It’s this domain where IT can show off its core competency of mass data processing and complex computing. Planning software is able to calculate a longer term preliminary plan based on an ever-increasing number of parameters. For the wire & cable industry it’s important that length-based inventory netting, grouping and parallel consumption of materials is supported in these calculations. E.g. the system should take the maximum drum size for production into account when creating planned orders. The planner can review and adjust the results before releasing the planned orders in time-buckets (typically one week) to the procurement and production departments. The production manager will typically apply a second round of optimization to the orders in these time buckets to achieve optimal production efficiency while taking the complex context of the production operations into account. We will discuss this in more detail in the next paragraph.
Information Technology can be instrumental in the planning process to reduce costs of products by optimizing production runs, resulting in higher margins for the company. The effort to optimize production processes should not bring the level of inventory turnover below acceptable levels. We have seen that IT can help in this balancing act.
In our next blog we will discuss how IT can contribute to Production.