When looking out across the shop floor is the schedule that operations is working to achieve feasible? Does the schedule consider where you are today and the capacity that is available (material, machine, labor, space, tools, etc.) to provide a realistic plan of what can be done by when? Are operations flowing or are there disruptions that show up in the form of drop-in orders that require you to break into a run? Are you regularly fielding calls, emails and instant messages on when product will be available?
A little bit of art mixed with a whole lot of science is required to build a solid, realistic plan that will turn into a feasible schedule. It also requires collaboration across supply chain functions (planning/scheduling and operations). SAP offers standard functionality, that when deployed with the right thought process, correct data and a cadenced framework of activities, will support a realistic plan that will be supported by a feasible schedule. We can see our long-term, mid-term and short-term evaluations of capacity vs demand and proactively have conversations and make decisions on the best way to meet customer needs.
At the heart of getting this right is excellent customer service, both internal and external. The dates in the system drive ATP (Available to Promise) and material needs by dates for procurement. ATP is how to make promises to customers and the dates that materials are required and how to allocate them drives the coordination of the rest of the supply chain; as well as the costs associated with it. There is nothing more frustrating that expediting material that is not needed and having it take up space while waiting for something else that is needed.
For a manufacturing company to survive and thrive, its operations have to be both lean (cost competitive and efficient) and agile (responsive to market demands). To meet these expectations, manufacturers are pushing hard to improve performance across a range of capabilities, including improving production processes, strengthening customer relationships, increasing labor productivity, prioritizing capacity and asset utilization while increasing demand responsiveness.
Regardless of the manufacturing process; make-to-stock (MTS), make-to-order (MTO), assemble-to-order (ATO), etc., production & capacity planning within SAP provides operations visibility, traceability, information and cost management to determine the best economic use of resources while also providing the ability to quickly respond to fluctuations in demand.
Reveal’s production and capacity planning expertise empowers organizations to aligning demand with manufacturing capacity to create production and procurement schedules for finished products and component materials. Through our oVo® methodology, we provide the necessary education, change management and best practices to enable improvements in team member knowledge, data integrity and configuration, aligned processes, established accountability structures and KPI reporting based on business objectives.
If demand for product varies, production and capacity planning is a way of ensuring that you are fulfilling orders with the less disruptions to shop floor operations and are positioned for flow. Properly monitoring capacity, managing capacity load and effectively planning changes to your output has numerous benefits for the company. Not only does it maximize utilization of available resources, it increases schedule and plan attainment and can be used to increase the efficiency of your operations.
Benefits of Production & Capacity Planning
- Less disruptions to shop floor operations even as demand fluctuates
- Improved customer service by providing realistic order ship/availability to customers
- Optimal use of labor and equipment through capacity evaluation and leveling
- Reduced and meaningful exception messages as production moves from the planning cycle into the schedule cycle
- Helps the supply chain prioritize requirements
- Inventory reduction, leveling
- Efficient use of set-up/change over time through improved sequencing
- Improved material availability to the shop floor
- Effective use of available assets (material, machine, labor and space)