Enterprise Resource Planning (ERP) and Advanced Planning and Scheduling (APS) systems have improved the integration of materials and capacity planning by use of constraint-based planning and optimisation.
Many ERP and APS systems make it possible to include supplier and customer in the planning procedure and thereby optimise a whole supply chain on a real-time basis.
Instead of an ERP system that focuses on each individual link in the chain, an APS system acts like an umbrella, enabling to extract real-time information from that chain, to calculate a feasible schedule, resulting in a fast, reliable response to the customer.
What is APS?
APS is an enterprise and inter-enterprise planning system.
It utilises planning and scheduling techniques that consider a wide range of constraints to produce an optimised plan.
It optimises the plan, based on mathematical modeling techniques.
It determines a feasible plan that considers all demand needs and supply limitations.
It uses intelligent analytical tools to perform finite scheduling and produces a realistic plan.
What is APS? (Contd.)
It is an integrated system that can support shifting decisions in supply chain management.
It analyses the implications of alternative decisions, highlights problems & consequences, and schedules for transfer to execution tools.
It recommends a best overall solution that considers both material and resource availability.
Real time decision support & KPI support
Facilitate What If, ATP, CTP, PTP, Bucketless planning
Planning options, APS looks at..
Concurrent planning (or unconstrained planning)
Optimisation - Linear Programming, Genetic Programming, Theory of constraints, Heuristics
5M Constraints, APS looks at..
Material – availability, safety stock levels
Machine - set-up, sequence, capacity
Man - labour capacity, competence
Money – Cost
Methods - distribution requirements, customer service level requirements (due dates)
APS uses Finite Scheduling
Finite scheduling is a process that assumes a fixed maximum capacity.
It sequences jobs according to actual constraints (5M) the company faces.
It creates more realistic forecasts than infinite scheduling methods.
Improve the accuracy of the production process.
Performs multiple data passes to optimize plans and schedules.
Planning & Scheduling
What can APS do?
Compare supply chain performance to increase accuracy
Operate in real-time
Improve customer delivery times
Increase utilization of resources
Enhance efficiency of asset deployment
Resolve problems with ERP systems
Improves MRP processes
Employs more advanced technologies
How does APS system work?
Follow a four part model
Utilize company specific constraints
Employ advanced mathematical technologies
AMR’s – APS - Four Part Model ~ Created by Advanced Manufacturing Research, Inc.
Constraints Considered by APS
Limitations – eg. machine capacity, labor skills, and material requirements
Rules – eg. manufacturing policies enforced by the company that, have an impact on production
Objectives – eg. increase customer satisfaction, which could require that the company shorten lead times or improve delivery procedures
Mathematical utilised by APS
Constraint based programming (CBP)
SCM Collaboration Demand Forecasting Optimizing product mix Capacity Planning Resource Planning Shop Floor Control Warehousing Management Ordering Administration Production Planning Demand Management Shipping Optimization Status Management Tactical Tactical Operational Operational Transcctional Transcctional Collaboration on Forecasting Collaboration on Capacity Planning Analyzing Supply Chain Collaboration on Resource Planning Inventory Tracking Inventory Planning Analyzing Supply Chain Shippment Tracking Order & Shipments Collaboration on Forecasting Matching demand -supply
Solution Provided by APS
Strategic and long-term planning
products to be made,
markets to pursue,
resolving conflicting goals,
ROI on asset deployment
Supply chain network design
Optimises the use of resources across the network of suppliers, customers, manufacturing locations and DCs.
What-if analyses can be performed to test the impact of decisions to open new or move existing facilities on profit and customer-service level.
To determine where a new facility should be located to fulfil customer demand in the most optimal way.
To find the balance between holding more stock at a specific location or making more transportation costs.
APS Solution (Contd)
Demand planning and forecasting
Both statistical and time-series used to calculate a forecast based on sales history.
Based on this forecast, you can create more demand through promotions in periods where the demand is less than maximum production.
Sales and operations planning
Use manufacturing planning and/or a supply chain network optimising solution to determine if the forecast demand can be met.
Determines the optimal levels of safety stock at each locations of finished goods inventory to achieve the desired customer service levels.
Supply chain planning (SCP)
Compares the forecast with actual demand to develop a multi-plant constrained master schedule, based on aggregate-level resources and critical materials.
Optimise the use of manufacturing, distribution and transportation resources.
APS Solution (Contd)
Develops a constrained master schedule for a single plant based on material availability, plant capacity and other business objectives.
Based on actual transportation costs and material allocation requirements a feasible plan on the distribution of finished goods inventory to different stocking point or customers, is generated to meet forecast and actual demand including Vendor Managed Inventory.
Uses current freight rates to minimise shipping costs
Optimises outbound and inbound material flow to minimise transportation costs or to maximise the utilisation of the truck fleet.
Consolidates shipments into full truckloads and optimises transportation routes by sequencing the delivery / pickup locations.
APS Solution (Contd)
Based on detailed product attributes, work centre capabilities and material flow, a schedule is determined that optimises the sequence and routings of production orders on the shop floor.
Determines a feasible shipment schedule to meet customer due dates.
Determines the optimal method and time to ship the order taking customer due dates into account.
APS Solution / Time Horizon APS solutions related to the time horizon (Bermudez, 1998)
Define goals and objectives
Define reasons for buying APS system
Select software that matches the needs of your company
Sound understanding of Supply chain management concepts and application
Experience along with roles & responsibilities
Benefits gained from APS
Improved throughput times
Improved delivery times
Optimum inventory levels
Better utilisation rates
Improved customer service levels
Reductions in costs
Improved sequencing for set-up efficiency
APS – Resources / Reference
Alvord, Charles H. “The S in APS.” IIE Solutions. Vol. 31(10). Oct 1999: 38-41.
Amstel, P. van (1998), Snel, sneller, snelst, APS-systeem schiet logistiek manager te hulp, Tijdschrift voor Inkoop & Logistiek, 5, 18-23.
Ashkenas, R. (1995), The boundaryless organization, Breaking the chains of organizational structure. Jossey-Bass, San Fransisco.
Bendiner, J. (1998), Understanding Supply Chain Optimization: From “Wat if”to What’s best, APICS The Performance advantage, 1.
Bermudez, J. (1998), Advanced Planning and Scheduling: Is it as good as it sounds? The report on Supply Chain Management, March, 3-18.
Bermudez, J. (1999), Advanced Planning and Scheduling Systems: Just a fad or a breakthrough in manufacturing and Supply Chain Management?, The report on manufacturing, December, 16-19.
Bermudez, John. “APS: Just a Fad or a Breakthrough in Manufacturing and Supply Chain Management?” The Report on Manufacturing. Advanced Manufacturing Research, Inc., 1996.
Boorsma, M. & Noord, J. Van (1992), Ketenintegratie, Tijdschrift voor inkoop en logistiek, 6, 40-48.
Carol, A. (1999), ERP Tools, Techniques and Applications for Integrating the Supply Chain, USA.