Item-Based Planning is the Superstar Choice     

Are you a job shop?  A contract manufacturer?  A custom manufacturer?  A product line manufacturer?  Do you fit one of these stereotypes?

Manufacturing Stereotypes

The stereotypical job shop operates on a quote-order-job cycle. All planning is job-based and inventory is minimized by purchasing only what is required by each job.

The stereotypical contract manufacturer is similar to a job shop, but has a higher proportion of repetitive orders priced with longer term contracts instead of quoting each order.

The stereotypical custom manufacturer engineers products to order with job-based planning and buying for the job to minimize inventory. Custom manufacturers often feel “too custom” for a formal planning system.

The stereotypical product line manufacturer makes products to stock, carries a lot of inventory, and uses forecasts to plan material requirements.

Stereotype planning methods don’t cut it anymore

If you operate your business according to one of these stereotypes, you are limiting your efficiency potential and market competitiveness.  Times have changed and the planning methods that worked in the past don’t cut it anymore.

Customers expect rapid time to shipment

Today customers expect rapid time to shipment, even when products are customized to order, and have no tolerance for the long lead times of the past.  If you cling to job-based planning, you cannot significantly reduce lead times and risk losing market share to faster and more nimble competitors.

Product lines are far more complicated

Product lines are far more complicated today than in the past.  Making products to stock with forecast-based planning is increasingly futile because no one can accurately predict future demand at the individual product level.  Forecast errors for sell items create a “bullwhip” effect that magnifies errors among lower level items that result in chronic over-stocking, shortages, and rescheduling.

Manufacturing companies no longer fit precise categories  

The manufacturing companies of today do not neatly fit into precise categories anymore.  Today it is not uncommon for a company to do some job shop work, some contract manufacturing, and to also make some standard or customized products of its own.

Manufacturing superstars choose item-based planning

Manufacturing superstars recognize the inherent inefficiencies of job-based and forecast-driven planning and choose item-based planning instead where the focus is on an overall time to shipment and supply pipeline strategy.

DBA is an item-based planning system

DBA Manufacturing is an item-based, demand-driven planning system that liberates you from the inefficiencies of job-based and forecast-based planning.  Item-based planning provides an efficient solution for any type of manufacturing company and any type of product.

DBA transcends job-based planning

Job-based planning is inefficient because it forces a one-for-one job or multi-level job set with each order.  With DBA jobs are generated with natural one-for-one quantities when demand happens to be one-for-one, but consolidates job quantities when demand is shared.  Without job restrictions you have the freedom to plan commonly used subassemblies and materials for stocking to eliminate lead time contribution and achieve more efficient run sizes and order quantities.

DBA transcends forecast-based planning

Forecast-based planning is inefficient because forecasts are always erroneous and errors amplify among lower level items.  Jobs and purchase orders require constant adjustments and rescheduling to synchronize forecast requirements with actual demand.  DBA replaces forecasts with supply pipelines that only replenish stock when triggered by actual demand.

DBA is ideally suited for custom manufacturing

No company is “too custom” for item-based planning.  It is more efficient to plan order policies for subassemblies and materials according to total usage and lead time contribution instead of for one job at a time.  DBA enables one-off BOM creation from model BOMs or from scratch for customization details and then generates demand-driven jobs and purchase orders within a coordinated master schedule.

Take your efficiency to an entirely new level

Item-based planning is the superstar choice because it reduces lead times and optimizes inventory utilization.  Item-based planning will liberate you from the stereotype methods of the past and take your efficiency to an entirely new level.

Mike Hart

Author Mike Hart

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