Why invest in the APS solution?
Just like any decision you make in your personal life, an APS Solution also needs a reason to exist. Implementing software requires significant effort, so motivation is needed to overcome inertia. Depending on the area and position of the applicant—whether in pipes and fittings , plastic packaging , food , or similar fields—we see distinct motivations that nevertheless converge on the ultimate goal of organizations: greater profitability.
COST REDUCTION AND INCREASE IN REVENUE
From the perspective of executive positions in industries, cost reduction and revenue increase are the main motivators in the search for an APS (Advanced . Some directors have a very keen eye for identifying the importance of production planning and its challenges, becoming the forerunners of these initiatives in company . However, this is not a common reality, given that these positions tend to accumulate many functions and concerns from various areas, making it difficult for them to act proactively in the search for final solutions to problems. Generally in line with the board of directors is management, which needs to find ways to achieve the final objectives of the business. The challenges for management linked to the areas of Supply Chain, Industrial and even IT range from service level, with delays in deliveries and stockouts, to issues of productive efficiency, impacted by long setup and waiting times, as well as long lead mes and high inventories, both in process and of raw materials and finished products. In all these areas, company always experience losses (some more than others in each area), and many see opportunities to reduce them through better production planning and scheduling. However, the most common initiative comes from those who experience firsthand the usual limitations we've seen so far: analysts and coordinators in the PPC Control) areas. For them, the time spent scheduling and, especially, rescheduling, is very high, and they are rarely satisfied with the results achieved, since they are able to see the losses and understand the excessive simplifications in their processes and systems. In practice, they are also held accountable for all the objectives set by their superiors and are often "with their hands tied."
Stakeholder Objectives[/caption]It only takes a little reflection to understand that defining what, when, and how to produce (the function of PPC , one of the areas of the Supply Chain) influences the results of the motivations mentioned above. The limitations of traditional MRP/MRPII solutions show us that there are a series of gaps that can be filled to improve these processes. But now, how does APS generate results to meet these objectives? Well, we will see below that the gains reach several areas, influencing each other. We will address the gains in improving the Planning processes and then the Scheduling processes, in order to make the approaches clearer.
Gains through better production planning
At the planning level, clearly defining what to produce each period, as well as what cannot be produced due to insufficient capacity, avoids overstocking and stockouts. A lack of detailed capacity analysis leads to excess inventory on one side and cuts on the other. In other words, high inventory levels of some products and shortages of others. APS (Advanced Production Planning) considers this capacity, resulting in healthier inventory and consequently reducing storage costs and lost sales (the latter often immeasurable). Furthermore, medium- and long-term capacity adjustments can be made to reduce the costs necessary to meet a given demand. A 20% increase in demand does not necessarily mean a need for 20% more capacity. Understanding demand and capacity behavior over time, through external factors such as seasonality and changes in product mix, as well as internal factors such as holidays, shifts, or changes in production processes, can alter decision-making regarding, for example, the purchase of a machine that may cost millions of reais and will remain idle, or making an undersized acquisition that will not meet demand. In other words, both cost reduction and improved delivery performance can result from better planning, one that properly assesses capacity.
GAINS THROUGH BETTER PRODUCTION SCHEDULING
At the scheduling level, the reduction in setup and waiting times, achieved through advanced scheduling rules, provides increased productivity (see the Bartira and Credeal cases as examples), as well as reduced production lead mes - in-process inventory, resulting from better synchronization between operations (see the Lunelli case as an example). This reduction in lead time, in turn, impacts finished goods inventory levels (see the Tigre case Tigre an example). In general, a 30% reduction in lead time can indicate a 15% to 22% reduction in safety stock levels, for example, depending on the inventory policy methodology used. And it makes sense: if we can replenish inventory more quickly, the need for large volumes mes it mes . Production scheduling via APS also provides visibility into what is planned to be produced over a horizon that can range from weeks to several mes with considerable accuracy. This allows us to see not only which Production Orders are currently delayed, but also those that are projected to be delayed over the future, making it possible to react proactively to minimize or even eliminate such delays. Furthermore, production sequencing allows us to know when an operation should start, and consequently when its raw materials need to be available. Unlike what an MRP/MRII assumes, production lead mes are not always fixed and equal; therefore, knowing the actual dates of raw material needs allows for an improvement in the purchasing process so that replenishments occur as close as possible to the production needs, thus improving the company company cash flow .
APS Gains Linked to Lean Losses
In summary, if we refer to a classic concept in Production Engineering such as the 7 wastes of Lean Manufacturing, APS helps to reduce and eliminate 5 of them, and in a very significant way. These are:
- Overproduction;
- Stocks;
- Transport;
- Processing;
- Wait.
Finally, we note that considering finite capacity and synchronization between processes generates much more assertive scenarios, which in turn provide more informed and secure decision-making, leading to better results for the industry.
NEO PRODUCTION ENGINEERING
Do you want to know how to measure these gains and loss reductions to understand how an APS project brings financial returns to your company ? Keep an eye on the NEO Blog , as we will be discussing this further. You can also subscribe to our newsletter and receive relevant content by email. Contact us so we can evaluate your case. [noptin-form id=2822]