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Finite Capacity Scheduling Software As a Strategic Weapon

What Problem are We Trying to Solve?

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What Problem are We Trying to Solve?

“What problem are we trying to solve?”  This is the first question you should ask yourself, if you are thinking of evaluating production scheduling software or Advanced Planning and Scheduling software.

Why?  The standard and easy answer is that every project that requires even the smallest amount of company resources should have a clearly stated objective.  Without an objective, you run the risk of chasing your tail.  Without an objective, you run the risk of not getting management support.  Worse still, without an objective you run the risk of automating business processes that just don’t make sense.

In our opinion, “We want to schedule our production better” doesn’t cut it.  It is precisely the kind of project objective that risks wasting time and money. Advanced Planning and Scheduling software is a transformative technology that has the potential to truly change the way you do business.  If you just graft APS software onto existing production scheduling procedures, you could really be selling yourself short.

Advanced Planning and Scheduling software does much more than just schedule your production.  Prior to being able to schedule production, a model of your operation must be built in the software.  This model can provide unparalleled visibility into your operation.  You can use the model to make better management decisions that significantly improve profitability.  But how the model is structured needs to be influenced by what you hope to accomplish – it’s common sense.

Business improvement projects do one of three things.  They either increase sales, decrease costs, or reduce assets employed.  In the case of better production scheduling, sales are increased through improving on time deliver, reducing lead times, and providing better information in general to customers.  Costs are decreased through more efficient operations.  Total assets employed are reduced through cutting inventory or hard production assets.

Your production scheduling software project should target one or more of the three objectives above.  Your method for achieving those objectives will drive how your scheduling model is built, how you interact with your production scheduling software vendor or vendors, and what software you decide to purchase.  It will also drive how you justify the project and receive sanctioning from management.

Focus on the real problems in your business.  Align your goals with solving these problems.  Don’t sell yourself or your company short.

Can’t We Develop Our Own Planning and Scheduling Software (Part 1)

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Can’t We Develop Our Own Planning and Scheduling Software (Part 1)

“We are thinking of developing our own planning and scheduling software”. Over the years we’ve heard a lot of prospective customers make this statement. Does it make sense? Sometimes yes, and sometimes no. It all gets back to what you want to accomplish.

The primary benefits of advanced planning and scheduling software are better decisions that improve customer service and sales, cut costs, or reduce assets employed. These better decisions come from the visibility provided by an accurate, predictive model. The visibility helps you make better decisions today (about the sequence on machines and how you use manpower, material and other resources), that meet the needs of your customers and avoid problems in the future.

You may primarily care about a “line up” for your machines or people for a few shifts that doesn’t consider the future. If this is the case, yes you can develop your own production scheduling tool. Excel might work fine. We’ve encountered some pretty neat spreadsheets written by practitioners.

Typically, however, the benefits of scheduling better for a few shifts are not great. As you go further out on the time horizon, or start trying to schedule more resources, even the limited benefits of an Excel based approach become harder to get. An infinite, spreadsheet based approach is just too time consuming to manage effectively.

The real benefits come when you extend your planning and scheduling horizon. This visibility into the future allows you to make the right decisions today that keep you from getting into big trouble in the future.

If you want this kind of benefit, you need software that schedules finitely and considers real world constraints. The software must simultaneously handle all of the relevant constraints in your business, be they machine, people, tooling, material, or other constraints. The software must generate schedules rapidly and take the burden off the user. It must, however, allow the user to easily interact with the software, and add his or her expertise to the scheduling process.

Can’t We Develop Our Own Planning and Scheduling Software? (Part 2)

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Can’t We Develop Our Own Planning and Scheduling Software? (Part 2)

In our previous post, we talked about how Excel might be fine for scheduling for a few shifts.  However, the real benefit of production scheduling software / advanced planning and scheduling software comes from considering multiple simultaneous constraints while scheduling out on the time horizon.

Can your organization develop such software? Maybe, but your programmers better be talented and dedicated, you better have a lot of time to spend with them, and you better not make decisions that lock you into an inappropriate programming or operating system environment.

Production scheduling software and advanced planning and scheduling software is highly specialized.  Vendors of this class of software have spent years perfecting their products.  Developing such software requires not just good programmers, but also people who really understand and can communicate how manufacturing works.

Think about how many planning and scheduling vendors you can name.  Are any of them household names?  In markets that are easy to enter, you’d expect to see two states, depending upon where the market is in its development.  Early in the market’s development, you’d see a lot of competitors because barriers to entry are low.  Later in the market’s development, you’d see one or two big companies that have developed economies of scale and have pushed out smaller competitors.

If you look at the planning and scheduling software market, which is a couple of decades old, you’d see neither of the two states above.  The market consists of more than a few relatively small vendors.  A market with this kind of competitive structure is characteristic of high barriers to entry, and indicates that much specialized expertise and software is required.

Think about the situation another way.  In your environment, list all the different factors that influence when job can start and finish.  If multiple jobs can start at the same time, list all the factors that determine the order in which they should be scheduled. If you are not sure of the order, ask others in your company for help.  Once you have grasped all the factors, start trying to write logic to determine where and when jobs should be scheduled.  My guess is you you’ll discover it is a difficult task.

Even if you can develop the necessary logic, you’d have to spend a lot of time getting this specialized knowledge out of your head (or the heads of others in your company) and into the heads of your programmers.  Don’t underestimate the difficulty of this task.

So, can you write your own production scheduling / advanced planning and scheduling software?  Sure, but you’d better have a lot of expertise, a lot of money, a lot of time, and a strong stomach for risk.  What are you willing to bet on your success?

My New ERP System has Production Planning and Production Scheduling Capability. Why Should I Need Anything Else? (Part 1)

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My New ERP System has Production Planning and Production Scheduling Capability. Why Should I Need Anything Else? (Part 1)

You have just bought, or are planning to soon buy a new, state of the art ERP system. Congratulations! It should be able to do everything that you might need, right? Particularly in the area of production planning and production scheduling, right? Depending upon what you are hoping to achieve, maybe.

The classical MRP / ERP planning paradigm consists of backward scheduling work orders through the various levels of the bill of material. Each work order operation has an associated load and lead time. Capacity planning modules spread the load over the lead time, helping you spot imbalances between hours of available capacity and hours of load. While such modules don’t schedule and do have trouble accurately predicting when load will occur, they do give you some limited visibility into potential capacity shortages. If this is all you want out of your ERP / MRP system, you should be all set.

However, many practitioners want more, much more. They hope to model their capacity finitely. When operations are scheduled, they want work to be constrained by the finite capacity of machines, tooling, labor and other resources, and materials. If capacity is unavailable, they want work to be shifted out in time, and along with it the predicted order completion date. They want to see completion dates compared to requirement dates to predict how well customer needs will be met. They want to use the software to perform what-if analysis so that the best business decisions are made under various scenarios. They want to apply this finite capacity scheduling, or advanced planning and scheduling capability, over any duration production planning and production scheduling horizon.

Not all ERP vendors make finite capacity scheduling / advanced planning and scheduling a standard product offering. If you want such capability, you may have to ask for it. Even if your vendor does have it and can make it available to you, there are some “gotchas” to look out for.

Why should there even be an issue, you ask? Advanced planning and scheduling software is a specialized application. It takes specialized knowledge to effectively develop or acquire, integrate, deploy, and implement the technology. The most successful advanced planning and scheduling vendors and applications have developed this expertise over years in the marketplace.

When buying advanced planning and scheduling software from your ERP vendor, a major “gotcha” can occur when the technology isn’t owned by your vendor, but is made available to you via some kind of “partner” relationship. Whether or not you get “burned” will be determined by whether the partnership is a marriage or a speed date.

To find out, you might need to ask: Is production planning and production scheduling software truly integrated with the ERP / MRP system? If so, show me how? How many projects have the vendors worked on together? Can I talk to references that can vouch for the success? How will the partners divide up the responsibility of helping me be successful? How strong is the partnership, and if it dissolves, what happens to me? Unsatisfactory answers to any questions should be cause for serious concern.

My New ERP System has Production Planning and Production Scheduling Capability. Why Should I Need Anything Else? (Part 2)

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My New ERP System has Production Planning and Production Scheduling Capability. Why Should I Need Anything Else? (Part 2)

In the previous post, we discussed major potential “gotchas” associated with purchasing advanced planning and scheduling software for production planning and production scheduling from ERP / MRP vendors.  We previously discussed a case where the planning and scheduling software was made available through a “partnership” agreement with a third party vendor.  In this post we’ll discuss “gotchas” when the ERP vendor owns the technology.

A major “gotcha” can occur when the ERP vendor has acquired their planning and scheduling technology through an acquisition of another company.  In recent years there has been tremendous consolidation in the ERP / MRP space.  ERP vendors have acquired production planning and production scheduling vendors.  The acquiring ERP vendors have since themselves been acquired by other ERP vendors, sometimes multiple times.  Often these acquisitions are driven by financial and marketing concerns rather than a desire to build a rational and technically sound product line.

With every acquisition, consolidation of product lines and staff occurs, and application expertise departs.  Due to all the acquisition activity, some vendors have been left with a pile of different applications puzzle pieces.  Rarely do these puzzle pieces fit into any kind of a coherent whole.  Prospective customers interested in the technology are left with applications that aren’t truly integrated, and vendor staff who don’t know their own products.

Another major pitfall involves vendors who have developed advanced planning and scheduling software to cover their competitive flanks.  Typically, these vendors are large and have deep pockets.  While these vendors may be able to assign top notch programming talent to developing production planning and production scheduling software, they still need application experience to know what needs to be developed.  Strong development capability doesn’t translate in a deep base of domain experience or experience implementing with real world customers.  The situation is compounded by the fact that, unlike MRP, there is no published, standard, well accepted, set of product features that an advanced planning and scheduling system should have.  The best planning and scheduling applications have been developed over many years by vendors dedicated to the technology with significant feedback from customers “in the field”.

Vendors with no affinity for the technology often develop applications that look great on the surface.  However, when you dig into them, you find they lack depth and are full of functional holes.  Furthermore, when you implement, you’ll often find that there is no one at the vendor who truly understands the application, or who has the necessary experience to make customers successful.

So as not to get burned, ask the following questions: Will you prototype the planning and scheduling application with my data and show it dealing with my scheduling issues?  Can you show me data moving from the ERP system to the planning and scheduling system and back again?  How will the planning and scheduling application be loaded on my computers?  Can I talk to references that will vouch for the success of the application?  Can I see the resumes / CVs of the staff responsible for implementing?  How many successful planning and scheduling implementations have they managed?

Unsatisfactory answers to any questions should be cause for serious concern.  Be particularly wary of vendors that tell you not to worry about production planning and production scheduling until after the rest of the ERP system is up and running.  Don’t fall for this sales technique often used to hide product weaknesses, or lack of planning and scheduling expertise.  If you are interested in planning and scheduling, make sure the vendor demonstrates the software to you up front, with your data, and shows how the application will solve your real world problems.