Your chance to make a real difference

The ‘snowball’ of advanced planning and scheduling (APS) adoption seems at last to be starting to gather momentum. Starting, mind you; it’s not yet on a roll. Talk to the ERP vendors that have sensible APS offerings (go to www.mcsolutions.co.uk for a listing) and they’ll tell you that over the last six to nine months, the trend has been noticeably towards more APS enquiries at all levels – and take-up. How long have they been saying that though? If so, it’s about time. If not, we’re missing a seriously important and valuable trick that will cost us all very dear indeed. Gone are the days when APS, with the bigger supply chain management (SCM) interpretation, was only applicable to the very big boys. Supply chains, actually re-entrant supply networks, don’t just involve big companies, and today’s software (big ticket sophisticated at one end and low cost, local functionality at the other) can transform all manufacturing players’ ability to take part, not least by improving the efficiency, costs and flexibility of their internal operations. Further, implementation, which can be phased, is almost invariably fast, as long as companies take data cleaning, data accuracy and appropriate systems and processes integration seriously. This is not long term ERP all over again. And return on investment is pretty well universally rapid and substantial, given a genuine desire to change, backed by appropriate education, training and management encouragement and determination. MCS’ APS case studies have been proving this, particularly over the last couple of years. So what’s to stop you? Investment... In manufacturing we are living through spend-averse times, particularly when it comes to IT. Managements can be forgiven for wanting to reap the benefits of the investments they have already expensively made, classically in ERP systems, before doing more. But the message from those that have done APS, and achieved more simply than finite capacity scheduling (FCS, which alone is often a cathartic release), is consistently “we couldn’t manage without this”. Why? Because, while ERP ‘done properly’ provides the foundation for integrated operations – in terms of sales order processing, purchasing, inventory control, financials and so on – from a planning and scheduling point of view its basis in MRP II without FCS simply cannot deliver the speed and accuracy required by today’s business realities. It’s too slow; it’s based on a notion of infinite capacity; it doesn’t consider materials and resources concurrently; and the emphasis anyway is on longer range planning and purchasing management rather than on detailed scheduling. Today, with customers demanding reduced lead times and year-on-year lower costs, optimising the factory floor and, just as important, making it flexible and responsive to delight your customers, while actually slashing the conventional means of achieving that – safety stock – has to be the name of the game. Optimised and responsive It’s called being lean, and that’s precisely where APS, specifically at the all-important production level, scores every time, including for SMEs. You get optimised scheduling and asset utilisation no matter how complex your factory layout and the product lines you’re trying to pump through. You also get the potential for worthwhile visibility onto the factory floor as long as you have at least rudimentary shopfloor data capture and labelling. And you get the ability to run simulation-based ‘what ifs’ for everything from internal capital investment analysis and justification, to ATP (available to promise), CTP (capable to promise) and PTP (profitable to promise) routines for individual sales enquiries and automated supply chain transactions. In fact, APS is the primary ‘back office’ engine for pragmatic e-business. The one caveat: IT is never a panacea and APS is no exception: it remains absolutely the case that APS should be used to underpin a lean, Theory of Constraints, Six Sigma or similar initiative with the emphasis on better operational and business processes. But it does make these sustainable. All good in theory, but don’t take my word for it. Listen to your peers. Hamble Structures, part of Smiths Aerospace, which makes major structural components in metals, composites and acrylics for aerospace and defence, implemented Preactor’s APS a little over a year ago. Manufacturing operations director Derek Godsell says: “We have seen a 30% reduction in WIP (work in progress), a 10—15% improvement in capacity usage, and it has had phenomenal secondary benefits with regard to our [lean] Takt time concepts.” Then again, photocopier manufacturer Ricoh Products in Telford went for an Asprova-based APS system. Its supply chain manager Phil Hawkins says the system has cut the effort of scheduling 22 photocopier consumable production lines from five planners taking two days a week for weekly planning to one planner spending just two hours – allowing a move to daily planning in due course. And the big one: he says he can see 30% savings in WIP and 70% in finished goods safety stocks, as well as efficiencies from visibility of operations on the factory floor. Indeed, so enthusiastic is he that he intends now to roll out APS across the rest of production and the warehouse. 10 to 20% better profitability Meanwhile, contract electronics manufacturer AWS Electronics’ managing director Derek Fulluck expects his Lilly Software-based APS to deliver “more than 10% and up to 20% improvement in profitability”. The firm intends to switch off its MRP II this year, when all the data cleansing is complete, and says APS will provide the foundation for its aggressive growth plans and its proposed web-based collaborative operations with both suppliers and its contract customers. AWS cites everything from running ‘what-if’ simulations for cell and operator optimisation to reducing WIP and stock, and handling ATP/CTP enquiries online. Next, cash machine readers manufacturer Mars Electronics says it saw £100,000 worth of inventory reductions and overall savings of £350,000 within the first six months of adopting Manugistics (formerly the ST Point software) APS at its Winnersh site. Global pipeline manager Robert Gee says it has transformed MEI’s customer responsiveness and order promising to the point now of 100% due date delivery performance. He too cites ‘what ifs’ for decision support, not just on production scheduling but also for sales and pricing. And he claims advanced planning and scheduling has extended the life of the firm’s CA Manman ERP as far as manufacturing management is concerned. And there’s HW Plastics which makes cellular and rigid PVC profiles used in window frames and roofs/tiles. The firm is currently implementing £250,000 worth of Geac APS on top of its System 21 ERP to manage everything from forecasting to production at three sites, with automated planning and scheduling, and an operation for buying in ancillary parts. When it’s live next year, head of supply chain planning Steve Mabbott expects to reduce finished goods inventory, currently held to provide for the market’s requirement of next day delivery, by around 20%, providing ROI many times over. Then Dzus Fasteners is implementing Information Engineering’s TotalFactory APS first to get away from manual job time recording data entry (with its problems of cost, timing and data accuracy) and second to get the benefits of factory floor schedule and WIP visibility. IT manager Tony Hamilton-Smith says he expects the system to help flex the factory floor by enabling management to move multi-skilled people around its various cells and work centres according to directly perceived needs. In this way the company will be able to improve customer service and performance while also facilitating growth without adding more bodies. However, he is unable to put hard figures on expectations yet. The list goes on. ERP big boy Oracle’s senior consultant David Tudor mentions several clients now with the firm’s home-grown APS engine. Tube Investments in the Far East, for example, is on record as achieving everything from improved forecasting accuracy at the top level, to decreased planning cycle times, inventory cut by 35% and 25% customer service improvement. And Panasonic in South Wales, a KPMG Oracle 11i implementation, has seen inventory reductions of £30 million. APS is a catalogue of success. So many improvements Returning to Hamble for some flesh on the bones, the firm runs big flexible manufacturing systems (FMS) with multiple machining centres, each capable of producing multiple product lines at variable rates to order. Before APS, scheduling was manual on the back of MRP II, with schedulers attempting to sequence and maintain balanced loads on all the machines, but works orders invariably being marked ‘urgent’ towards the close of each day, and the usual picture of job chasing and changed priorities. Paul Willis, who led APS implementation at Hamble, says the firm selected Preactor after it absolutely rattled through an evaluation on a five Makino four- and five-axis machining centre FMS with multiple constraints around pallet loading and operators, covering 190 products across two customers, 492 works orders and 3,000 operations over a 28 day cycle. “We were astounded,” he says. “Within four minutes, it had generated a schedule that already showed a 5% utilisation improvement over the manual one – without fine tuning. Two engineers had spent in excess of six man weeks trying to manually develop a schedule for the cell with little success.” Additionally, Preactor offered an ‘out of the box’ solution at what Willis describes as a reasonable price, backed by Hamble’s existing shopfloor IT provider Dlog. That was just the start. During the three month implementation, Preactor was used to monitor process stages, revise timings and investigate work flow and batch sizes to reduce each to a workable minimum as per Hamble’s lean initiatives. Says Willis. “This fine-tuning liberated a further 5% utilisation improvement over the 5% we had already established. It also prevented us from making several costly and unnecessary investments in additional pallets, which at £20,000 a time, represents a substantial saving.” He reckons investigating the sheer range of scenarios to get these results without the APS “would have been impossible”. Sounding like the sort of thing you’d like to do? Since then the system has helped the firm to handle the downturn following the September 11 crisis, simulating consequential changes to customers’ best-fit requirements and helping to develop new optimum shift patterns with revised rate requirements. It’s also enabled Hamble to close the loop between scheduling and the plant floor, with automated, paperless working that hasn’t cost a fortune. Now, information is sent from the APS to existing Dlog shopfloor data collection monitors as CSV files to populate existing spreadsheets. As jobs are completed on each machine, works lists are automatically updated which in turn updates the APS. So as well as real-time scheduling, the master schedule now provides the planner with total visibility across the manufacturing cell. Willis: “We are now able to schedule the next two weeks work in 10 minutes and distribute it across the plant, all without generating a single sheet of paper.” He says APS is now the foundation for Hamble’s continuous improvement and ongoing lean strategy. And Godsell adds: “Possibly the best compliment I could pay is to say that Preactor was devised within Hamble rules and has achieved a Hamble result.” Praise indeed. And the bottom line is that there is a lot more to APS than advanced scheduling. This is a million miles from straight MRP replacement. If you haven’t already investigated the possibilities then do yourself a favour – do it now.