Finding the best order in complexity

Key benefits Finished goods stocks reduced by 20% on monthly planning; expected 35% by the end of this year and due to improve further on weekly scheduling Massively reduced expensive weekend working by linking in planned maintenance Planners can respond quickly and accurately to ‘what ifs’ around forecast inaccuracy, new business, new brands and proposed campaigns – with visibility of manpower and machine capacity requirements, bottlenecks etc Made sense out of the complexity brought about by diversification Enabled flexibility and responsiveness Making sense of complexity, itself brought about by the need to diversify and to create flexibility and responsiveness, is never easy – but it is getting easier. That’s certainly what cigar manufacturer Gallaher found when it opted for an advanced planning and scheduling (APS) system to manage its multi-stage, multi-product factory in Cardiff, South Wales. And within a few months of going live it’s already seeing costs falling significantly and rapid ROI. Julian Morgan, Gallaher’s resources planning manager, describes the firm’s production processes as very complicated, with dependencies and bottlenecks that made end-to-end planning using spreadsheets a nightmare. Briefly, we’re looking at five distinct sub-processes in separate parts of the plant that take blended tobacco and leaf wrappers from raw materials at one end to packed products at the other – with thousands of routes and options according to the materials themselves, the SKU and even its destination. Clearly, getting lines balanced with the best mix of machines is a considerable task for planners – in over-rolling and the other processes. But there’s also the key matter of optimising for the big picture. Until this summer, that was being done on manpower planning spreadsheets. And the result was over-production of some items and stock-outs on others. So 18 months ago, Morgan was tasked with finding a solution – while also tackling the linked but separate issues of longer range demand, capacity and business planning. And after looking at several potential solutions, including SAP’s APO (advanced planner and optimiser), not least because SAP is the corporate choice and APO is working elsewhere in the business, his team opted for Workplace Systems’ WorkPlanner APS. It’s been a resounding success – initially quite easy to set up, but also now easy to run – and as a result it’s also getting attention and interest considerably beyond the original remit. The system takes input from Gallaher’s UK forecast sales, and SAP APO for the export market, and generates a 36 month plan for business guidance, with year one more fixed, and months one and two fixed quota. “It’s spreadsheet-driven, and everyone can understand that. But the power of the APS is in the speed with which it transforms that data into robust, optimised plans,” says Morgan. “We went live last July and we’ve been running planning so far on a monthly basis, generating cost-optimised and capacity-constrained production plans for all the sub-processes as they relate to one another – and reaching out to upstream and downstream. We’ll take that up to weekly planning, but already finished goods stocks have reduced by 20%, and that will go to 35% by the end of this year. WIP reduction has not been as significant yet, but it will improve when we take scheduling weekly.” And there’s more. Planned maintenance is due to be linked into APS, with the objective of getting it away from expensive weekend working and into normal production hours. “The APS system has the freedom to move production up and down across the sub-processes, and to adjust routings and machine utilisation to re-optimise for machines taken out for maintenance,” says Morgan. “Without the system, it would be impossible to calculate effective plans on spreadsheets.” Beyond that, the system is also enabling planners to respond quickly and accurately to ‘what ifs’ around forecast inaccuracy, or new business, new brands, campaigns and the like. “In the last 18 months, we’ve had 30 brand launches into a variety of European markets, where the shape, style and packing of the product have been different. We can now support this kind of development right from the start,” he says.