The Disconnection Points Between SNP and PP/DS - Brightwork Research & Analysis

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Executive Summary

Identifying the disconnection points.
Labor pools
The Time Dimension of SNP Versus PP/DS.
Understanding the Standard Sequential Approach to Supply and Production Planning.

Disconnection Points Between Supply and Production Planning in APO

There are several disconnection areas between supply planning and production planning applications like SNP and PP/DS as a model for the traditional sequential processing of supply planning and production planning applications in general. PP/DS has a changeover/Setup Matrix, which reduces the useful working time of production resources. But while SNP hypothetically has the ability to incorporate the Setup Matrix, in practice, it is not configured to use the Setup Matrix. However, what I have seen is cycle planning used in SNP to account for changeovers. Cycle planning is based upon an analysis of products and attempts to group similar products into different weeks. Some products may be produced every three weeks, while other products produced every five weeks. Instead of allowing the system to decide when to produce, valid weeks are set for production for each product. So products A and products B may be assigned to every third week because they are both dark liquids, and therefore the production of both products in a single week reduces changeover times. However, I consider this more a workaround than a good solution. If both supply planning and production planning applications shared the same assumptions, cycle planning would be unnecessary.

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Labor Pools

PP/DS has labor pools that serve as a capacity constrain, representing the factory’s labor for a group of resources, and SNP does not have this functionality. Therefore, PP/DS may hit a labor pool constraint that SNP does not see, meaning that SNP will assume a higher capacity than PP/DS. This means that PP/DS will change the sequence and timing and the quantities of the planned orders generated by SNP – (when they fall into the PP/DS Planning Horizon). This further means that, depending upon the length of the lead times, the company will procure material for a production schedule, which is bound to change, and depending upon circumstances – could change significantly.

The Time Dimension of SNP Versus PP/DS

One of the topics of resources, while SNP and PP/DS can share the same production resources; they are managed or processed differently in terms of their time dimension. This is consistent with supply planning and production planning and scheduling being at different levels of detail. However, it also means that a foundational assumption of the two applications is different. SNP’s role concerning production planning is to create a planned (production) order, which is assigned to a day, and to pass an initial production plan to PP/DS, which is feasible per week. PP/DS then takes this initial production plan and schedules within the day to the hour and minute.

Overall, the issues above mean that SNP and PP/DS will calculate different output because they can work on different assumptions. I say “can” work on different assumptions because PP/DS can be implemented without a setup matrix and a labor pool, but then some of the advantages of PP/DS become nullified. Secondly, the different ways SNP and PP/DS treat resources are how APO is designed to work. In fact, before I was exposed to PlanetTogether, and because I primarily have worked in APO and similar applications, I thought this was perfectly natural, that is, supply planning working at one level of abstraction, while production planning working at a more detailed level. However, working the PlanetTogether caused me to challenge my assumptions.

What if both supply and production planning had the same assumptions?
What if the extra system processing of planning out with a longer time horizon?

Understanding the Standard Sequential Approach to Supply and Production Planning

In the APO or sequential model, all PP/DS has to be concerned with is moving around or creating new planned orders and scheduling production to the hour (rather than to the day, which is the output of SNP when it creates a planned (production) order. Furthermore, what if the optimizer could be made so efficient that all of this could be performed on a much lower hardware specification than applications that followed the standard sequential approach? In that case, this extra detail and combined supply and production planning run essentially would be superior to the sequential approach of dealing with supply and production planning, at least for companies where a tight integration between their supply and manufacturing plan.

Some changes can be put into effect in SNP to close the gap between SNP and PP/DS. Cycle planning is essentially a way of emulating the PP/DS setup matrix in SNP by combining products in weeks so that changeovers are minimized.