Factory Physics Inc. today announced the third release of its C-Suite operations performance software, designed to help manufacturing executives optimize both cash flow and operational scheduling.
The software suite is said to determine how well a manufacturing operation is running against best possible performance; identify, quantify, and prioritize performance improvement opportunities and report expected increases in cash flow and profit; and integrate improvements into existing management and IT systems to ensure sustainability, the company said in its announcement.
New tools in the latest release include a cash flow optimizer, inventory optimizer, flow optimizer, and cycle time analyzer.
While previous releases focused on time, capacity, and inventory tools, this version focuses on the financial impact of those disciplines, said Paul Martyn, VP of marketing at Factory Physics, in an interview with Managing Automation Thursday. C-Suite drills deeper into the process of scheduling production and executing on plans, providing direct action alternatives rather than simply best practices, and it measures both workflows and stocks to help managers make better decisions, he said.
For example, C-Suite ties inventory to customer service, and examines the direct financial consequences of changes. “If you run out of inventory, that comes at the expense of customer service,” Martyn says.
C-Suite is aimed at plant managers and higher-level corporate planners, and fits into the operations planning matrix between strategy and execution, Martyn said. “We take input from the forecasting tool and provide output to the ERP system.”
A what-if analysis algorithm quantifies the costs for operational decisions, such as inventory, lot sizes, reorder points, and quantities for predictive analysis. “While ERP systems are good at tracking what’s actually happening, they don’t do such a good job in helping you make decisions,” Martyn said.
“Manufacturing logistics is a balancing act. Anyone can reduce inventory, improve on-time delivery, or reduce cost if they focus on one measure at a time,” said Mark Spearman, CEO if Factory Physics, in a statement. “The real trick is to reduce inventory and improve on-time delivery and to reduce costs. The only way to do that is to have a comprehensive framework that considers all of those conflicting objectives and then optimizes total profitability.”
The software’s framework is described in a 1996 textbook that Spearman co-authored with Wallace Hopp, Factory Physics. Spearman went on to found the company by the same name in 2001, first as a consultancy, to apply the scientific principles discussed in the book to real-world operations. The co-authors determined that Six Sigma, lean, and other continuous improvement approaches often emulate case studies rather than scientific principles. As an alternative, they built a performance model, and eventually software, based on science and math.
During their consulting work, Spearman and company found that when manufacturers used the sales and operations planning (S&OP) process to build an operations plan, they usually did so in spreadsheets.