Designing the Supply Chain

Supply chain design is the practice of creating living models to represent the existing structure and policies of the end-to-end supply chain, optimizing to identify a better future state supply chain and continuously running what-if scenarios to test new strategies and react to changing market conditions. When a company’s supply chain capabilities are directly aligned with its enterprise strategy, the results tend to be superior performance and a strong market position.

Manufacturing giant Toyota uses extremely sophisticated inventory and product life-cycle management capabilities to move products through its channels in half the time maintaining excellent quality. This is a major factor in Toyota’s consistent ability to outpace its rivals in profit margins. Would Toyota’s supply chain model work for your company? Probably not. Every successful company should have an operational design and management style tailored to its own purpose and strategy. Here is a proven process to design a supply chain network that best meets your business objectives.

Clearly Define your Strategy-The most critical step of the network analysis and design process is to identify your primary strategy. If it’s too limited then you will fail to consider and prioritize all the market requirements and factors on which participants compete (features, price, delivery, etc). Strategies also cannot be platitudes, promising all things to all people. Corporate strategy needs to define how you are going to be different and better than your competitors, and it needs to set specific, measurable goals. Then it should be communicated to the organization thoroughly and repeatedly.

Use High Quality Design Data Today’s technology can help you make better decisions as there are many vendors offering supply chain network optimization tools. Alternatively, you can cost efficiently configure your own. Make sure the software you select fully addresses the decisions you need to make and can represent your unique business and logistics network. Typical model components include capacity limitations, customer service requirements, lead times by mode, operating capabilities and the cost of different options.

Structure Supply Chain to Optimize the Strategic Goals- Connect the dots between your strategic goals and how those get delivered by the company. Supply chains that are optimized for cost efficiency will look different than supply chains that are optimized for flexibility and responsiveness. Ask the question, “Which supply chain activity is perfect for my core competence and competitive differentiation?” This step is especially critical in making in-house/outsource decisions. So prioritize your supply chain objectives and accordingly build your supply chain network, choose your supplier base and business terms, devise inventory and planning policy that support your enterprise strategy.

Get Advice during Design Process- Many other businesses in your networking circles, supplier community or common technology users may be excellent resources for supply chain design experience and advice. Ask supply chain modeling software vendors about the design community they support and how you can get involved with other users. Many will be happy to act as a sounding board for your ideas and share the lessons they learned along the way.

Implement and Refine- The supply chain network analysis and design process is not static. Successful ideas are implemented and cost savings are realized. And then things change: a large new customer is added at a new location, more production capacity is added, demand takes a nosedive, or raw material prices swing dramatically. Thus, like all good planning processes, the supply chain network analysis and design process must be on going. This process should be revisited regularly (annually/quarterly) and/or when big things happen within the business.

Asprova provides useful lessons for future modeling and improves the overall effectiveness of network planning. Our advanced planning and scheduling solutions give supply chain designers a collaborative platform to expand the value of supply chain modeling throughout the organization.

 

Photo credits: Flickr © ILO in Asia and the Pacific

Reduce inventory by 62.8%

Installing Asprova

An auto parts manufacturer,  after discovering how Asprova has been helping a lot of companies make their manufacturing lean, installed it in their mainframe to improve their own processes. Their three main reasons for doing so were:

  • Sharing and general purpose capabilities
  • High-speed scheduling
  • Full scheduling logic

autopartsThese reasons further proved the credibility and reliability of the scheduler even more. Truth to be told, Asprova is widely-used all throughout world renowned companies in  Japan (52.4% market share dominance) and abroad, and is actively used in a wide range of manufacturing areas. Asprova also gives its users a friendly graphical user interface that allows them the ease needed to speed up scheduling processes. Lastly, minimization of set-up times has always been a normal achievement with Asprova, and has been vastly used to eliminate the causes of wastes.

Reaping the Rewards

Objectively speaking, the company experienced the following benefits:

  1. setup time reduction of production planning – they can now prepare detailed plans in time units that pay attention to loads
  2. effectively reduced finished product inventories to 62.8 percent
  3. and, they were able to control progress in real time.

These are just a few of the many merits that can be achieved with Asprova.

Would the PDCA cycle become faster when accuracy improves?

Make-to-Stock

Vibration-proofing products are the specialty of this Make-to-Stock (MTS) manufacturer that we will try to analyze in this article. There are two reasons why they installed Asprova mainly: to improve efficiency and to upgrade accuracy.

The Production schedule, before Asprova introduction, was made three times a month. Because the company needed a lot of help with their vulcanization processes, they wanted to focus on narrowing this out for it to be automatically scheduled. Scheduling only three times a month made it hard for them to do so. But, after Asprova installation, they were able to schedule every day and made the processes more efficient and accurate. After this event, the company plans to expand the use of Asprova in other aspects of their production processes.

Production Planning Enhanced

According to their managers, the improvement of efficiency in making production plans is one of the best effects after Asprova introduction. Another is the accuracy enhancement of production plans.

The use of Asprova does not end in just the aforementioned details. The company predicts that in the future, there will still be effects like great reduction in-progress inventories.

How a Synchronized MRP and Finite Capacity Scheduler Helped a Cosmetic Company?

MTO Manufacturer Still Using Excel

In a Make-To-Order cosmetic product manufacturing, checking material availability usually takes a long time, sometimes it takes too long, that customers would rather cancel the order instead. It is very hard to keep up with order changes and respond to when this happens often. A Japan-based company specializing in: powders, lip sticks, and cream—experienced this setback.

The company utilized an Enterprise Resource Planning (ERP) software as the core system  in the past. This proved to be incompatible with their production setting because it took them a long time to complete all their processes and it was simply unstable. They even  had  to manually schedule using MS Excel for their scheduling because of this issue.

Finite Capacity Scheduling

However, these matters were resolved through the installation of a Finite Capacity Scheduler (FCS) software called Asprova. The company wanted to combine the two concepts to form a process that would utilize both MRP and FCS. And they succeeded by overcoming many challenges in conceptualizing how this would work (for a more detailed explanation click here—case study 14).

After switching from ERP to FCS, the company experienced a considerable reduction in manual workload, precision in scheduling, realized functionality of MRP, and  realized the computation of synchronized MRP and FCS in only 6 minutes—now that’s a quick (and also accurate) response to frequent order changes.

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What are the Benefits of Synchronizing Sales Production Orders?

Manual Scheduling

We’re now going to focus on an international company which does Make-To-Stock (MTS) manufacturing. This company is known for supplying disks to aircraft engines. Like other companies, this one had problems in scheduling because of their manual approach. This often caused delay in production operations. They also had to respond to frequent order changes.

The company needed a high-speed production scheduling tool that can function well in a fast-paced production environment—and also promise results. They tried a lot of schedulers to solve this issue before, but among all the production schedulers they tried, there was  one who could perform better than others.

It was Asprova.

Synchronizing Sales and Production Orders

According to the manager of this company’s production department, they chose this production scheduling software because it has large parameters that can be assigned by the user. “There are particular conditions and requirements here that are unique to us. Asprova’s flexibility fills the bill in that regard,” he adds.

The software helped the company synchronize their sales orders as well as their production orders. With Asprova, they were able to attain a uniform production planning and created precise production plans. Another noticeable achievement after the installation of Asprova is the automation of the previously manual scheduling operations.

What is the Importance of Scheduling in MTO Manufacturing?

MTO Manufacturing

GammaIn the case of a Mexico-based Make-to-Order (MTO) company, production only starts when the order is received. Each customer order is unique, requiring the really intense coordination of every single activity, from paper purchase to artwork and plate preparation to machine make-readies. There are many restrictions and variants in MTO. Also, there’s the problem of how to deal with shortening lead time.

Without a very flexible and capable tool for scheduling, the operators, in this MTO Company, will only be processing orders chaotically, especially on times when there are tons of orders. Sometimes, the operators might be forced to refuse some orders and would be unsure of the delivery time. This will also prove to be a hassle if the customer cancels the order. This company experienced these ordeals before they met Asprova.

After implementing Asprova, positive changes become apparent. According to case study 12 of Asprova, overall equipment effectiveness (OEE) in the company increased by 80% after using the scheduling tool for a while.

There were other benefits like the late delivery which was reduced by 50% and WIP (work-in-progress) which was cut by 66%, but more importantly, the company was able to utilize their assets better, all thanks to Asprova.

 

Production Scheduling Software: In-house VS Standard Packaged

Quick Response

Consumers look for certain traits in their service and/or product providers. Two of the many things that customers assess in manufacturers are these: a swift product delivery and a fast response to their orders or order changes. These have been continuing to stand as a firm production standard and have also taught as a management concept known to many as Quick Response (QR).

QR is a management concept created to increase consumer satisfaction and survive increasing competition from new competitors. It intends to shorten the lead time from receiving an order to delivery of the products and increase the cash flow.

Asprova, the product that aims to apply the QR concept on its clients has certainly proven itself to a well known international company that produces heavy electric machinery systems, industrial mecha-tronics, information and telecommunications systems, electronic devices, manufacturing and sales of home electric appliances, and more.

Production Scheduling

According to the company, even though they have developed their own in-house scheduler, it required a great deal of troublesome work in establishing a system. Scheduling took a long time when it is applied to actual use. In order to solve such problems, they considered the introduction of the packaged solution—Asprova.

The previous in-house made scheduling software is very simple but it was also very slow. When the company switched to Asprova, they experienced a shift from the 5-10 minutes scheduling to a 2 second scheduling. The scheduling implementation was reduced by 80% and drastically shortened the implementation overhead.

Also, one of the most notable improvements, the company said, is the fact that it enabled them to respond quickly and accurately to customer orders.