Frequently Asked Questions
- Who needs OTTO?
OTTO customers range from manufacturers of high-volume, quick response products to low-volume complex equipment. They share at least one thing in common, a strong belief a better way to utilize the data in their current system exist and data plays a key role in:
- improving people effectiveness.
- making plans happen.
- meeting customer commitments.
- What's the effort to install OTTO?
- It integrates seamlessly into your existing ERP database and requires no data entry.
- It requires virtually no IT resources
“Very little internal IT resources were used to implement OTTO. Granting authorities and monitoring progress were essentially the only tasks.”
- It is non-disruptive in that it supports current processes but can also be used as a catalyst to improve procedures and processes.
- What's required to make OTTO work?
OTTO requires a source of data, an ERP system or homegrown equivalent, and the software requires:
- Customer demand
- Manufacturing or production
- Purchase orders
- It really sounds like OTTO replaces planning, is that the real objective?
No, definitely not!
We once asked a materials manager how often he ran his planning system.
He said, “daily.”
“Because I have to.”
When asked if they planned every day, his response was no, they really planned once a week.
Then why did he do a planning run every day?
“To catch what's falling through the cracks.”
He thought about this for a few seconds and said, “That's what OTTO does, it catches what's falling through the cracks.”
There's an old adage that says, “Plan the work and work the plan.” Planning is really a statement of intentions and doesn't catch slippage until it's too late. OTTO's objective is to support planning by providing an effective method to work the plan.
- Can you give an example of how OTTO would be used?
We'll use bicycle assembly to explain how one customer uses OTTO:
Production orders for seats come down a conveyor and are pulled off, scanned and placed in a temporary storage area near the conveyor. At that point the production order is relieved and inventory is incremented. This is all correct. Material handlers attempt to pick seats for the assembly order but report there are no seats in the bin. That's because the seats have not been moved from the temporary storage area beside the conveyor into the stocking location for picking. This is a problem but it's not a planning problem.
The customer uses an OTTO feature that tells them:
They use this for short-term prioritization of moving material from temporary locations to actual stocking locations.
- inventory is required and on-hand
- but not in a location where it can be picked
- What are the benefits of OTTO?
- Improved delivery performance.
- Improved manufacturing throughput & efficiency.
- More effective use of inventory.
- Improved productivity of indirect employees such as planners, schedulers and buyers.
- Reduced expediting costs such as premium freight.
- What's OTTO really doing?
An earlier OTTO marketing document contains the following statement:
“OTTO organizes the data in a unique way to automate time consuming, non-value-added ‘data-chasing’ activities.”
An ex-ERP master scheduler and now a customer was reviewing this and said,
“This is a very minor point but I really don't think the point about ‘non-value-added’ time is entirely accurate. The data chasing is very, very time consuming but it's not fruitless, the very same information OTTO provides CAN be found in ERP systems — I used to do it all day long at XYZ. In summary, what generally happens is, because the work is so difficult and takes so much time, material planners stop doing it.”
When asked why he did this he responded,
“On time delivery was the driver. I looked at upcoming sales orders to determine what might keep us from shipping on time.
Next Wednesday we're scheduled to ship SO P56780
I went level by level — what do we have in stock, what don't we have, if we don't have it, will the supply order be done, etc.”
Line 001 — SP700 Frame (an assembly about 10 levels deep, about 700 parts)
Line 002 — Environmentally Hardened Workstation (an assembly about 7 levels deep, about 350 parts)
Several points about his statement:
- We’ve always said the data exists in the Host ERP system and never said manual data chasing is fruitless. We've always said it serves a very significant function — it's the brute force effort that gets shipments out the door and is very important.
- He may have done it all day long at XYZ, but the value he added wasn't in doing the chasing but in interpreting and analyzing the data after he'd chased it. The “bruteforce” chase itself, while necessary, was non-value-added. The manual process he describes is exactly what OTTO does and does effortlessly.
- And it was basically too late. For too many items his only response was to expedite as he didn't have enough time to prevent slippage.
- Our problem is capacity, would OTTO be of any value to us?
Perhaps, depending on the situation. If demand is very stable or can be controlled, a good plan to execute transition is in place and the plant rarely experiences an overload, then detailed scheduling for efficiency is what's needed and OTTO would likely be of little benefit.
It’s the middle of the week and total demand for next week is 40. One machine is run one shift so, ignoring efficiency, there are 8 hours available per day. This means the demand for 40 will be produced 8 per day; a balanced plan.
Monday comes and the material doesn't arrive. Tuesday comes and it arrives, but late in the afternoon which means there are only 24 hours of capacity to produce the 40 units; an apparent capacity problem has arisen.
But is it a capacity problem or a material availability problem… and could planning have prevented it? The vendor is only 2 days late, probably well within acceptable vendor delivery performance, but the lack of material has created an apparent capacity constraint that causes key users to swing into action just like firefighters on a call.
It’s like driving down the interstate projecting an on-time ETA unaware there's a delay somewhere ahead. This means next week's on-schedule orders will encounter obstacles and are now “pending” back-orders that will become new back-orders. And it gets even more subtle and insidious because future balanced plans are based on the “assumption” of eventual material availability, which may or may not happen.