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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:
“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.
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.
The first step in evaluating production planning software is to determine what kind of buyer you are. Over 90 percent 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.
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.
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.
We're able to offer this service to buyers for free, because software vendors pay us on a "pay-per-lead" basis. Buyers get great advice. Sellers get great referrals.