FAQ - What are planning time fences?
Best practice is to have 2 time fences for planning and control of a manufacturing company.
An emergency time fence is set at the point in time when changes cost serious money. This often equates to the final stage of manufacturing, particularly when there is set-up time involved. In strict "make to order" companies the emergency time fence can be as far out as the cumulative lead time. There should be agreed authority for changes inside the emergency time fence. There should also be a performance measure measuring "stability", generally owned by the master scheduler, which monitors changes within the emergency time fence. If there is a need to make frequent changes inside the emergency time fence this is an indication that, in the business you are in, you need to reduce your manufacturing lead times using the world class manufacturing ideas discussed in my book (see below).
The firm time fence is the point in time where there are some constraints to your business. Outside the firm time fence, therefore, orders and forecasts can be changed without reference to planners although changes will be subject to scrutiny by the monthly sales and operations planning process. You can see one use of the Firm Time Fence in the extract from Business Excellence on "Available to Promise".
In many companies the firm time fence is the cumulative lead time plus a week. For companies with short material lead times or ample stock, moulding companies often fall into this category, the firm time fence may be set with reference to capacity constraints.
The emergency time fence is a management tool. The firm time fence, on the other hand, should be set up in the master scheduling software. When an order or forecast reaches the firm time fence the planner will be sent a message to change the status of the planned order, created by the program to cover the demand, to a firm planned order, under the control of the planner. This essential master scheduling technique creates the vital stability inside the firm time fence. This is the biggest single difference between operating MRP and MRPII.