Eliminating Late from Your Manufacturing Scheduling

• 49:35

SUMMARY KEYWORDS

Manufacturing scheduling, dynamic production method, finite capacity scheduling, ERP integration, execution plan, buffer sizing, real-time prioritization, on-time delivery, whip reduction, production visibility, AI application, priority list, job scheduling, custom manufacturing, Lean concepts.

SPEAKERS

Trevor Calder, Mark Lilly, Damon Pistulka

Damon Pistulka  00:07

All right, everyone, welcome once again to the faces of business. I am your host, Damon Pistulka, and I’m going to turn the names on for my special guest today, because we are going to be talking about eliminating late from your manufacturing scheduling. I’ve got Trevor Calder right over there. I’ve got Mark Lilly right down there. We’re going to be talking about it. They wrote a book that we will be discussing is never late is better. That’s a good title for that. So let’s get started like we always like to. Let’s talk. Let’s, let’s have the guests introduce themselves and talk about it. Let’s go ahead, Mark, tell us a little bit about yourself. Thanks. Got into scheduling, manufacturing, ERP, integration kind of stuff. Tell us about it. Sure.

Mark Lilly  01:00

Yeah. So thanks. Thanks for having us. We we got together. Trevor and I got together several years ago, but the story starts way, way before then and and we actually kind of work together without knowing each other. And I’ll explain that in a moment too. But my, my dad in particular, who passed away a couple years ago. But he he started several different manufacturing ERP systems specifically for custom manufacturers, like job shops, yeah. One, one was called profit key way back in the 1980s Oh, yeah. Another, you may have heard another. Another was visual manufacturing, which was created in 1992 now my dad actually sold that to infor in 2004 but both of both of those systems had still have profit key, by the way, we have no financial interest in anymore. What it was, it was, it was recently sold to ECI of you know of job, boss and one fame, right? And, and, and visual, of course, is, is actually still being sold a net new out there. But what we found was both of those software products had still have the traditional finite scheduling model embedded in them, right? Really good software, just like a lot of ERP systems have really good software. But what we find, what we found with profit key and visual and we still find today with any ERP, is that most manufacturers struggle with scheduling. They struggle using these tools. And so we took a hard look at it to understand, you know, why this is but they struggle with it’s not that the software is broken again. It’s, it’s, it’s the approach, right? You’re, you’re having to get all your data right. Your run times have to be pretty close to perfect. Your you have to, you have to run this capacity loading algorithm, ie, the scheduling program, to create your, your beautiful Gantt chart, right. And then once that beautiful Gantt chart is created, well, what, what do companies do? Well, they, they kind of throw it over the wall to production and go, here, go execute it, right? And when and when those folks get it, they look at it and go, gee, these, these priorities are look a lot different than what we talked about in the production meeting this morning, right? Number one and number two, especially in a custom manufacturing environment, a high mix, low volume job shop, make to order however you want to describe it. Five minutes later, something changes, right? A customer calls, changes a due date. Your best setup person doesn’t show up, the material doesn’t, doesn’t arrive on time. So you feel like you gotta go rerun that schedule to to adjust your priorities. It’s just a never ending loop. So we’ve come up with a very different method that actually reverses a lot of that. That’s what we’re gonna we’re excited to share with you today.

Damon Pistulka  04:13

Awesome, awesome. Well, mark your company is Lily works. I forgot to mention that when we opened Trevor Calder from, where are you at in Australia? Trevor.

Trevor Calder  04:23

I mean Brisbane, sunny, downtown, Brisbane. Oh, awesome, awesome.

Damon Pistulka  04:28

Well, Trevor, with PFM works, been working with production. I love what you say on your LinkedIn profile. It’s like, it’s about, I got it right here. So, so great. It’s software that manages production so you don’t have to do an Excel or on whiteboards. That’s awesome. That’s awesome. Yeah, so tell us a bit about your background, Trevor, and how you guys got what you’re doing and how you guys connected up to do this book. Yes,

Trevor Calder  04:57

many years ago I went to work. For an engineering company, and they wanted an ERP system. So they wanted someone that understood manufacturing and it so, you know, they get married all together, and we went through our selection process and we actually chose visual for the product. So then, you know, I was a customer, and the owner of the company knew I was going to get bored, so then he kind of organized so I could jump the fence and when work for the local channel partner. So I wanted to work for as a visual consultant for a number of years. And a bit like, you know, Mark saying everyone kind of, and like I say on the website, everyone buys an ERP system to manage production, yet they end up managing in Excel, you know. And it took forever to kind of work out why it is. And if you think about it, it’s like Mark’s been saying, like the model itself, everything has to be perfect, and life’s not like that, you know. So it’s, it doesn’t kind of represent reality. So that’s why, when we go out to Excel, we can kind of deal with those things. You know that we know this material is going to be laid or this is happening, so we adjusted around in Excel, and it becomes easy to manage production that way. Yeah. So, yeah. And then, okay, well, and then I’d written a book that about execution, because, you know, like was saying, the schedule creates a plan that we give to everyone and we expect them to execute it. And then, you know, when you don’t quite get the results that you expect, like, is it a bad plan, or is it the people not following the plan? You know, and that’s where the execution element comes in, in terms of, okay, well, you know, given this instant in time, what’s the most important thing we should be doing. And, you know, getting everyone focused on the right priorities and that sort of thing. And you know, the guys with Lily works, what they’ve done with the protected flow manufacturing and the dynamic production method, which we’ll have a look at soon. It kind of encapsulates all of that together. And, you know, you kind of want a software solution. So we ended up becoming a channel partner. And, you know, Mark and I have been working quite closely for a while, and we we’ve been trying to, because people kind of come to us for a scheduling solution, but we tell them we don’t schedule. So it’s kind of kind of intuitive, and then with the book, at least we could kind of explain some of the principles behind it and how it is actually different, and trying to get the message out there that it’s it’s not the software’s fault. You know, the software is doing exactly what it’s supposed to do. It’s just the fact that what we’re getting it to do doesn’t make a lot of sense. When you sit back and think about how life is and how things pan out.

Damon Pistulka  07:42

That’s a great point, because it’s doing what it’s supposed to do, but what we’re asking it to do does not mirror real life.

Mark Lilly  07:50

Yeah, yeah. And that’s really, that’s really one of the big disconnects is, as Trevor mentioned, people, most manufacturers when they buy their ERP, you know, scheduling is on the top of the criteria list. Oh, yeah. And there are a ton, you know, there have been a ton of software sales. ERP, sales made. And back when we sold visual and profit key, the same thing, they would buy based on, you know, how your beautiful Gantt chart, the fact that you could do finite capacity loading and things like that. And it was, it’s fantastic. The the issue is, what we’re asking these scheduling tools for, what we expect them to give us is really very simple, but unfortunately, they’re not delivering. And that’s why folks go out to excel simple, simple things like objectively, When should I start a job? Yes, we’ll talk. We’ll talk about that because, because if you don’t, right, you kind of smiled, you probably know, because if you don’t have that visibility, well, what happens? Well, if I’m Production Manager, and I’m not sure when I should, I sure as heck don’t want to start it late. So I’m gonna, I’m gonna start it early, maybe really early, right now, you’re now, you’re flooding whip with all sorts of stuff that doesn’t need to be out there, clogging things up, slowing things down, confusing the true priorities, right? So, so that’s, that’s one of the first issues we address. But back to the visibility, and that’s a key word too, is, is, is visibility? Folks, when they buy a scheduling tool, really what they’re asking for is visibility, because that’s what they struggle with. When should we start jobs? Do we have the material to even do it when? If we know when we want to start it, once it is started, and I’ve got, I’m in a midstream workstation, and I’ve got five jobs sitting in front of me, objectively, really not the one that I’d like to work on, because I kind of like to fast that up, or I’d like, but really, which job should I be working on for the benefit of the whole company, for the benefit of the on time, delivery, or throughput, or whatever we want to maximize for, for that job, for the whole company, right? So having that business, having the the. Visibility in the here and now. So we call that current, current execution visibility so critical, so that all the production folks are making the right decisions at the right time, and they have the information at their fingertips to be able to do that. So critical now the the $60,000 question is when, when the sales person comes down to production, or, or the customer’s calling asking, When can I get that order right? What credibility Do you does that right? And, and oftentimes it’s, you know, the the folks in production are having to say, Okay, let me take that question, and then they’re going to, they’re going to kind of walk, walk around, right? They’re going to walk around and see what they’ll find out few times are go kind of find out when, based on everything that’s going on, when, well, that shouldn’t need to happen, right? And what happens if something happens? Because that guy, that’s the guy who’s been here for 35 years, right? So, and he’s got it, most of it in his head. So what happens if something happens to that person, they decide to leave? So those questions should be answerable, and we believe, we don’t just believe our customers have shown us that our model supports having confidence in even the future visibility, and that’s really key. So once, once you have future visibility, now you have credibility in terms of when things will be able to finish, you’ve got an accurate or a believable load versus capacity right where? Where really, where am I going to have people problems in the future? Where am I going to have machine constraints? Or, you know, where might I have material problems that you you meant, before we started, you mentioned working in a in a facility that had had year and a half lead times on materials, right? It’s not, it’d be nice to see what the impact of that is on production, if, if that date were to move one way or another, right? So, so that that visit that future visibility is key. And then the other thing about the future visibility is, if you have any sort of tool that allows what ifs right? So, so what if I change capacity in some fashion, either adding shifts, adding what if I, if I’m actually able to hire people, or if I add a machine, or negative impact? What if a machine goes down, or what if sales gets that big order and puts that out at additional load, right? All all that information, what is the impact of that going to be on our overall on time delivery? What impact would it have on other jobs, and even from a financial perspective, what impact is it going to have you’re not able to do those sorts of what ifs and they they’re not, and they shouldn’t be believable if the foundation, if you’re, if your Future Foundation visibility is not believable, right? And that’s really the goal of implementing and establishing this approach, the dynamic production method, which our software helps you do, but it helps you establish, first off, credibility and the priorities initially, does production believe it is and is it truly maximizing what you want to maximize? And then believability and credibility in the faces that come after.

Damon Pistulka  13:24

Yeah, so your thoughts in this Trevor and as you see people that are, you know, struggling to use an ERP system. What? What are some of the common things that that you run into as well? Yes,

Trevor Calder  13:38

really, you know, just building on what Mark sort of saying there about, you know, creating that picture of reality. And if you think about the schedule itself and the way that it works, you know, if it’s giving you a bad answer, and you go, well, actually, our lead time, sorry, our process times are out. You know, we’ve saying it should take four hours, when really it takes three or takes five and it’s something, well, of course, it’s not going to give me a good answer, you know. So then you get this focus on accuracy, you know, we need this more accurate information, because then we’ll get a better result. And, you know, people have to try and because I know there’s going to be this variation, they try and trick up the ERP system a bit, you know. So they’re, you know, over inflating like times, or adding some move times, or it’s kind of this cultural, not a tribal, kind of knowledge, too, where, you know, people kind of go, Well, you know, if this department’s loaded to 120% well that’s fine, because, you know, they know this is kind of variation in there, and it’s going to be okay. But you don’t really know what’s real and what’s not? Yeah, so you know. So instead of tricking it up and with the the approach that we’ve gotten, the dynamic production method, we know there’s going to be variation. So we’re actually planning for it and very specific about it. So we’ve we can work with good enough information so the more uncertain we are, the bigger the buffer we. Have to put in. But if we’re a bit more, you know, we’re more of a controlled environment, and we, you know, it’s a bit more stable, then okay, we can have a little bit less of a buffer. Because what this is like saying it’s going to do, it’s going to absorb this variation as it occurs, and it’s also going to protect the due date. You said, when you’re making your promises to people you want date, it needs to be protected. You know, that’s your commitment to your customer, so if you miss that, you know, then everyone gets upset. So, but now we’ve got it protected, and we know if things are going wrong in advance, that we can be lot more proactive, and, you know, make those changes. So we’re going to get it out on time.

Damon Pistulka  15:39

Yeah, and I think you mentioned this earlier too. That’s awesome, because that that brings up the great point, really, what everyone’s struggling Well, wants to make sure of is the customer gets the product when they want it, yeah? So in the end, yeah. Did we, you know, all the way through, are we going to get it to the end? And the second thing, like you said, Mark too, is a finite capacity scheduling. Like most ERP systems, have you run the schedule, and as soon as you run it, it’s like a battle plan. As soon as the battle starts, it’s it’s no good anymore, right, right?

Trevor Calder  16:16

So key thing that we’ve done there, we’ve actually flipped it, because normally, you know, you create the plan and you execute. We we execute, then we plan. So, you know, we don’t have to run the schedule to work out what everybody needs to work on with the approach that we’ve got. By determining that, you know which job is in greater threat of being late, we know what the priorities are for everybody, and we don’t need to know capacity to do that. Because, you know, if you think about you’ve got a to do list, here’s my priorities for the day. If I get them all done or not, is a different question, but this is what I should be working on, first and then next, and then next. So by that decoupling there, it’s really just changed the the whole day. Oh,

Damon Pistulka  17:01

I can see that. I can see that. So this is good stuff. So what you guys came together? Let’s, how did you guys start working together? Then, how did the book come about? I mean, what? How did it come just wanted to say, well, we should write a book on this. I mean, just, just talk about that a little bit. Just take it over. You guys.

Mark Lilly  17:25

Well, yeah, so, you know, we just to be clear, Trevor and I didn’t invent the dynamic production method or write VFm software, right? It is actually the people who wrote profit key and wrote visual are the same folks who actually invented my brother, Dave, Mike Lily, Dave Lane, who is the primary development guy behind visual in particular, the two of them, my brother was really did a lot of the design, the mental design work and inventiveness around around the dynamic production method and and protected flow manufacturing. And he drew from a lot of he wasn’t, he was a TOC Jonah. Yeah, way back in the in the mid 90s, he became a Jonah. But it’s not strictly TOC. There’s a lot of Lean concepts. Yeah, there’s concepts from mathematical Q theory, in particular, you know, managing whip, using using Little’s Law, for example, mathematical Q theory, and certainly, you know, some Six Sigma type of statistical aspect as well. But the so we, we’ve been, I’ve been basically in a marketing and sales role, and it’s very interesting, because it’s, it’s an entirely new approach to scheduling, right? So most of the you know, when we get on and do it, do a demo, a lot of it is, is an educational process, right? Within an hour long demo, we’re kind of educating the these folks who have never heard of DPM or PFM on this new approach. And one of there’s a there’s a couple things that I won’t say we we struggle with, but that that come up. One is, and Trevor mentioned it, and I think you kind of, you know, your eyebrows went up a little bit, is that this execution, in the execution phase, where we’re just focusing on priorities and getting the right priorities out. The priority, the priorities are by design and on purpose, blind to your overall capacity, right? And that can if you’ve been doing finite scheduling for, you know, 2530, years, and somebody comes and tells you you’re going to establish priorities without looking at capacity. You know, they, they some, some have a hard time wrapping their head around that and getting getting beyond that. But it’s, it’s and it’s not that we ignore it at all when, as Trevor mentioned, when we run that simulator, when we start to look in the in the future, when we absolutely bring all sorts of and all the capacity into the. Picture, even material availability. The other thing that’s interesting around around the buffering, when we talk about buffering, is that some people think, Oh, well, you know, Jesus, it’s I can, I can easily get everything on time if I just add more buffer to my lead times right, easily. But that’s, that’s not what we’re doing. That’s not what and that’s a key point, is when we see manufacturers are using buffers today, but they just don’t realize it. So we, we ask them two questions so that they they kind of dawns on themselves, and that is what’s, you know, give me a give me a typical lead time, right? If sales comes down to production and says, hey, when can I get this, you know, ABC type part out to my customer, right? And usually in a we often hear like six, six to eight weeks, right? So let’s say eight weeks. So I’ve got an eight week Production lead time. Then the next question, of course, is okay, I know this isn’t reality, but just just imagine nothing else is in production, right? It’s just this job. You have all the material, all the people, all the machines are standing at the ready. How long would it actually take for that material to get that part created through all of its processes right on this eight week lead time part? And most say, you know, a week or two, maybe if it has to go outside, sometimes, the answer is three or four days. Sometimes the answer is hours, right? So, so there’s right that that touch time, the rest of it is, is what is, is what we’re going to call buffer. And that’s a really good starting point to the conversations. When we implement this method, we have several conversations. In fact, we want the production folks telling us, telling the system how big their buffers should be, so that they’re comfortable. Then they get that value added time. And then then you have some really great conversations, because if a part is always late, you probably don’t have enough buffer for it. But if it’s always early and you’re always, you know, getting it done faster than normal, then you can probably lessen that buffer. And now you’ve got it now you might be controlling whip too. So now if I’ve got a smaller buffer, that means I don’t have to send work out as soon. So now my whip is going to drop, accelerating everything that’s out there already. So it’s all interconnected, and one improvement in one area drives improvements in another. Yes,

Damon Pistulka  22:26

yes. It’s It’s amazing when you look at what’s behind scheduling and trying to do it in the software, and how much there is to it,

Trevor Calder  22:34

yeah, yeah. Well, thing with the dynamic production method, the way that PFM does it, if we really reflect the way that production processes it, you know, because the guys out there, if they sort of select the jobs, they would kind of go like this, you know, this is how they would process it, which is different to what the ERP system is telling us, telling them. But when you bring PFM and we’re really reflecting the way that they would prioritize and process the jobs a lot more, because it’s, you know, reflective, because they, the guys on the floor, kind of know what’s going on, you know, they kind of, they do it all the time. They’re the experts in the area. So it, you know, we have to kind of take that on board a lot.

Damon Pistulka  23:17

Yeah, yeah. So as you’re starting to talk to people about this, I mean, as you said, it’s part of a system that you you’re doing, what? What really drew you guys together to, to put a book together around, around the system.

Mark Lilly  23:39

Oh, well, Trevor. You know, Trevor wanted to get DPM and PFM, you know, going in Australia and New Zealand, Indonesia, that, you know, wherever, internationally and and that’s been great. So he’s, he’s really been, you know, our international channel partner, and we, I’ve even been over a couple of few, two or three times, just twice, the third, third, third time for Australian manufacturing week. Nice. So that’s, yeah, so that’s that’s been, it’s been a great event and reception. We get a tremendous amount of leads through that. It’s been great so, but just Trevor’s own excitement about it, and him having gone through the process of writing a book, I may or may not have told him that I felt like I had, you know, enough content. And you can tell I’m I kind of can’t stop talking, right, but about it, so I’ve got a huge amount of content my head. So I said, Yeah, I probably have enough for a book. And so he suggested we do it together. I thought it was a great idea, and that’s

Damon Pistulka  24:48

awesome, yeah, because it helps to establish,

Trevor Calder  24:50

you know, us as like experts, and gets the ideas out there and people can kind of understand, because, you know, we’re talking very different language. Of the time, and a different approach, where, you know, if people read the book and things like that, they start to understand it a lot more and, and, you know, kind of because we kind of explain, you know, why the traditional approach doesn’t work, and what’s been tried over the years, and then why this approach works, and that sort of thing. So this makes it a bit more, yeah, I think easy for people to understand those concepts, because, you know, that’s part of the problem, like Mark saying in a demonstration, you know, we’re spending probably half of that time trying to explain the concepts behind it. So at least that way, if they come in a bit more of an understanding of these newer concepts, and then we can go a bit deeper and into some more functionality that’s relevant to their environment, that sort of thing.

Mark Lilly  25:46

The method and the application of it is, is pretty simple. You know, we can, we can do a demo. We can do a demo in 20 minutes at the end of the day, right? But it’s the it’s you want to, you want to give, especially if they have a lot of experience with the traditional method, because this is so different than it. We like to, we like to give them some background about, you know, why? Why do folks struggle with the traditional method of scheduling? And then, and then go into, go into some of the concepts that make the dynamic production method really work. And, and we do that in an even deeper way. In the book, we just, we go into some really deep concepts. Let me, let me give you one that’s that’s really kind of interesting. Yeah, and this, this goes back a little bit to the area of a theory of constraints. And you may, you may know why, if you’ve ever, ever read the goal by Ellie Goldratt. But the Ellie would always talk about, in the Theory of Constraints, talks about, you know, utilization driving utilization versus versus throughput, right? There’s maximizing throughput. Well, you know, there’s, there’s no free lunch, right? You can only maximize one thing. And the the stark contrast between utilization and and actually queue time. So there’s a, there’s a, an exponential inverse relationship between the length of your queue times out in production, okay, meaning how long any job is going to have to wait for its turn on a particular resource and utilization. So what does that mean? That means, the higher you push up utilization, okay, that what, what you’re having to do is you’re having to get you’re having to make sure there’s material at every machine, essentially, if you want your to drive your utilization up towards 100% but what are you doing? You’re flooding whip with material that doesn’t and oftentimes material that doesn’t need to be there. So it’s not necessarily satisfying a customer order or an order even for inventory that was planned for. No it’s there to drive up utilization, right? So, so now you have this expanded whip. So the higher you drive utilization exponentially, the longer your lead times are going to become. If you think about realizing,

Trevor Calder  28:16

yeah, like, you know, think about driving to work. You know, when it’s rush hour, peak hour. It takes a lot longer, but it’s the same distance, you know. So what’s happening here to all the other cars on the road? And if you think about if you if you own the roads and you want them highly utilized, well that would mean I want cars everywhere. Now my roads are really highly utilized, but then my time to get to work is going to suck. Yeah, you know. So it’s going to take so long because there’s so many cars out there. So you know, as you start to move them off the road, well, then it’s a nice journey to work. It’s quite smooth. And so, you know, you if you think about you getting there faster and more enjoyable. That’s what you want for your your business. You know, as that material flows through the manufacturing organization from the start to the end, your customers are getting what they need. So, you know, the money will flow, and everything else around it, your customers are going to be happy. So there’s, you know, it’s more the point, like, in terms of, like, okay, it’s getting work through. That’s more important than, you know, having everything highly utilized, you know, yeah, off track with that and focus on the wrong thing.

Damon Pistulka  29:20

Yes, yes, because utilization is no good if it’s not actually producing that’s going to something that’s going to go out the door, right, or that right now, a lot of people, I mean, still to this day, measure utilization, utilization of a process in between other processes, without relative consideration of what’s happening before and after. You know, am I flooding behind? Am I? Am I, you know, flooded up to it with with stuff to work on, and really about the overall thing, because we’ve done that. Years ago, when I was running manufacturing facilities, we would we would figure out, with Lean Manufacturing, you just quit worrying about utilization, honestly, in a lot of respects, and you just figure out, how do I get my overall system to flow at the the rate that I need to support my customers? Yeah, and it’s amazing how that takes away the complexities that you add. When I’m like, I gotta, you know, there’s a big, expensive piece of equipment we gotta run that thing. It just it, just because, all I know, just creates these big piles of money that are setting out there in whip. And it can create big piles of money, and, you know, ahead of it, just the material that you have to buy to stay ahead of it, and with, with not much regard to what’s actually going out the door, right?

Trevor Calder  30:51

Yeah. And the other thing that we have as part of the the dynamic production method as well, is the real time prioritization, yeah. So those jobs which are out there, like we we’ve got, like, an emergency department, you know, whoever gets the priority is the one who’s most needs the attention, not necessarily who arrived first, you know, because obviously, if someone comes in with, you know, maybe they’ve cut their finger and someone’s having a heart attack, well, you know, you need to see the guy with the heart attack first, not the guy with the cut finger, because he arrived first. So with our approach, all the resources then, so we’ve got less jobs out there, so it flows faster, but the real time prioritization means that when I go to get my next job, I’m going to be working on the most important job as well. So that way, you know, it really does flow better, and what’s flowing is the right things. Yeah,

Damon Pistulka  31:42

so you mentioned this mark the difference from interacting with the traditional ERP scheduling to the DPM system and interacting with that on the daily basis. Talk about that a little bit, because I think it’s, you know, it’d be wonderful to see the kind of what a day looks like, and then what a day looks like, Sure.

Mark Lilly  32:06

So, so big, big picture, as Trevor described, we’ve, we’ve fundamentally reversed the model. So instead of, you know, asking a computer, you know, a capacity loading algorithm, computer program to come up with your prior your plan and then your resulting priorities. We establish priorities in real time, and the way we do that is every work order as it comes out, we either run stand alone, if you don’t have an ERP system, if you most of our customers have an ERP already. So we pulled our information over. That information gets automatically pulled over, whether it’s, you know, real time with some of the ERPs we support, do others are, you know, on a scheduled Net Change basis. So the work order information comes over, and every work order, it gets its own unique execution plan. And that execution plan, very simply, is the due dates, the anchor point I’ve got the buffer time, which, again, we discuss in length, in in our implementation approach. And then the the work, the estimated work that needs Touch Time, that needs to be done. So that is the execution plan that establishes when we should start the work. As if we’re comfortable with that buffer, I start it much earlier, right, and unnecessarily flood web. We know when to start it once it is started. To Trevor’s point, we use what’s called a threat level priority. And this is really key. This is really important, because traditional scheduling tools use. Due Date, right? Seems to make perfect sense in a make to order environment, a very important piece of information, but it’s a poor priority mechanism. Why? Because, especially in a high mix environment, you’re going to have right a 20 week lead time job that’s more in danger of being late, if we don’t get started on it today, than a job that may even be due a week or two out from now, right? That could afford to wait longer based upon how much work needs to be done, how often it needs to go outside and back and those sorts of things, right? So in traditional scheduling, we’re prioritizing everything by the earliest due date. Well, you’re working on the all those early jobs, but the ones that are due later, but have more work get very high risk, and maybe are late already, even though it’s way before the due date, right, just based on the amount of work still left to be done. Yeah, and that’s what we solve instantly. We give folks the visibility, as Trevor mentioned, what job in any department, any work center, down to the machine or person level is most important to be worked on right now. And we do that. It’s a real time calculation, a real time priority.

Trevor Calder  34:50

Can you typically do that? You know, sort of one to three months our customers are running live with the two. So it’s not this lengthy sort of process that we have to go through. It’s. Is quite quick and effective, and, you know, just to build on. So that’s all real, and now that’s all execution. But obviously you want to see the future as well. So instead of the traditional finite capacity scheduling algorithm, kind of loading stuff up into the future, what the DPM model does, it simulates you executing your priorities into the future. So it’s looking at those future points in time. What is the priority job going to be on these resources? Then we can see when things are predicted to finish, and because it’s simulating the way you execute the priorities, it’s a much better representation of how production is likely to pan out. And you also then able to see in advance, well, okay, I’m going to have problems in these areas, then I can be proactive, planning to say, well, you know, I’m going to have a problem around these areas in a few weeks time. Well, what if I did some overtime now? Or, you know, outsource this and do these different things. So with the simulation, it’s like a digital twin. So we can change some of those parameters, you know, we’ll add some over time, you know, add some capacity, or take it away, or, you know, change it up in the different ways. And then we can simulate you doing what you plan to do and these changes. And then we can have a look at the impact on lateness or revenue and all these different factors, so you can kind of work out, you know, which which decision is going to be best for the the organization. And even in some cases, if it means you’re going to be late, at least you can tell your customer. Now, I know, for me, like if a customer, if my supplier, goes and say, Well, look, you know, sorry, we’ve had some problems here. I know we said it would be Monday, but it’s probably going to be Friday, but we’re trying to get it sooner to me, well this, I know now, and I can adjust around it. You know, it’s nothing worse than when I have to call and it’s supposed to be here on Monday and they didn’t even know what’s going on and things like that. So it just creates that better customer experience. And you know, then you as a customer, you know you trust the supplier a lot more when they’re when they’re keeping you in the loop. And you know, you can react to what’s going on. So, yeah,

Damon Pistulka  37:10

yeah, exactly the so when you’re using the dynamic production methods. So we’re sitting here today. We’re in our when our old traditional ERP system, we move into the dynamic production method. We’re getting rolling with this. What kind of results do they see? Difference in results? What are the comments that you hear back from people that implement the dynamic production method, you know, and stop using their finite capacity scheduling models.

Mark Lilly  37:43

So one of the biggest impacts that folks see is the reduction in whip right now, there now with that, that vis so on the priority list. So Matt, our priority list right? We can be published on a big screen TV. You can certainly print it out. You put it on. We have an app on the iPhone or your Android device to see what your priority should be. But that can be filtered. So you can, you can filter it to say, you know, show me everything that is here now or will be coming through this department, yeah. Or you can say, just show me the next, you know, five days of work. Or you can say, just show me the the items for which I have materials, you’d say, just show me the items I have materials for and that I should be starting, right? That execution plans date is is now, or was yesterday or before, right? So I should anything that that I shouldn’t be starting yet, just leave off the list, right? So now I’m not starting work too early, sending work out prematurely. So it’s this reduction in whip, and we haven’t, we haven’t published it yet. We just have a brand new case study where this was a major factor for this company. Yeah, and that just that. So that dramatic drop in whip over the first couple few months of implementing the priorities is huge. Now, whatever, whatever is out in whip, along with the threat level, the right priority just flows through its resources. On time, deliveries go up, lead times go down,

Damon Pistulka  39:12

yeah. Well, and whip, I mean it whip. Whip is kind of like weight, right? It’s we build a pound here, put a pound on here, there, and the next thing you know, I got 20. I don’t need right and right, the only thing in business, it usually equates into hundreds of 1000s of dollars or millions over a decade. Yeah, and, and that’s the thing that I really see, that this would be cool, because your reduction in whip is, I mean, it’s everything. It’s everything from, yes, the dollars that’s in the material, the labor that you had to put into whatever step you are in the processing, but it also demands a larger facility, larger maintenance, more people to move material. All these kinds of things that just because, if I can produce, just say, I’m producing ten million or something, and if I can produce it with $100,000 of whip, or a million dollars in whip, that’s a lot less money that’s in play, but a lot less facility I need just to store that other extra $900,000 of product, absolutely, and people in a it just, it’s so much. When you look at reduction of width, the other thing do, do people say that they feel like it’s less stressful running these facilities because of the prioritization that you’re doing?

Mark Lilly  40:38

Absolutely? Yeah, there’s less, there’s less running around, right? Folks, know, like today they, you know, an operator needs to go find their supervisor to know what to work on next, or what do we have the material to work on the job? Yeah, that they have the traveler forage the material here they they don’t have to run around anymore. It’s right there they can, they can see it, right? So the

Trevor Calder  41:00

supervisors don’t get calls at night time from like afternoon shifts saying, What should I work on, or what have you it’s all there. And if anything kind of happened, it’ll just adjust itself, you know. So the guys are kind of getting their time back, and, you know, some people are, you know, because you kind of doing the work for the system without PFM, you know, you’re putting into Excel and adjusting everything. Then if something changes, you have to go and do all the work. Where, with this method in place, it’s a lot easier, because it’s doing it for you. You’re just kind of making sure we’ve got our dates right, and the other bits and pieces, people following the priorities, and then the rest just happens,

Damon Pistulka  41:38

yeah. And then the flexibility of being able to change on the fly, like, looking like, okay, a month from now, it looks like we’re getting, we’re going to have some late orders. Well, let’s, let’s work a Saturday or two. And looking at that, what will it do? I mean, I’m talking about that today, rather than talking about it when we’re already late and we got to get back up. Yeah, huge thing. That’s a, yeah, yeah. Really,

Trevor Calder  42:04

just make it a lot more proactive planning, rather than reactive planning, because that’s, I think, quite often, what happens over late what are we going to do? We’re now, we’re sort of saying, Hey, we’re looking in the future here. We’ve got something on the horizon that could be a problem, that’s likely to be a problem. Let’s do something now, you know. So it’s a lot more it’s a lot less chaotic the environment, because, you know, you’ve, you’ve planned for it, you know what’s going to happen, and you’re making these changes to influence the future. Yeah, I think your resources a lot more effective. And like you were sort of saying before, with the whip, if we if the resources of making things that you don’t need. You know, they’re just going to sit there. Well, they’re not making things that you do need. So they kind of suffer as a result of that. So, you know, the organization’s less effective. So as soon as everyone’s not working on things that they shouldn’t be, you’re working on things that you should be, and then, you know, it obviously flows better. Your on time delivery goes up as well. And, you know, everybody’s happy,

Damon Pistulka  43:01

yeah, yeah. So what? What are you guys excited about for in the world of manufacturing scheduling, what is coming up that you just go, Wow, this that, you know, we’re working on the dynamic production method, that’s fun and and all. But we, we are really excited for this that’s coming down,

Trevor Calder  43:21

get the method out there, because I would love to see the dynamic production method being the standard way that manufacturers use, not the finite capacity. So in that sense, we’re trying to change. You know, everybody in manufacturing to go they model it’s got the problems to make it work. There’s a lot that has to be done. But if you adopt the dynamic production method, life’s a lot easier, and it, it just kind of works nice. So, yeah, I really like to see that become the norm. Yeah,

Damon Pistulka  43:50

yeah. And you mark,

Mark Lilly  43:51

well, there’s, there’s some things we’re already working on, such as just cross, you know, taking the priorities now. And like for, for example, outside services, right? We have an, an outside services priority list that you can, you can actually share with your outside services provider, right? Because, right now, they’re probably working on a first in, first, you know, first, yeah, first out basis, right? Yeah. But the reality might be the one that just came in might be the hottest one that you need out and back, right? So, so you could share, you can, you know, virtually share the priority list with them to show them what their priorities are, be, to be. Just have them log in and they’d be able to see it right there. The The other thing, of course, is, is AI, right? And how, how do we apply AI to this? And there’s all sorts of opportunities, one of which is the buffer sizing, right? So, so right now buffer side, the buffer sizing in these execution plans that we’ve been talking about is man manual, in the sense that we have a series of meetings during implementation and and the the clients are telling us through a series of questioning and and looking at them together about what the buffer size. Should be and and then over time, we can see how they how they perform, how much buffer. You know you’re typically using these types of jobs, so we can resize them and whatnot. But I think there’s a real strong opportunity in AI to be able to, number one, establish buffer sizing proactively, right dynamically for folks based upon historic, just historical information that they might have today, right out of the box, and then certainly, as time goes on and we’re getting measurements against how they’re performing, against the the buffer sizes that can be applied even more, more proactively, and even used in the in the future projection and the future predictions, right? Yeah,

Damon Pistulka  45:43

yeah, that’s super interesting because it just, you know, we we hear AI and everything. And the, the real benefit, I think, that I’ve seen across the board and in applications like this, is it can consider more value variables that we really can contemplate, right, right? If we put them all together down on a spreadsheet, that might be one thing and figured it all out, but AI can somehow do it, you know, a lot more variables than we can and come out with these things, because you think about something like Buffer sizing, it could be as it could be as detailed as seasonality and machine and material. And, you know, get down to to the even the labor setting and who’s doing what, and, and, and adjusting that based on the the scheduling of what’s going through a certain cell or a certain, you know, department, absolutely so cool. So cool. Well, guys, it’s been awesome having you on today. And I tell you, scheduling is something that drives people absolutely batty sometimes in manufacturing, so it’s lovely to get to talk about it with you, if somebody wants to get a hold of you guys. So what’s the best way? So we’ll start with Trevor. Someone wants to talk to you. Trevor, how do they get a hold of you?

Trevor Calder  47:04

They could visit PFM dot works or LinkedIn. Let’s look for Trevor Calder or PFM works on LinkedIn. That’s probably the easiest. Very

Damon Pistulka  47:12

good, very good. Thank you, Trevor, well, Mark yourself, yeah.

Mark Lilly  47:16

Same Lily works.com or mark dot Lily at Lily works.com if you want to email me, I’m certainly on LinkedIn too. You can feel free to reach out there as well. Awesome,

Damon Pistulka  47:25

awesome guys. Well, we had a comment from Daniel here. It was early on we were going hard. So he said, working proactively rather than reactively is such a powerful shift in mindset for managing production. No more firefighting behaviors. And I know from you guys listening to you today, the dynamic production method definitely helps with that. So thanks for being here today. Again, we had Trevor Calder here from PFM works, and we had Mark Lilly, the president of Lilly works here, talking about never I can’t see my title again, I’m so excited eliminating late from your manufacturing scheduling. They’re talking about the dynamic production method of scheduling compared to finite capacity scheduling. Thanks so much for being here, guys. It’s great. Thanks for having us. And we won the

Trevor Calder  48:16

Amazon look up Neville. Oh yeah. Thank you so

Damon Pistulka  48:22

much. Trevor, hey, they do have a book. It’s never late is better on Amazon. I’m actually looking at it right here. Never late is better. Production scheduling reinvented for manufacturing performance. You’re going to see their lovely mugs on there. Get it on Amazon today and learn what we’re talking about, the dynamic production method, so you can go out and try it yourself and talk with these guys about it. More. Jose stopped in, excuse me, fantastic topic. Looking forward to reading your book and learning more about DPM. Thanks so much for stopping by Jose and dropping the comment. We appreciate it. If you came into this late, go back to the beginning, because you want to listen to what Mark and Trevor were talking about with finite capacity scheduling compared to the dynamic production method of scheduling and how that will affect your operation. Reach out to these guys if you need a more information on it. Get on Amazon. Never late is better. Check out their book. Thanks everyone for being here. Mark and Trevor, thanks again for being here. We’re going to wrap up offline. Have a great weekend. Everyone

Mark Lilly  49:32

Cheers. Thanks so much.