When we say “Work Management versus Supply Chain” some of us may feel a small pang of angst. Some of us might even compare the business units to Rock’em Sock’em robots!
Folks in the utility industry understand that often there are competing goals between these business units creating great dismay and frustration. Supply Chain needs longer lead times to keep inventory levels and costs down while Work Management needs schedule flexibility (i.e., shorter lead times) and just-in-time material.
Availability of material is crucial to managing the business. Managing shifting work schedules, priorities, adjusting work to fit within outage windows, requires flexibility across all resources, including material.
At the same time, the enterprise benefits from a smooth running, efficient supply chain. One that delivers consistent availability AND reduced inventory levels even when constrained by long lead times which require long-range planning.
Why can’t everyone be a winner?
One of the first steps is to talk - clearly understand that there are competing priorities and that both are important. Look for a “Win-Win” agreement.
As a second step, we need to understand the critical underlying issues creating the tension, such as these typical examples:
Changing Material Need-By Dates: Reality is, change happens! Customers, weather, and new work impact scheduling and effect material need-by dates. The question is, are there ways to exert control over these challenges? The answer is yes... "sort of."
There is a balancing act that occurs between the needs of Work Management and Supply Chain. Putting a process in place to lock down the schedule within an agreed upon time frame is a crucial step. When the schedule is 'locked,' Work Management agrees to take responsibility for any changes to the plan within the locked period. Supply chain assumes responsibility to provide material within the window.
Material Required Date is used to communicate the need and is defined as the work date approaches. Dates can be automatically updated from the scheduling process and used to provide precise communication to Supply Chain.
First Target Start Date, then Scheduled Start Date at the work order level (as the work is placed on the schedule, planned work, not assigned), then finally Scheduled Start Date at the craft level (with resource assigned, committed to work). The Target Start and Scheduled Start Date can change as conditions change but when the work is assigned to a resource (within the lock down window), this becomes a commitment to receive the material.
*Note: Maximo has two Scheduled Start fields, one at the Work Order level and one at the Assignment level.
Target Start Date establishes the initial Material Required by Date
Once the work order or task has been “scheduled” (no resource has been assigned) then the Scheduled Start Date updates the Material Required by date. The reservation is still “Soft” as no resource has yet been committed to perform the work.
When the work order or task has been “assigned”, the Scheduled Start Date for the assignment updates the work order or task Scheduled Start Date. This becomes the new Material Required by date. The reservation is now “Hard” because the work is now committed to be performed by the assigned resource.
Material Prioritization/Allocation: Hard or Soft reservations? If you use hard reservations for everything when plans change, the material is "locked up," and more material than needed becomes tied up in inventory. If you use soft reservations for everything, then you run the risk of stock-outs when you least expect it. Like everything else, there is a balance.
Utilize soft reservations when you are outside the lockdown window and hard reservations when a resource is within the window. With competing priorities, it's up to the Work Management team to determine what work should take precedence.
Exceptional Demand: All too often materials must be ordered as soon as you identify the need, before the design and approval, to ensure on-time delivery. There should be an agreed-upon process for managing exceptional demand, long lead time items and abnormal quantities of customarily stocked material.
It is a customary practice that long lead time items go through an approval process for both Work Management and Supply Chain, this reduces abuse. Notification of abnormal quantities can automatically be identified and communicated as soon as possible, usually in the design process. In both cases, the identification of long lead time items and the quantity that triggers an abnormal quantity notification should be determined and managed by Supply Chain.
Picking and Shipping Options: As with most issues, it’s three things: communication, communication, communication. Work Management needs and Supply Chain processes should communicate the acceptance and progress information to ensure all requirements are satisfied.
While there are competing goals between Work Management and Supply Chain, when there are mutual commitments to communicate - there can be WINS benefiting the business overall!
Got questions? We encourage you to write in and let us know your challenges. Learn more about using Maximo for Supply Chain here.