Evaluating the Value of Advanced Planning and Concurrent Planning

  1. Number of planners per value stream
    1. The ideal is one planner per value stream for raw materials, intermediates, and finished products for the entire horizon.
    2. Benchmark companies have no more than two planners per value stream for the entire horizon. The split in responsibility can be dictated by the nature of the supply chain, for example
      1. Split by time frame, short and long term
      2. Split by level of production, raw/pack and finished/intermediate.
      3. Split by production planning, distribution planning.
  2. Ratio of Capacity to Demand
    1. Low ratios of capacity to demand required that the production lines are always producing the highest priority products, as there is no spare capacity to waste, and limited recovery capability from any mismatches in demand and supply.
  3. Number of products produced on each operation:
    1. The number of possible schedules increases exponentially as the number of products per operation increases.
    2. The planners task is to find the schedule that results in the lowest setup costs while maximizing customer service:
      1. 4 products = 24 possible production sequences
      2. 5 = 120
      3. 6 = 720
      4. 7 = 5,040
      5. 8 = 40,320
      6. 15 = 1.3 trillion possible production sequences
  4. Number of possible production line options for each SKU.
    1. Adds additional permutations to the number of possible schedules and increases the difficulty of finding the optimum schedule.
  5. Efficiency losses due to setups.
    1. An indicator that there may be value in finding the most efficient production sequence.
  6. Number of levels of production.
    1. The best schedule for one level is almost never optimum at other levels, and may not be feasible at the other levels.
    2. The planner’s task is to find the best compromise that is feasible at all levels.
  7. Efficiency losses due to intermediate inventory blocking or starvation.
    1. An indicator that there may be value in better capability to model the storage constraints between levels.
  8. Amount of storage between levels of production.
    1. What is the amount of storage between levels, expressed as time? (# of days or # of hours at average production levels)
    2. The chance of blocking and starvation increases as the storage time decreases.
  9. Batch size and rounding coordination requirements between levels. For example, batch quantities of critical materials, pallets, tanks or containers, packaging materials, labels.
  10. Are there intermediate operations shared by multiple value streams?
    1. Visibility of requirements and collaboration is required to efficiently plan shared operations.
  11. Non-production resources shared with other operations and degree of coordination required, for example staffing, tools, setup crews, washout stations.
  12. Number of distribution centers.
    1. As the number of distribution centers increases, demand variability at each distribution center increases, and safety inventory is divided among more locations.
  13. Frequency of the planning cycle.
    1. The length of the planning cycle is part of response time, decreasing response time decreases safety inventories.
    2. Without better tools, increasing the frequency of the planning cycle will increase the planner’s workload.
    3. Does the current system have a lower limit for the frequency of the planning cycle based on bucket sizes (daily/weekly), computing power, or computing time?
  14. How often is the plan changed outside the normal planning cycle
    1. Frequent changes to the plan outside the normal cycle consume planner effort, and are a symptom of a planning cycle that is too long for the current levels of inventory and variability.
  15. Reaction time to respond to a plan being off track:
    1. Sum of the time to recognize that the plan is off track, change the plan, produce, and ship.
    2. Reducing the reaction time will decrease the amount of safety inventory required.
  16. Number and nature of constraints.
    1. An indicator that there may be value in a planning system that can accurately model the constraints.
  17. Is coordination of production and shipping required at a lower level than daily time buckets?
    1. A planning system that operates on a continuous time stream is needed in order to effectively coordinate activities at the daily level.

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