Production Planning & Operational Systems Modernization
Client Profile
Southeast U.S. Manufacturing Company - ~$32,000,000 Annual Company
$495,000
Annualized Packaging Sourcing Savings
13% → 86%
Schedule Adherence
79% → 95%
Inventory Accuracy
1.5 Weeks → 7 Months
Planning Visibility
~$783K Estimated Annualized Economic Impact
Including $495K in annualized packaging sourcing savings, plus additional operational savings generated through reduced downtime, improved inventory control, lower expediting, reduced over-purchasing, and improved logistics performance.
Challenge
The operation lacked reliable visibility into production demand, available capacity, inventory availability, material movement, and purchasing performance.
Inventory accuracy was approximately 79%, limiting confidence in materials planning and creating unnecessary purchasing, material shortages, and time spent locating inventory.
Production planning provided only approximately 1.5 weeks of forward visibility, and the operation did not have a structured, modern production scheduling system capable of coordinating demand, capacity, materials, and execution.
As a result, schedule adherence across all seven production lines was approximately:
13%
Average production downtime was approximately:
3 hours per day, per machine, across seven production lines.
Warehouse transactions, raw-material receiving, finished-goods shipping, material transfers, and packaging sourcing also lacked standardized controls and sufficient cost visibility.
The result was a highly reactive operating environment characterized by:
Limited production visibility
Low schedule adherence
Inaccurate inventory information
Material shortages and lost inventory
Excess and duplicate purchasing
Poor visibility into true production capacity
Frequent schedule disruptions
Approximately 3 hours of daily downtime per machine.
Weak material-transfer tracking
Shipping and receiving errors
Excessive packaging costs
Higher logistical and operational costs
Approach
A connected set of planning, capacity, warehouse, inventory, sourcing, and logistics systems was developed and implemented to create greater operational control.
Production Planning & Scheduling
A modern digital production scheduling system was designed, built, and implemented to replace fragmented planning practices and establish a true production plan of record.
The new system incorporated:
Forward-looking production requirements
Capacity visibility
Production priorities
Schedule-adherence tracking
KPI measurement
Work-center and resource constraints
Material availability
Long-range production requirements
Planning visibility increased from approximately:
1.5 Weeks → 7 Months
The new scheduling system also created a reliable baseline for measuring execution against plan.
Schedule adherence improved from approximately:
13% → 86%
This allowed leadership to identify capacity, material, and scheduling constraints substantially earlier and move from reactive scheduling toward proactive production planning.
Capacity Planning
Systems were established to measure true production capacity rather than relying solely on theoretical output.
Capacity measurements incorporated actual operating constraints and provided a more realistic understanding of what production could execute.
These systems, combined with improved scheduling processes and KPI tracking, helped significantly reduce production downtime.
Average downtime improved from approximately:
3 Hours per Day → 85 Minutes per Day
That represents a reduction of approximately 53% in daily production downtime.
The improvement increased available productive capacity and strengthened schedule execution.
Inventory Accuracy & Cycle Counting
Warehouse processes and cycle-counting programs were implemented to improve inventory control and materials visibility.
Inventory accuracy increased from approximately:
79% → 95%
Improved accuracy strengthened:
Materials planning
Production scheduling
Purchasing decisions
Material availability
Inventory accountability
Warehouse Material Tracking
An Excel-based warehouse control system was created to track material transfers and improve visibility into inventory movement.
The system helped reduce:
Lost inventory
Unrecorded material movement
Excess purchasing
Duplicate purchasing
Time spent investigating missing materials
Improved material tracking also provided production planners with more reliable information when determining whether material was available to support the schedule.
Strategic Packaging Sourcing
Existing packaging suppliers and pricing structures were reviewed to identify opportunities for cost reduction.
New packaging suppliers were sourced and evaluated based on:
Product requirements
Quality
Availability
Pricing
Supply reliability
Operational fit
The sourcing initiative reduced recurring packaging spend by approximately:
$495,000 annually
This created substantial direct cost savings while maintaining the packaging required to support production and outbound shipments.
Receiving & Shipping Processes
Standardized processes were implemented for:
Receiving raw materials
Verifying inbound material
Recording inventory transactions
Preparing finished goods for shipment
Confirming outbound shipments
These controls reduced shipping errors and helped prevent finished goods from being sent incorrectly, contributing to meaningful reductions in avoidable logistics costs.
Results
Annualized Cost Savings
~$783,000 per year
Strategic sourcing of new packaging suppliers substantially reduced recurring packaging costs while continuing to support production requirements.
Inventory Accuracy
79% → 95%
Improved inventory controls, cycle counting, and material-transfer visibility significantly increased confidence in system inventory.
Planning Visibility
1.5 Weeks → 7 Months
The new digital planning system dramatically expanded the production-planning horizon, allowing capacity, material, and scheduling risks to be identified months earlier.
Schedule Adherence
13% → 86%
A formal digital production schedule, KPI tracking, capacity measurement, and standardized planning processes created a measurable plan of record and significantly improved execution against schedule.
Production Downtime
3 Hours per Day → 85 Minutes per Day
Daily production downtime decreased by approximately 53%, increasing available productive capacity and improving schedule execution.
Production Execution
The digital production schedule and capacity-planning systems improved alignment between planned output and actual production capability.
This resulted in:
Significantly improved schedule adherence
Reduced production downtime
Better capacity utilization
Earlier identification of production constraints
More reliable production priorities
Greater confidence in long-range production plans
Warehouse & Materials Management
Improved warehouse systems reduced:
Lost inventory
Material-search time
Excess purchasing
Duplicate material purchases
Unnecessary material and packaging purchases
Logistics
Standardized receiving and shipping controls reduced incorrect shipments and the associated transportation, handling, and corrective logistics costs.
Business Impact
The transformation connected production planning, capacity management, inventory control, warehouse execution, sourcing, and logistics into a more reliable operating system.
Instead of reacting to shortages, missing materials, capacity constraints, excessive purchasing costs, and shipping problems after they occurred, the operation gained the visibility and processes needed to identify and address those issues earlier.
The result was better production planning, significantly stronger schedule execution, improved inventory control, substantially lower downtime, lower purchasing and logistics costs, and dramatically greater operational visibility.
Key Results
Annualized Packaging Savings: ~$495,000
Inventory Accuracy: 79% → 95%
Planning Visibility: 1.5 Weeks → 7 Months
Schedule Adherence: 13% → 86%
Daily Production Downtime: 3 Hours → 85 Minutes
Downtime Reduction: ~53%
Lost Inventory: Reduced
Over-Purchasing: Reduced
Shipping Errors: Reduced
Logistics Costs: Reduced
Focus Areas: Production Planning • Scheduling • Capacity Planning • Inventory Management • Warehouse Systems • Strategic Sourcing • Cycle Counting • Materials Management • Logistics • KPI Development
3 Hours → 85 Minutes
Daily Production Downtime