Smart decisions

"APS [advanced planning and scheduling] hasn't helped us work harder, but it has helped us work a lot smarter. It has benefited the primary area of the business it was intended to, and this has helped benefit the way the company performs as a whole." So says Chris Clarke, operations director at shell and tube heat exchangers manufacturer Wellman Hunt-Graham. That kind of statement is fairly typical – if a little on the conservative side – among manufacturers that have come relatively late to APS, having managed mostly with spreadsheets or planning boards that, in the end, just weren't up to the job. So might your organisation reap those kinds of rewards from APS? And what exactly would installing such a system involve anyway? It's worth checking out those questions, if for no other reason than the fact that Wellman's experience with its Preactor APS translated into very real benefits. Clarke cites, for example, on-time, in-full (OTIF) production delivery stats that improved from less than 50% to 85-90%, following go-live, as well as bottlenecks down by 20% as a result of the system highlighting requirements to subcontract operations. The latter, in turn, resulted in significantly reduced WIP and, no doubt, also clutter on the plant floor. And those raw figures mask improvements that affected not only efficiency on this company's factory floor, but also its customers' experience – as well as helping to avoid some potentially nasty penalty clauses. That's because the system generates not only what needs to be done next for every order across the entire production floor, but also the reasons why and, just as important, the impact of not doing so. In Wellman's case, that can include cost penalties of up to 10% of the order value for failure to deliver products in time for a customer's plant shutdown, which on a multi-million pound order can be very significant. As Clarke puts it: "In this sense, Preactor is very much a management tool for us, because it allows us the flexibility to do what we need to do for our customers. If we do have problems that mean an order might run late, we can see these weeks away and make the necessary decisions about how to respond." We'll return to Wellman Hunt-Graham later, but first let's get some perspective on the importance of APS as viewed by other manufacturing users that are less stuck with the particular challenges of engineer-to-order projects. Interestingly, if Works Management's own online survey is anything to go by, APS has shot up the rankings – from nowhere a few short years ago, to number one or two now. The survey, which ran last September and was aimed at multi-mode manufacturers, sought to find the IT type that had been most useful in improving companies' ability to respond to business opportunities and changes in general – from the supply chain, right through production. Respondents ranked APS as a high achiever, enabling managers to flex operations fast – a position that ERP, CRM (customer relationship management) and even business intelligence (BI) couldn't match. And as a check, we also asked our respondents which systems had generally been critical, during their careers, in improving a manufacturer's ability to maximise business opportunities as they arise. The results in rank order: ERP (58%), APS (50%), production estimating/costing (33%), BI (31%) and CRM (25%). Sixth was forecasting systems (22%), followed by product configurators (19%), then shopfloor data capture (17%), and computer-aided process planning, manufacturing execution systems, WIP tracking, sales and operations planning (S&OP) tools, and project management software, all at 14%. Looked at any way you like, that's a huge vote of confidence for a software package that was originally 'only' developed to get shopfloors working smoothly and OTIF better, by using the concept of finite capacity (specifically considering both materials and resources concurrently). Indeed, these days, manufacturers consistently talk of APS as far more than a factory planning and scheduling solution. That said, there isn't universal agreement. Cosworth's Daren Dowding – a self-confessed fan and user of Preactor APS – warns of situations where APS might be suggested by management "although, in fact, you've got something else wrong in your company". He cites failures with S&OP, where installing APS on its own might well help provide real shopfloor data and 'what-if' information, but isn't the answer to the process problem. And Rod Clarke, an independent manufacturing process consultant, wonders, somewhat facetiously, if the most impressive part of APS is its name. "Would you like an advanced planning and scheduling system or a bog standard one?" he quips. His view: "There are a very small number of cases where APS is essential. Mostly, they're used because companies haven't got other aspects of the business right." Jas Singh, master planner with electronics manufacturer Alps Electric, however, is unequivocal: "UK manufacturing is changing. There are more and more small batch orders and you're looking at time compression to turn orders into cash as fast as possible. That makes scheduling a very complex job. Ten years ago, I was a master scheduler for Ireland, the UK and a Czech plant. Now I struggle to do one site and I'm trialling Preactor this month to get a better solution." Well put, and in general, the APS success stories certainly far outweigh those where companies turned out to be in denial of some other process issue. Kiva Systems, for example, speaks of its relatively new Infor SyteLine ERP system as helping to shorten time to market – and makes specific mention of its forecasting and APS functionality as key to reducing cycle times and bolstering customer service. Richard Thomley, finance director of the company, which produces warehouse automation robots, says the main goal of its whole system was to help manage production operations, including planning and scheduling, inventory management, production control and order management. "Infor ERP SyteLine [was] the ideal solution for us, because its flexibility and robust functionality enable us to plan production… without excess inventory and cost." Control and visibility Similarly, German ski manufacturer Völkl, which was the first to go live with IFS's new Advanced Planning Board software, recently reported "unprecedented control". Völkl IT manager Gerold Fath describes his new dashboard tool as "giving excellent visibility and control over resource allocation via a graphical representation of shopfloor operations". Putting meat on those bones, Franz Ederer, production planning manager at Völkl, explains that the company needed a single view of its planning processes to help it "make accurate decisions on our capacity to deliver on existing orders, as well as take on new business". Implementing APS, says Ederer, "has given our project managers greater visibility into project status and helps them plan for disruptions – meaning they can realign and adapt their strategy quickly and maximize productivity". And it's not just that. As Fath puts it: "All incoming orders are now coordinated with the sales and purchasing departments to enable simultaneous planning and rescheduling, to make sure the end product is always delivered on time." Then again, Knutsford-based process control valves specialist Oliver Valves, which also completed implementation recently of an Infor ERP Syteline 8 system, reports "a revelation" when it went live, because of the sheer power of its APS. IT manager Kevin White explains that, whereas with MRP, changes such as supplier delays had been very difficult to accommodate, with APS, "if it finds inadequate capacity or lead time to manufacture for the due date, it says you can't have it then, but you can have it on this date. So now, our sales people can go back to the customer with real information." But the system doesn't just find problems and sort them. Says White: "When customers order existing product, the salesperson now just puts the order on the system, hits 'capable to promise' and APS tells him when he can have it. In the past that would have taken at least a day, because our ranges are modular and we have so many common parts. Going through all of those and looking at demand usage would have been more or less impossible, so we just quoted standard lead times. Now we might say, 'you can have it tomorrow', because for many of our relatively standard products, assembling them across the factory floor is very fast." Bear in mind that for a company like Oliver Valves, which offers thousands of permutations and relies on outsourced services for much of its specialist manufactured components, none of the above is trivial. Also bear in mind that, when the new system promises a due date, it does so without robbing Peter to pay Paul. And, if Peter does need to be robbed, the system knows and provides management with the information they need. For White, the only caveat with APS – as with any new system – is your people. "For us, the initial issue was with our production control and purchasing guys. They'd been with us for a long time, so bringing them around was a little difficult. The way to get around it, though, is to get everyone involved in the implementation. We had 18 people on the team, with champions from each area responsible for the procedural work, training, etc." Returning to Wellman Hunt-Graham's experience, however, expands on exactly how and why APS is working so well there. Clarke explains that, in his company's case, it was important to keep production data outside Preactor so that it remained accessible to management wanting to view progress, for example. As a result, Preactor was configured to schedule what needs to be done next and where, with this data then exported back into the master production spreadsheet. Says Clarke: "RMS [the Preactor implementation partner] provided us with the Preactor framework and left us with full control over the development of the spreadsheets and associated reports. Because of this, we have a system we can tailor very quickly, and one we implemented in a matter of weeks." That also resulted in quick returns – even though at first they appeared to be anything but. With the new system live, he says, the scale of inaccuracy and optimism of the old system became immediately apparent. "For the first time ever, we could actually see where the company was, as well as the real progress of each order," recalls Clarke. "This was a real eye opener. For example, Preactor flagged up orders which, according to the old system, were progressing on time, but that in reality were weeks late. The initial response within the company was disbelief." Yet, time and time again, he says, the information coming out of the APS system proved itself correct. So much so that, since implementing Preactor, Wellman has now added a shopfloor data collection system that records the start and finish times of operations, and feeds the data back into Wellman's bespoke estimating package. That, in turn, is now generating shorter and more accurate lead time estimates for customers, so strengthening the company's position in the market. What's more, the company is currently investigating using Preactor to take over planning in its testing area and to schedule the design department.