Who holds the authority to modify the production plan?

Who holds the authority to modify the production plan?

It's a strange question. However, this happens daily in most factories, yet it is often overlooked.

An operator modifies the plan. The specific unit was complicated, and he didn’t want to work on it. Alternatively, he couldn’t find the materials for that unit. If the production plan is overridden by material availability, the purchasing or supply chain has the authority to adjust the plan. In fact, the material is in the plant, but its quality department has delayed its use. It has been on hold for several weeks; they have put it on hold, and the rest must adapt. Consequently, the quality department can override the schedule. Why was the material put on hold? This was due to a tooling break. Preventive maintenance was skipped. Since the tooling is unavailable, we need to adhere to the maintenance department’s service terms.

Ultimately, the truth is that anyone can stray from the production plan.

Let’s consider the planner's perspective. Every day, they arrive at work to find that nothing has gone as planned. It is even more challenging to understand what has happened. Sometimes, they conduct physical counts only to discover that the submitted data is incorrect. Additionally, their mailbox is overflowing with “rush orders.” In some cases, the rush orders violate the system, yet the salesperson's request is politically powerful enough to be upheld internally. The planner must accommodate this situation. Then, a strange yet typical day continues. They changed the plan eight times and finally published it. But they know it won't be followed—there's no sense of accomplishment, just another exhausting day.

Question: Can we regard this as a “plan”?

We can refer to the dictionary or AI for definitions, but they are unclear about who is authorized to alter the production plan.

Shouldn’t that just be assigned to the planner?

When everyone is allowed to change the plan, they all need to be prepared for it. They must stockpile extra inventory to manage the situation. They require additional time to handle various orders. They should anticipate that output and lead times will be unstable. Many companies have made significant investments in IT because nobody follows the plan or has the authority to modify it; therefore, a system is necessary to track what has been accomplished. This is a kind of “push” system. “Push” is not happening based on the plan. “Push” is happening because everyone is pursuing what is convenient for them, focusing on selfish efficiencies rather than the plan or overall efficiency.

This indicates that when designing a pull system, the production plan is consolidated in a single location. Subsequently, other processes respond to signals or products in a first-in, first-out (FIFO) manner. No changes can be made to the plan. If the plan cannot be followed, processes must be allowed to stop, and the cause of the stoppage must be resolved immediately. In this system, the plan is reliable. Because the plan is trustworthy, problems can be identified and addressed sooner. For example, we don’t take action when we run out of materials; instead, we take action when the materials reach a certain level.

There is an issue with planning mistakes. However, can these planning mistakes be rectified without halting production? If the expectation is that when there is an error in the plan, production will resolve it, then the planner will never learn. Even if they are informed, if there are no consequences, why would they improve their planning next time? The only way to enhance the plan is to pause and address the issue.

There was a plant that followed a production plan. Other plants in the company had larger teams managing issues throughout the day by adjusting their production plans. Customers were pleased with the delivery results from this plant, particularly when there were no rush orders. The transition to a pull system was seamless. We established guidelines for managing customer orders and identified the point in the process where the order would be handled. Once we recognized the bottleneck associated with batch size, we focused on improving the changeover process. As the batch size decreased, our ability to meet demand improved, and inventory levels were reduced.

After a smooth transition, we spoke with the plant manager, who praised the pull system and its enhancements. I had to push back and ask why only his plant was following the production plan. When I raised this question, he laughed and admitted that he was a production planner. Like many planners, he dealt with constantly changing plans throughout the day. One day, he grew tired of such changes and discussed the issue with the plant manager at that time, ultimately making an announcement. “The production plan must be followed. If we don’t have the materials to fulfill the plan, we will stop and make the purchasing accountable for the downtime. If we can’t fulfill the plan due to quality reasons, the quality is responsible. If we can’t fulfill the plan due to maintenance reasons, the maintenance team is responsible. If the plan is poor, the planners will be held accountable. Rush orders will be processed following our standard procedures. If you wish to violate the production plan, please come to the plant manager.” He admitted that there were some hiccups at the beginning, but it eventually became smooth.

The truth is that living in violation of the production plan reflects a typical culture where management focuses solely on output. However, this culture obscures real responsibilities, leading to specific improvements that yield no results. For example, even if purchasing has made materials more available, these changes may not impact output, as the issue was resolved by adjusting the production plan. With improved material arrival performance, workers may feel less burdened as they no longer have to deal with unnecessary problems. However, management, which only cares about output, will be perplexed. By violating the production plan, they have become accustomed to incorrect responsibility environments that hinder improvements. Adhering to the production plan requires clear responsibilities that are often overlooked.

So, who has the authority to modify the production plan? Clarifying this point might be the starting point of your improvement journey.