Why is APS more critical today than a decade ago?
APS solutions have become more sought after by industries in recent years compared to the early 2000s. This isn't just about the natural commercial growth a product experiences as it consolidates itself in the market. We could even say that this type of growth is hampered by the decline in the expressiveness of Brazilian industry in recent decades and the consequent shrinking of this consumer market. It's more than that. Perhaps the most significant factor in this regard is the increased volatility of the supply chain caused both by extraordinary events, such as the pandemic, and by the more globalized profile of the market, with greater interdependence among economic actors. This means that a small fluctuation in one direction can generate a large wave at other levels of the supply chain . Despite collaborative initiatives such as CPFR or technologies that provide visibility throughout the chain, the bullwhip effect is a harsh reality. In other words, this is not an isolated case due to the pandemic. We are talking about a basic law of physics applied to the market. A system that grows and heats up over the long term brings with it this entropic characteristic of greater disorder and randomness. And this increased entropy causes headaches for those who need to plan their production and inventory. Oh, it does! As if that weren't enough, we also see a substantial increase in the volume of SKUs that industries have active, mass customization strategies, as well as the reduction of product life cycles (see fast fashion in the fashion industry and the increasingly frequent launches in technology, just to give easy examples). This means that one characteristic of the industry is increasingly proving to be a competitive differentiator: agility . And here we have a term that is difficult to measure financially. A businessman cannot compare, on equal terms, the attractiveness of an investment in machinery with an investment in agility. However, at the mes time, we know that it generates a better level of service and a reduction in lead time which improves the company's cash-to-cash cycle (the difference between the cash outflow for purchasing raw materials and the inflow of revenue from customers), as we will reach our customers faster and likely receive payment sooner. Being more punctual and delivering faster than the competition may not be reflected in the company's income statement, but it is a competitive advantage in most industries. Advanced Planning & Scheduling ( ) solutions were designed not only to create efficient plans (reducing setups and waiting times), but also to update them mes reschedule quickly in the face of changes, identifying the impacts throughout production processes, over a future horizon that may be mes . These changes can be in supply , production , or demand . In terms of supply, our suppliers may not meet their delivery deadlines or deliver insufficient volumes mes material . Production can also experience problems such as rhythm variations, labor shortages, maintenance, and several other factors. Finally, demand can also fluctuate significantly. It's quite common for a PPC to receive an urgent demand from the sales department and make short-term changes to the production plan, but without identifying the real medium-term impacts of these modifications on other products and processes. Therefore, at the end of the month, targets are not met, and the reason is unknown because the PPC failed to establish the causal relationship between events when there was still time, and now it's too late. A robust APS solution will allow you to identify this causality and quickly decide what to do by simulating and comparing scenarios. While good demand planning can reduce surprises and bring more stability, on the other hand, we have a stark truth: unpredictable events and products (items with low forecastability ) will occur and, in many cases, will increase. As Mike Tyson said: "Everyone has a plan, until they get punched in the face." A good fighter is one who reacts quickly with a new plan, before getting knocked out.
And how can neo help your industry?
NEO Engenharia de Produção is a Siemens Smart Expert Partner and offers solutions that include business analysis and APS software . We've created a new concept that values cutting-edge technology and technical excellence, while mes believing in human sensitivity, creative work, and personalized, committed relationships. Contact us using the form below or via WhatsApp to learn more about our solutions and schedule a personalized analysis tailored to your business needs. Schedule your production with experts in technological solutions.