q Q


28


Question #2. How often do you meet customer delivery demands?


❑ A. Never on time. ❑ B. Sometimes on time. ❑ C. Always on time.


Why are airlines in business? To make a profit. Why are you in the metalcasting industry? To make a profit. Customers are the only ingredient in making a profit.


Airlines continue to meet customer delivery demands of flying from point X to point Y with reasonable accuracy and on-time performance. The airline industry’s recent slew of surcharges are a method by which airlines assure their survival by generating a normal profit. Scheduling within a metalcasting environment is para-


mount to meeting customer delivery demands. Generally speaking, a metalcasting customer is a middleman that fulfills orders that are placed by the customer’s customer. The ability to meet customer delivery demands is a primary function of scheduling.


Question #3. When placing an order, a customer is able to be provided with a delivery date that is ___?


❑ A. Not accurate. ❑ B. Within three sigma of the mean.


❑ C. Mostly accurate, within two sigma of the mean.


❑ D. The date the customer wants and almost always on time.


❑ E. We don’t provide delivery dates. Your customers should not have to hedge their delivery


dates in order to assure your product arrives on their shipping dock at the correct time. Backscheduling from the customer delivery date provides the optimum production schedule for your metalcasting facility. When properly set up with correct metrics of molds per hour, efficiency rates and time studies, a scheduling system can assure that your customers will receive their products when they demand them. To determine your on-time performance rating, calculate


as a percent how well you meet your customer demands. If you accept and confirm an order from a customer and provide a ship date and delivery date in return, then these are the dates to use, and your goal is to meet them. Ship date and delivery date are different due to transit times, customs inspections, foul weather, etc. If you are not provided with actual delivery dates from


Q


your customer, then ask for them. Adjust your transit times in your scheduling calculations accordingly.


Question #4. In meeting your cus- tomer delivery demands, how much raw material and feedstock do you have in stock?


❑A. We never have enough in stock, are constantly scrambling to order


more to meet demand and often pay premium delivery prices.


❑ B. We sometimes run low on mate- rials and have to delay production.


❑ C. We always have more than enough material on hand.


❑ D. We understand how our customer demand impacts material inventory


and adequately balance demand with supply.


Idled material inventory represents wasted money with a


great opportunity cost. Opportunity cost is the money lost when it could have been utilized in a more efficient way, such as earning interest. For instance, major corporations “park” their cash overnight and on the weekends at various financial institutions to earn a few hours of interest. Over a period of a year, this can return millions of dollars. Airlines are masters of material inventory scheduling


and management. The airplane is only stocked with the required number of meals, water and fuel. Anything extra that is brought on board the airplane becomes waste and an expense. Your scheduling system should have a forward planning


material inventory system that is closely associated with the production scheduling system. Through this forward planning of material inventory, lost opportunity cost can be avoided by ensuring that only the required amounts of materials are in inventory to meet actual customer demand based on or- ders on the books. Expensive inventory of materials should not sit idle when there is no demand for it. Metalcasters without a scheduling system in place that also lack material inventory forward planning must resort to maintaining inef- ficient levels of inventory, which costs money. Remember, inventory is a line item on the balance sheet of a company and is directly tied to the cost of goods sold on the income statement. Misappropriated inventory is an opportunity cost.


MODERN CASTING / July 2010


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