WIP Management

Copyright © Wondershare Software

Management of

Work In Progress

Detail + Logic » Flexibility

天下難事，必作于易天下大事，必作於細

Dick Lam Aug 2015


I am always a junior manager


I only focus on figures which is related to daily operation

I don’t have any strategic thinking; rather, just deal with reporting of expenses, staff turnover, absenteeism, canteen, dorm, daily sales, daily scrap & all trivial stuffs; above all, asking people do what they should do

To certain extent, my work is rather lame to senior management; I don’t say anything presentable!

I am just summarizing/restating something you have ever heard before

知人者智，自知者明


This is me…

BBA in Accountancy (HKBU)

Master of Arts in E-Business (CityU)

Fellow of ACCA

Worked in various MNC and industries, mainly manufacturing in mainland China, focus on management accounting, business strategy, tax planning, supply chain management and new business setup in PRC

2010~2011, Consultant in a US consulting company for a countrywide supply chain project

Now, Director of Business Process of a US mfg co.

Detail + Logic » Flexibility勝人者力，自勝者強


Contact Details

Mr. Dick Lam Chor Ki

[email protected]

http://dicklam128 .wordpress.com

http://www.box.net/dicklam128


Copyright © Wondershare SoftwareCompany Logo

Disclaimer

1. We only serve SME

2. We are not big enough to do JIT

3. We are small enough to use Excel for all reports and planning modules

4. We are diligent to work on every single detail of materials related stuff

5. We need more Excel/VBA talents


Copyright © Wondershare SoftwareCompany Logo

What is the Optimum WIP level?

1. Average of Max/Min of the historical amount

But why?

2. X% of the Raw Materials Warehouse Again why?

3. Annual Cost of Goods Sold / 360 * Average Production Lead Time +/- x%


Copyright © Wondershare SoftwareDetail + Logic » Flexibility

Why bother with WIP?

Holding of money

Distortion of production effectiveness Hiding of scrap Correctness of BOM Incorrect evaluation of operators performance and

improper performance bonus to them Finally, incorrect costing for proper product pricing

Incorrect inventory availability will impact production of other job orders

Leading to production inefficiency


Other issues with WIP?

So many items in WIP while records not match with physical inventory

Job orders can be finished without issuance of sufficient materials, why?

It is claimed that WIP is a must and it is almost impossible to clear up everything until year end while there is stock take of the whole factory

Shocked! So many write off!!

Line stopped because of materials lost while PMC claims that the ERP shows that the missing items does exist


Above all,

What products to produce and how many can be produced?



Learning Path

1Excel BasicsSelective functions and command to form the fundamentals of problem solving techniques (algorithm)

4 With materials receipt plan, it is still necessary to update the production plan by actual/latest materials receipt schedule for each shift of schedule within the week

PMP by Shift

2 Master Production Schedule – schedule of finished goods production, central to materials planning

MPS Basics

3 Production Materials Plan – what and how many to produce subject to materials availability for coming weeks based on existing materials receipt plan

PMP by Weeks


Excel Basics



Simplify the complication

Range NameOperator: &min, maxvlookup(key, range, column,

true/false) Index(range, row, column)sumif, sumproduct Indirect(cell.address)Offset

Excel Basics



Workshop



Master Production Schedule - MPS



What critical?

?MPS

Demand/Orders


Capacity Constraint

Materials Availability

Safety Stock Requirement

1

2

3


The demand is real only after production4

There is always Why


Workshop



PMP by Weeks



Mechanism - TOC

The less inventory of the BOM items determine the maximum quantity to produce for the particular product

“What ought to produce then what can produce” release unusable materials for production of other products

“What can produce then what minimum to produce” help balance the order fulfillment

As a result, low hang fruit to maximize production/order fulfillment – any single materials which the availability can help improve production volume


Output of PMP by Weeks


Besides possible output of products: What products short and no short? Materials Shortage – how many and when? Flexibility to determine the pull-in effort Inventory excessiveness – if unable to produce, why

incoming so much? Probable inventory holding If not able to produce, then when to produce


Workshop



PMP by Shifts



Production Materials Plan by Shift

7 x 2 = 14 shifts of immediate production materials plan



Issues with PMP by Shift

Partial materials being fed to Shop Floor while some materials are over-issued due to SPQ

Over-issued RM to be available to other work orders


Materials Scrap

X = Issued – Used – Transfer - Returned – Scrap

What is X?

What is missing?

What is needed?

Why WIP alw

ays

a problem?



Materials Handling

Enquiry the Materials Status by Job Order

What have been Issued Returned Scrapped Transfer (which job orders can use this RM?)

What & how many left to issue?

Program to transfer RM between orders

Users: Line LeadersDetail + Logic » Flexibility


If your photographs aren’t good enough, you are not close enough!



Thank you !


WIP Management

Business

Transcript of WIP Management