supply chain

Supply Chain Case Study: the Definitive Guide

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Professionals in supply chain management use various methods to identify best practices to improve the operations. Analysis of case study is certainly one of the most popular methods for people from business management background. In order to accelerate the learning, this article has gathered 30 most sought-after supply chain case studies, analyzed/categorized them by industry and the findings are presented. – See more at: http://www.supplychainopz.com/2014/06/supply-chain-case-study.html.

Advanced Planning and Scheduling (APS)

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Purpose

Advanced Planning and Scheduling Systems (APS) increase the efficiency in the supply chain by improving the reaction speed and stable solutions (less exceptional situations) in comparison to traditional ERP systems.

What is APS?

Advanced Planning systems rely on data from the transactional Enterprise Resource Planning (ERP) and Production Planning (PPS) systems and use algorithms and (Meta) heuristics, to generate in comparison to the ERP planning, better solutions.

In contrast to conventional MRP systems which successively plan calculated, APS systems calculate material and capacity simultaneously and in real time, whereby in general, the admissibility in terms of capacity or dates of a plan is preserved. In case individual restrictions can not be adhered, the injury violation is indicated.

Benefits of APS

Classical ERP-Systems

  • Material requirements and capacity planning is an iterative Process (MRP II)
  • Plans must be made ​​feasible by manual interventions
  • Focus is factory internally or in-house
  • No optimization functionality
  • Data storage exclusively in database, access is transaction-oriented
  • Hardly any support from simulation programs

Advanced Planning Systems

  • Material and capacity planning are integrated in a simultaneous process
  • Generates feasible plans (finite capacity and material availability)
  • Provides modules for plant- and enterprise-wide planning
  • Provides process optimization and complex heuristics for planning
  • Use of main memory-based data models
  • Provides simulation capabilities (“What-if” analysis)
  • Allows bottleneck-oriented planning
  • Integrating different levels of aggregation and time horizons

Objectives

APS systems have as aim to increase the performance of the supply chain (SC), by:

  • Reduction of exceptional situations, because these have the greatest impact on the performance.
  • Demand Planning and Master Planning anticipate fluctuating markets at an early stage, so that the SC can react in time
  • Analogous if problems on the supply side or capacity appear
  • Provides fast and optimal response to emergency situations.
  • Advance planning reduces exceptions in advance.

Conditions

APS requires

  • Base systems such as ERP or PPS, which continue to manage the master data and order data,
  • High quality data in the base system,
  • Properly defined simulation models as a simplified representation of reality which is essential for the Planning results,
  • The integration of the planning processes into the operational IT and Business landscape,
  • A flexible adaptation of the framework (locations, product structure, cost structure) and
  • Employees trained in the software.

To be able to take advantage of all the possibilities of APS, all the ERP systems of the companies involved are connected to the APS system (large number of interfaces and costs) and transfer the inventory and cost data.

Procedure

Implementing APS at SMB’s with one or a few locations is the exception to the rule, because the introduction of APS has proved in practice to be very complex and costly and therefore mainly large companies use it to master the complexity. For SME’s, if at all, only individualized solutions for individual modules from the APS-scope are considered. The starting point is a known weakness in the current software or system, which leads to low capacity utilization, poor results for route planning, etc. Corresponding modules contain the data from the ERP system and run the optimization procedure on an external computer (also standalone computer). The result is then transferred back into the ERP system via a technical interface.

Characteristics

  • APS are no stand-alone systems, as it generates the desired benefits only in combination with the data base of ERP systems
  • Advanced planning and mathematical optimization algorithms should provide improved planning results
  • Allows bottleneck-oriented planning and uses simultaneous planning.
  • Multi-site planning is possible.
  • High implementation costs and further functions require rather large companies for the use of classical APS systems, which hold a significant role in the Supply Chain due to their dominance.

Implementation Notes

Above all the introduction of APS systems requires plenty of time and money, as all processes must be mapped and reviewed, data interfaces needs to be prepared, supplemented records checked, etc.

Relation to other modules

  • Vendor Managemed Inventory (VMI)
  • ERP
  • Milk Run