14 September 2011

Sense and sensitivity

With the importance of responsive supply chains now well established as key to demand-driven production, enlightened manufacturers are turning to advanced planning and scheduling systems to bring complexity to heel. Brian Tinham reports

There are few surprises left to come from IT systems, at least in terms of managers' perceptions of their ability to seriously change business processes. Or so you might be forgiven for thinking. After all, ERP systems – and earlier versions with similar intent, if not scope – have been around for decades. So the potential for business transformation that came out of MRP II-style automation, business-wide integration across departments and functions, as well as once-only data entry, consistent and timely information, are very, very well known.

Yet, whether it's due to industry hype and the resulting entirely understandable scepticism or just inadequately explained functionality and scope, there remain certain applications with a very real capacity to amaze. Probably two of the best examples are advanced planning and scheduling (APS) and business intelligence (BI), both of which time and again prompt that 'wow' moment, even among seasoned manufacturing managers who would say they've been there and got the t-shirt to prove it.

Take Aunt Bessie's, which produces a staggering 20 million Yorkshire puddings per week at its Hull plant, as well as a wide range of frozen and fresh sweet and savoury products in a variety of sizes, for all the major food multiples. Following implementation of QAD ERP tightly integrated with a Preactor APS system, supply planning manager Chris Buckle exclaims: "Without Preactor, the questions we are now asking might never have been asked, because we just wouldn't have been aware of the possibility of improvements… The system is already helping to drive process change [around] how we best run our production lines."

And he continues: "The increased visibility from Preactor has also helped us to respond quicker, especially when we have a problem on a line. Beforehand, it could take a day for us even to notice, and then additional time to work out how best to react. Now we can see much more quickly when a problem is occurring and investigate different scenarios for dealing with it."

What's more, Buckle indicates that Aunt Bessie's can now immediately amend the stock it does or doesn't need to move into its short-term holding area, so minimising costs and optimising space in that critical part of the factory. "Better visibility of stock by product group also helps with capacity planning, which helps bring further storage efficiency cost savings," he adds.

Pretty persuasive stuff, and clearly a step change in flexibility and responsiveness that's bringing some expected but also some entirely unexpected and substantial financial improvements. Notably, Buckle states that one of the most significant benefits is the unpredicted change in attitude towards the nature of planning itself that has come since the introduction of APS.

"Now we are focused not on 'can we make it' but 'how can we make it better'," he explains. "The emphasis previously was on satisfying orders, whereas now we can not only see the associated costs at each stage of the plan, but also take these into account when deciding what to do. This helps go a long way towards achieving our requirement to balance inventory management with production efficiency."

Furthermore, for Aunt Bessie's, introducing APS has not only been the catalyst, but also the lynchpin for bringing maintenance and operations together like never before. For the first time, planned maintenance is being taken into consideration when developing production plans, in terms of detailed capacity and resource availability. As Buckle says, not only does that provide an indication of the factory's real, rather than theoretical, capabilities, both short and long term, but also it avoids the nightmare of allocating work to a line, which then has to be unallocated at short notice – with all the associated cost and logistics implications we all know so well.

Aunt Bessie's is far, far from alone. Others that have recently reported transformations since installing APS systems include: Czech metal, plastics and fibreglass manufacturer Variel, which went for an Infor ERP SyteLine-based APS system to improve productivity and process efficiency, and to streamline its manufacturing; engineered structural metal components and assemblies manufacturer Tower Automotive's Malacky plant, which chose QAD ERP and Preactor, and now talks of spectacular improvements; and fencing specialist Zaun, which chose Uplanit from Pinnula for its 'artificial intelligence' approach to optimising work orders throughout manufacturing.

Then again, Bolton-based medical products manufacturer Vernagroup, which selected Production Modelling's Orchestrate software, says that within six weeks of going live, it was "staggered" by the capability of the software. Czech elevator safety equipment manufacturer Memco, which upgraded to Infor ERP SyteLine v8.0 from v6.0, cites its APS capability as increasing production forecast accuracy and supporting process and information consistency. And precision valves and plastic sealing components manufacturer Hoerbiger credits its Preactor APS and Factory Viewer manufacturing execution system (MES) with improving the prioritisation and sequencing of jobs, leading directly to an increase in productivity of more than 20% without increases in human or plant resources.
Modernising planning Vernagroup and Hoerbiger provide two very different examples of why APS can work surprisingly well. Steve Brownlee, IT director at the former, explains that, prior to APS, his company's production facilities were state of the art, with patented technology and robotics. "But our planning systems were cumbersome and unwieldy, relying heavily on spreadsheets and burning a lot of midnight oil," he quips. And hence the decision to "computerise the process", using what he describes as "a proven, out-of-the-box system that was cost effective, easy to implement, easy to use and not requiring lots of IT support".

Orchestrate software was selected, says Brownlee, because it matched that brief and because its intuitive user interface "makes it so much easier to assess different planning scenarios". Since then, he has been amazed by "the capability of the software to deal with our complexity, and also how rapidly the team from Production Modelling could configure the system". Indeed, he reports that a demonstration system was developed for Vernagroup's production processes within two weeks.

"We went from signing off a purchase order to delivering a fully functional solution that delivers absolute benefits in only six weeks," he says, "and that in a situation where we spent around one third of the cost of the nearest rival solution." Brownlee says Vernagroup is now using Orchestrate for both strategic and day-to-day capacity planning. "Looking two, three, four years ahead, we can assess capacity, any potential restrictions, storage requirements and any demand for additional production capability. We are [also] able to plan weekly and day-to-day production, to meet sales forecasts and maintain appropriate stock levels."

And that includes automatically managing constraints, such as specific products dedicated to certain production lines, with others handling mixed products, and all the while minimising changeovers. "Orchestrate allows us to manage and police which products run on which lines and for how long, so maximising efficiency and throughput," says Brownlee.

"What used to take a whole day for a planner can now be accomplished in 20 minutes. That doesn't just mean eliminating the hassle; it means we can afford to run alternative scenarios, knowing that built-in KPI alerts will keep us on track," he adds.

Meanwhile, Hoerbiger is also interesting, not least because the company first successfully installed Preactor APS back in March 2008 as a pilot project to resolve serious late-running issues on one of its production cells – before then uninstalling it when management decided on a wholesale shift to manually-based lean manufacturing. Paul Mittendorff, Hoerbiger's director of manufacturing systems, explains that production within the offending cell had been running with an average late list report close to 30 pages long. Three months after implementing the prototype Preactor APS and Factory Viewer MES, the cell's late list had fallen to zero. But then came the edict from on high.

Unfortunately, Hoerbiger's complexities and massive product range – 228,000 line items, some dating back decades and reliant on old, hand-drawn specifications – were never going to gel with manual lean. "We don't make large runs of the same widget, or small ranges of widgets every day. We are a very flexible high-mix, low volume manufacturer that needs much quicker response times, high flexibility, and better visibility than manual lean techniques can provide," states Mittendorff.

"We moved to a pull system, trying to fix eight-hour buckets of work across the plant. But eight hours of saw operation time do not correspond to eight hours of lathe time or eight hours of milling time. Not only did we end up with huge bottlenecks and resources standing idle, [but] components were not being made in the right sequence, so they were not being completed when expected and required. If you need 400 components available on the same day to assemble and ship to the customer, having 99% on time is a failure."

One year later, and following another change of heart at the company, Mittendorff was able to revisit the Preactor and Factory Viewer approach, but expanded plant wide and tightly integrated with SAP. "We now use SAP to do high level MRP scheduling," he says. "SAP manages our parts demands and gives us windows of production time when we expect a part to be started and completed. Each part's production is then optimally scheduled within Preactor, which [applies] machine routing rules, parts prioritisation, and set-up sequencing for efficiency gains. Factory Viewer closes the loop by providing real-time data acquisition, order visibility and feedback to Preactor, to allow for schedule changes necessitated by events on the factory floor."

Hoerbiger, says Mittendorff, now has complete, real-time visibility of what order is where, and whether the schedule is in line with demand. "In addition to that information, Preactor and Factory Viewer also give us options. We can see very clearly how a product mix affects our capacity and we can make short- and long-term decisions to stretch our capacity in areas that will yield the best results, in terms of being on time for our customers… Our business relies on getting 100% of our production right, 100% of the time. With Preactor and Factory Viewer, this is realistic and achievable."

S&OP goes real time
For Shaun Philips, global product manager for supply chain planning solutions with manufacturing ERP software conglomerate Infor, one unsung aspect of advanced planning and scheduling (APS) systems is their ability to close the loop on S&OP (sales and operations planning), and so make supply chains slick, efficient and responsive. He makes the point that most manufacturers, in both the process and discrete industries, still generate plans with a 12-month horizon and provide schedules for the next six to eight weeks – but then leave them and get on with fighting fires in the real world.

Philips recalls one recent customer running a master production schedule for technical planning, and producing a detailed schedule from that – but then being unaware of problems as they arose in production, until receiving calls from suppliers wondering why they couldn't make JIT deliveries to the docks.

"Now they have real-time production feeds off the lines that tell the warehouse what to expect, inform ERP what has been made so that it can backflush materials consumed, and provide real-time trend and event data for the scheduler," he says. "That means APS can reschedule in real time – push and pull things out – while also keeping S&OP live by revealing potential problems, in terms of resources such as labour capacity in, say, two days' time."

Extend that thinking to supply chains issuing advance shipping notes and the point, he explains, is that not only is inventory management elevated from guesswork to reality at every node, but also, again, planning and scheduling become responsive, with APS either adapting automatically, following business rules, or acting in an advisory capacity – but always ensuring that managers focus on the exceptions to the plan that matter.

Brian Tinham

Supporting Information

Infor (United Kingdom) Ltd
Preactor International Ltd
Production Modelling Ltd
QAD Europe Ltd

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