A plant manager's guide to supply chain best practices

Learn the importance of supply chain strategy, coordination and planning in plant management and why each step of the supply chain is key to optimizing plant productivity.

In Pursuit of the Perfect Plant: A Business and Technical Guide
Chapter 6, Strategy, Coordination, and Planning

In order to operate a successful plant, a manager must ensure that best practices are being applied to every step of the supply chain. In this excerpt, find out why a steady flow of information through each level of an organization is essential for optimizing plant productivity and ensuring long-term flexibility and adaptability. Discover key steps in supply chain strategy, coordination and supply chain planning.

In Pursuit of the Perfect Plant: A Business and Technical Guide, Ch. 6
Table of contents:
An intro to strategy, coordination and planning
Sales and operations planning for manufacturing
Manufacturing plant information management
Information integration in manufacturing: Process control and planning software
Manufacturing supply chain strategy: KPI and execution in process industries
Manufacturing operations management and planning based on strategic models

An intro to strategy, coordination and planning


Peter Moulton, Joan Bonhoffer, and Krishna Balasubramaniam all sat around the conference room table, swapping travel horror stories over the last few crumbs of donuts. John Mulcahy stood by the whiteboard and cleared his throat for their attention.

"Welcome back, everyone. I know you've been busy traveling to plants, interviewing managers and executives, and reading everything you can get your hands on, in order to help us understand what constitutes the perfect plant," Mulcahy said. "We'll start by stepping back and looking at the big picture—beginning with strategy, coordination, and planning. After all, the plant is just one cog in the wheel of a bigger corporation—or at least it should be if it's going to be successful. Peter is going to fill us in on what he's learned."

Peter stepped up to the front of the room and took the pen from Mulcahy. "Strategy, coordination, and planning are primarily concerned with two big factors. First, the right things must happen at corporate to deliver instructions that the plant can execute. Second, the right information has to come from the plant floor so that long-term plans can be flexible and adaptable to abrupt changes in condition.

"Manufacturing companies tend to get bogged down when there is poor communication between the operating units and sales and operations. Bala and Joan, you'll probably bring up that same theme in your reports. Strategy has a lot to do with long-term goals being articulated in a boileddown, Reader's Digest series of directives that the plant can use to clearly see those goals.

"Similarly, a plant often views itself as a singular entity. As a result, the plant becomes isolated from the company's overall goals, just as the strategic planners can be isolated from the factory's issues and constraints. This separation is the fundamental condition we have to break through in order to achieve the Perfect Plant at the Strategy and Planning level. To do this, we need to make sure there is a feedback loop throughout the hierarchy—a closed loop—through which up-to-date information is always flowing.

"It's important that we're clear about our terminology. 'Strategy' is the big picture being set at the corporate level—the budget, financial goals, levels of customer satisfaction, and thresholds for product quality. Strategic goals are articulated in terms of quarters and years. 'Planning,' on the other hand, is the scheduling of production runs. Its goals are expressed in months, weeks, days, and hours."

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