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Getting the best from Planning AND Scheduling software
The terms "planning" and "scheduling" are fundamentally important words within the world of manufacturing, as many a production manager, purchase manager, sales manager, master planner and master scheduler will attest.
Weaknesses or failure in either, or worse still both, can have a dramatic impact on the ability of a manufacturer to meet its customer delivery promises. And with certain sectors within manufacturing, notably food, stipulating On Time and In Full (OITF) levels often in excess of 95% either as a contractual condition of business or a minimum acceptable level below which punitive action can be taken, accurate planning and scheduling is more important than ever.
Non interchangeable
Yet while there is a naturally strong relationship between the two terms, it would be a mistake to use them interchangeably as can often be the case. So says Dr Nigel Shires, Technical Director of leading Advanced Planning and Scheduling (APS) specialists Preactor International. He maintains that while planning and scheduling do describe similar tasks, recognising the differences between them is of great importance if a manufacturer is to achieve the maximum benefits from both.
"Planning is fundamentally looking at and predicting what products need to be made and when, whereas scheduling is concerned with the fine detail of sequencing orders and operations, taking into consideration all resource requirements at each step including equipment, staff, tools, space and materials," he explains.
To help explain the relationship between the two, Shires compares and contrasts them within certain helpful categories: Horizon, Input and Usage.
Horizon
Beginning with Horizon, planning is typically broken into the 3 key levels beginning with the strategic horizon with tends to be 12-18 months and is measured by months. The level under this is referred to at the tactical horizon which tends to be approximately 12 weeks and is measured in weeks, while the nearest horizon is the weekly operations plan which is measured in days and extends to a typical maximum of 1-4 weeks. Scheduling tends to be much more real time, right down to hours and even minutes yet can extend days, weeks and at times, up to months.
Input
In terms of Input, by which we mean the information required to drive the plan or schedule, planning is driven by forecast, whereas scheduling is driven by actual Works Orders.
...& Usage
Usage refers to how often a plan or schedule is run with planning typically operating on a monthly or even 3 monthly basis. Scheduling, however, can be updated and used on a weekly, daily or even hourly basis where required.
Having identified the interrelationships between the terms, Shires moves on to explain how these work in practice to meet the challenges of the Fast Moving Consumer Goods (FMCG) and Food sectors. Such sectors still have to make to stock to meet a forecast projection of sales, while often attempting to embrace the principles of lean manufacturing - i.e. minimising waste and maximising flow and efficiency.
FMCG challenges
The first challenge necessitating demand planning and scheduling to work together is that demand may have significant time-based variations, for example summer or Christmas, yet production has a fixed amount of capacity. To avoid having spare capacity during the periods of low demand or doing overtime and sub-contracting during periods of high demand, the amount of production needs to be made as constant as possible, with a warehouse used to hold the resulting stock in the periods of low demand. In this case, a calculation has to be made of what the ‘standard' capacity is needed to meet the expected sales without running out of stock.
For one product this is a fairly simple calculation, but the additional factors that make this more difficult are that while usually a maximum amount of a certain product can be made during a production period, sometimes this might be a minimum or limited amount depending on whether other products are being made during the same production period (production periods are usually daily, weekly or monthly).
Another challenge is that the time required to produce the goods and have them delivered to the customer can often be greater than the time expected or required by the customer between placing the order and expecting delivery. This is commonly found in the fresh food industries where products can have a short shelf life. For example, a supermarket may confirm a large order of fresh pre-packed salads only hours before these would need to be delivered which would physically not leave the manufacturer time to produce such a quantity.
The problem is exacerbated in supply chain contexts where the physical production time of the products may be dependent of variable delivery times of raw materials etc. prior to production and variable delivery mechanisms after production. Once again, a food manufacturer still has to deal with the reality of production constraints such as finite capacity, changeover times, minimum/maximum batch sizes and so on.
Dedicated APS
It is here that a dedicated APS system such as Preactor that recognises the way that demand planning and production scheduling interact can help manufacturers overcome such challenges. Using an APS system to solve the capacity problems linked to a planning system enables predicted production to be compared with planned production, with potential shortages identified in advance. By doing so, the planner can then make the most informed decisions dealing with the inevitable tradeoffs between stock holding targets and delivery performance.
From a systemic perspective, the planning system can be built as a module within Preactor or the APS system can be linked with other commercial demand planning systems as is the case with UK based Ardo Foods, part of Belgian based Ardo Group.
Integration
As a leading European company with a turnover in excess of £300m, Ardo is an example of a company that fully understands the need to integrate its long term demand planning with its short term production scheduling. Bulk frozen goods are received at the company's packing site from the relevant Ardo growing/freezing centres worldwide where they are then mixed and packed accordingly before being sent to a separate cold storage site prior to distribution. Serving the likes of Tesco, Sainsbury, Morrisons etc, Ardo has to balance long term demands with the short term production scheduling realities.
As Ardo's Production Planner Patricia Speakman states: "Balancing the load level on each of our 5 production lines and maximising each resource taking into consideration changeover times, sequence optimisation etc is therefore central to our planning requirements."
Ardo uses a combination of historical product sales with localised sales knowledge as the basis of long to mid term planning considerations, with these being handled by the company's New Look ERP system and its Vendor Management System called Complete. These considerations are complicated by dealing with products that are highly seasonal that can vary due to weather conditions, in addition to highly variable delivery times resulting from products being sent from the other side of the world.
A prerequisite requirement for the company's new APS system was therefore the need for it to seamlessly integrate with its existing systems, something achieved by Preactor solution provider Kudos Solutions. Now, while stock levels and goods in/out are handled by New Look, Preactor is being used to generate a weekly schedule and individual daily production plans on a three day rolling basis.
Mutual appreciation
This seamless interaction of demand planning and production scheduling has provided a number of benefits, most notably according to Patricia, creating a very positive relationship with the planning and production sides of the business as each can see and appreciate the needs of the other. This is in addition to the proven APS benefits of increased production visibility and control and fine tuning via ‘What If' capabilities which allow a variety of scenarios to be considered in terms of reacting to unexpected issues such as a problem with a production line or a product delivery.
Perhaps the greatest endorsement of this combined approach comes from Patricia herself: "As a professional planner I need the right tools to do the job. Preactor (working with New Look and Complete) is that tool and has proved itself to everyone with the entire company benefiting from the way it has helped us work more efficiently together."
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