When standard manufacturing resource planning (MRP) tools are not powerful enough, production managers turn to more robust, and more complicated, production planning and scheduling systems (aka “advanced planning & scheduling”). These best-of-breed planning systems use advanced mathematical models to better simulate the production environment. We wrote this buyer’s guide to help buyers unravel the web of manufacturing planning and scheduling solutions.
Here’s what we’ll cover:
What is Manufacturing Production Planning and Scheduling Software?
“Theory is closer to practice in theory than in practice” is a truism in complex manufacturing. Manufacturing resource planning software is used by manufacturers to allocate raw materials and plan production. MRP works well for manufacturers that have large runs or few products. However, the planning methodologies used by most MRP applications cannot handle the demands of large numbers of small runs of products, orders that change frequently, or large numbers of make-to-order (MTO) or customized products. That’s where manufacturing and planning scheduling software comes in.
Manufacturing scheduling software extends MRP in four important ways.
- Instead of using total capacity as a baseline for each set of planning calculations, it uses available capacity. The difference is that MRP assumes that no other work is happening, while planning and scheduling systems constrains planning based on jobs that are already scheduled.
- MRP uses simple formulas to project times to complete. Planning and scheduling solutions use more complex models, often running several different scenarios to create a more realistic simulation.
- MRP tends to take stepped approach to ordering: materials are ordered, received, and then production begins. Planning and scheduling programs incorporate order lead time when planning the manufacturing planning process.
- MRP does not consider the value of particular jobs. All jobs are treated equally. Manufacturing planning and scheduling software, on the other hand, factors in the profitability of each of the jobs and prioritizes the most profitable jobs.
Manufacturing schedule software is best suited to operations that specialize in MTO or assemble to order (ATO) operations and in agile facilities. They are also useful for organizations that use a large number of components or have complex tasks. Finally, they are critical for firms that have a limited facility that is shared among different product lines that are competing for resources.
What Type of Planning and Scheduling Buyer Are You?
The first step in evaluating production planning software is to determine what kind of buyer you are. Over 90% of software buyers fall into one of these three groups:
- Enterprise resource planning suite buyer. These buyers value the seamless integration of data and processes that comes from having one system for all functions. For example, they would prefer a full-suite system for estimating, work-in-progress management, and accounting that can automatically turn an estimate into a budget for project management, and then match invoices to project status and allocate job costs. These buyers favor ERP software vendors like Oracle, SAP, Sage ERP or Microsoft Dynamics.
- Departmental buyer. These buyers work in facilities that are shared by product lines from different vendors. They are balancing demands from different product managers and must schedule production and justify the schedule to peers and management.
- Small manufacturer. Small organizations often have limited budgets and fewer IT resources to dedicate to software. In many cases, they may be deciding between a new software system and a new piece of equipment. These buyers need cost-effective solutions that are easy to implement and use. They are seeking solutions that maximize the profitability of their plant or job shop.
Market Trends You Should Understand
While you evaluate production planning and scheduling systems, make sure you consider these market trends:
- Convergence with MRP. As the power of desktop computing continues to grow, traditional MRP systems are adding advance planning functions to their toolkits. Planning algorithms that were once only found in high-end planning systems are now in more moderately priced MRP or ERP systems.
- Direct interface with shop floor equipment. Some planning and scheduling systems can get utilization information from equipment, either directly or through the manufacturing execution system. This provides two advantages, the information is more current and it does not have to be entered by hand.
- Increased employee satisfaction. Production planning systems can consider employee preferences when allocating resources to a job, allowing employees to work preferred hours or on preferred jobs.
- Planning using data visualization. Traditional MRP systems produce reports and planning schedules. Manufacturing planning and scheduling systems do, too, but they are also beginning to offer other visualization tools, such as graphical comparisons of the results of different models.
Benefits & Potential Issues
MRP systems, whether stand-alone or incorporated in an ERP system, offer distinct benefits over less formal systems. These include:
- Better use of equipment. Manufacturing planning and scheduling systems increase company utilization of equipment. For example, the system can prioritize the use of the most expensive equipment to lower that equipment’s cost per project or can prioritize the less expensive equipment to decrease costs across jobs.
- Increased profitability. The combination of increasing utilization and prioritizing the more profitable jobs leads to increased profitability.
- Identifying bottlenecks. Planning and scheduling systems can identify bottlenecks and their associated procedures or equipment, giving managers an opportunity to boost productivity even further by adding machines or updating methodologies.
One of the biggest issues that arrive from using production planning and scheduling systems is the tendency for managers to “tweak” the system’s recommendations. This can lead to suboptimal results. If the planning and scheduling system continually gives information with which the manager disagrees, the assumptions must be re-examined or the manager should receive additional training.
E2 Shop System. Deemed the “Best in Class” shop management system among ERP options, the University of Notre Dame announced in March 2012 its selection of E2 Shop System for their college of Aerospace and Mechanical Engineering. The program will be for applied research by the Hessert Laboratory.
Fishbowl Inventory. In May 2012, Red Herring listed Fishbowl in its Top 100 North American Tech Startups for 2012. Being the most requested inventory management solution for Quickbooks and a well-known asset management solution, Alex Vieux, Publisher and CEO of Red Herring explained their selection, “We believe Fishbowl embodies the vision, drive and innovation that define a successful entrepreneurial venture. Fishbowl should be proud of its accomplishment, as the competition was very strong.”
SYSPRO. SYSPRO announced in June 2012 that Supply & Demand Chain Executive’s 100 recognized SYSPRO as a “supply chain solution provider that is leading the way in transforming companies’ supply and demand chains.” Samuel Strapping Systems, a manufacturer of steel and plastic strapping, implemented SYSPRO ERP and reduced inventories by $2 while still meeting customer demand.
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