In the joint planning of production-synchronized call-offs (PAB) of complete assemblies and components of an OEM (original equipment manufacturer), for example in the automotive sector, and the system supplier (so-called 1st-tier supplier), rolling schedules are adjusted flexibly in line with demand. In addition to long-term planning (greater than 1 year), the“time funnel” tool is used for medium and short-term planning.

Logic of planning and time – the time funnel

The further away the 1st-tier supplier is from the actual delivery point at the OEM, the greater the options for action available to those involved in the supply chain. For example, the shorter the timeline to the “frozen point”, at which the components to be delivered are delivered exactly at the right time and in the right order (just-in-sequence), the less the OEM can change the types, variants and quantities of the components to be delivered that have been broken down from the rolling medium-term planning to the short-term planning. From an analytical point of view, the remaining timeline is a period of risk or uncertainty. We have thus penetrated further and further into the funnel of time (time funnel) until we finally reach the end of the funnel, the end date. The graphical representation of this planning and time logic resembles a funnel, hence the catchy term.

Freezing points, pearl necklaces and other monsters

The “frozen point” means that no more production-synchronized call-off changes are permitted from a certain – very close in time – point (e.g. 150 minutes before the final installation of the component in the end product). At the beginning of this frozen zone, there are no elementary changes to the delivery schedules (detailed delivery schedules). This is referred to as sequenced deliveries of components by the 1st tier into the synchronized flow production of the OEM’s “synchronous production”. Some manufacturers call this state “pearl necklace”. The pearl necklace is the now rigid definition of variants on the assembly line, which can therefore no longer be changed individually.

Casting uncertainties into plans

Even if the production-synchronized and sequence-compliant call-off and delivery plans (not only in the automotive industry) are planned with breathtaking meticulousness by specialists in logistics & supply chain management and allocated time and space as if on graph paper, surprises are not uncommon. Therefore, uncertainties and risks must be cast in plans, so-called contingency plans. These contain clear action strategies and measures as to what is to be managed by whom in which emergency. Emergencies in connection with production-synchronized delivery can, for example, be problems with the transport of parts to the final assembly plant as a result of an accident. However, it can also be defective parts that are noticed on the synchronized assembly line despite Six Sigma. The closer in time the problem occurs, the more difficult it is to find a solution that does not restrict success.

NOK part – What now?

There are separate emergency manuals with emergency plans for numerous emergencies. For example, in the event of a faulty part(non-conforming part = NOK) on the production line, the synchronized flow production process is not interrupted, but replaced by a back-up part or a dummy part and the product is ejected at the end of final assembly, disassembled by hand and reassembled. In most cases, this is more cost-effective than stopping the assembly line completely – even for a short time.

The world remains full of surprises

Despite ever-improving forecasts, despite clever strategic rolling out of plans, despite all medium and short-term operational and tactical high-performance planning, there is still enough room for action in the form of improvisation – the “shaky hand”. Because the more hurdles and obstacles there are in the way of your goals, the clearer and more robust your planned objectives need to be. The measures, however, must be flexible and changeable to cushion the surprising nature of our supply chains!

For more information on planning in SCM, see Complexity costs – two sides of the same coin.

Image source: © Judit Klein, License(CC BY-ND 2.0)