RULES OF ENGAGEMENT
Rules of engagement will be discussed several times as the topic of master scheduling continues to unfold. These rules govern the decisions to service customers as well as manage costs and risks. For example, using the scenario from Table 5.6, there could be a rule governing promises that says:
For MTS product family 123, promises will be made from inventory up to order quantities of 50 pieces. Single orders received for more than 50 pieces will be considered special orders and not planned for or inventory stocked in readiness for normal demand. Master scheduling will work these exceptions and respond to order management with a promise within two hours from receipt of request. This policy will be reviewed monthly and is the responsibility of sales to revise.
In reality, these orders can be shipped in many cases. The solution comes from, again, agreement on cost and customer service. Some customers are always worth the extra cost; others may not be. By understanding the math behind the process, better decisions can be made to minimize inventory exposure and maintain high service levels. It is important to note that rules of engagement are not made to say no to the customer. These rules are designed to understand and acknowledge the costs of saying yes.
The master scheduler is the keeper of the rules. The demand side of the business has its eyes and ears closest to the marketplace and must make sure that the rules are in best alignment...