Slippage - The Hidden Enemy of Planning

Slippage definition
A materials manager has said:

“Just because something is planned doesn't mean it's going to happen.”

Slippage is any break in the plan that disrupts both normal material flow and the rhythm of the plant that is preventable by timely Knowledge Worker (planner, scheduler, production supervisor, buyer) intervention.

Slippage explained
An internal consultant recently said their materials problems would be eliminated if their planners would just “work the item exceptions.”

Exceptions have become viewed as a normal and necessary core part of item-based planning, but in reality exceptions are indications that events aren't happening according to plan, that out of balance conditions exist. But what would happen if the plan was perfectly balanced and there were no planning exceptions? Would all supplies arrive on-time? The internal consultant mentioned above thought so, but the materials manager quickly pointed out for that to be true every supplier (internal and external) must deliver every item on-time with no past dues.

So every properly planned item is, at the same time, a candidate for slippage.

So what causes exceptions? Exceptions are caused by things not happening according to plan - surprises:

• Demand surprises - change
  • Things happen that weren't planned for; changes in demand, short lead-time orders or changes to existing orders inside lead-time.
  • These typically indicate expedites but can also be move-outs/cancels if a customer order change causes a later required date for a component or causes it to be deleted.
• Supply surprises - slippage
• Things that were planned for didn't happen; supply events didn't happen, purchased or manufactured material didn't arrive .
• These typically cause past due messages.

Change is a well-recognized enemy of planning but slippage is an unrecognized enemy of planning and item-based planning doesn't catch slippage until it's too late!

Assume you're going to host an important meeting; major customer, corporate, user conference or supplier conference; that will be held the 15th of next month. You hold a meeting to plan it; location, times, room setup (seating, projector), agenda, speakers, content, caterer, airport pick-up, hotels, etc. It's planned and everyone understands their roles. So, do you just show-up on the 15th and assume everything has happened (which is what planning does) or do you hold follow-up meetings to monitor progress and make sure key tasks are on schedule?

Working the plan
There are some old adages about planning that are very sound:

• Failure to plan is planning to fail
• Plan the work, work the plan

There's a distinct difference between planning and working the plan and it's obvious a plan can't work itself. So what does it mean to 'work the plan' and how is it done?

Working the plan is all of those behind-the-scenes activities that planners, schedulers, buyers and production supervisors do to ensure resources are correctly coordinated and deployed to meet current commitments and make the plan happen.

There appears to be an implicit assumption that more effective planning either does this or eliminates the need for it. But it's the lack of an effective mechanism to work the plan that causes slippage to happen… and why project reviews are separate from project planning. Project reviews are to monitor key tasks to ensure they're on schedule or, if they're not, how to get them back on schedule. So if potential slippage isn't detected and prevented, then bottlenecks are created and not only will current plans not be met but near-term on-schedule plans will encounter those bottlenecks and suffer slippage, just like driving down the interstate unaware there's a delay just ahead.

Examples of Slippage

Critical components A company is a make-to-order manufacturer of underground mining conveyors and had no problem with common items (plate) or major components (primary castings, motors and drives.) Their concern was what they call the “100-200 dollar parts.” One morning a production supervisor went to the production manager and said they couldn't find the “dog bone” for a specific job. The production manager went to the stockroom and then to purchasing while the planner looked-up the part and said it was due yesterday and he'd check. A little while later the planner called the production manager and said the supplier would ship later the same day and it would arrive in the morning. The problem was the production manager not only lost time since the job was halted, but also had to redo the same-day schedule in order to keep the plant busy. They needed a mechanism to alert them before the shortage caused the schedule disruption so they could follow-up to ensure properly planned parts like the dog bone would actually arrive on-time and prevent slippage. Monitoring receipts A director of manufacturing was responsible for three upholstered furniture plants and, first thing every morning, reviewed yesterday's receipts from their foam supplier. The president said it was probably because the director didn't trust the supplier and wanted to confirm what had been received, but that wasn't the real reason. The real reason was he didn't care what had been received, he wanted to know what hadn't been received because those items would create a shortage and disrupt production. He was manually “working the plan” to identify potential problems so he could determine the affected schedule and prevent slippage by talking with the appropriate plant manager to adjust the schedule before it disrupted production.

Why is this Important?
Slippage is not new. When customer delivery lead-times were longer, users did manual, informal slippage detection and prevention. And, although it wasn't recognized it was even happening, it worked well.

This manual process consisted of:

• Manual data chasing to find the potential problems.
• Follow-up with suppliers (internal as well as external) to confirm dates.
• Communicate with colleagues to coordinate activities.
• Determine alternatives to overcome any current constraints.
• Feedback to internal customers in the event dates would be missed.

Now with shorter lead-times and staff reductions, users don't have the time to detect and prevent slippage. Planning is really a statement of intentions and doesn't catch slippage until it's too late.

The implications of unrecognized slippage and not addressing it can be demonstrated by the following:

A senior manufacturing manager might say:

“We miss too many shipments; we need a better planning system.”

or

“We miss too many shipments; we need a better scheduling system.”

but they'd never say:

“We miss too many shipments, we need a better way to work the plan.”

But planning by itself doesn't make things happen, people and processes make things happen. The need to respond faster is putting tremendous pressure on key Knowledge Workers. Not only are they struggling to meet daily commitments and relying on “brute force” solutions to get the job done, they can actually become unrecognized production constraints. Planning is more important than ever but is no longer sufficient to meet current challenges because it doesn't identify and prevent slippage. Slippage can create change and cause missed commitments!