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1、Advanced Planning and SchedulingIs logistics everything?A research on the use(fulness) of advanced planning and scheduling systems.Marjolein van EckBWI paper, April 2003Advanced Planning and SchedulingIs logistics everything?A research on the use(fulness) of advanced planning and scheduling systems.
2、Marjolein van EckBWI paper, April 2003Vrije Universiteit AmsterdamFaculty of Sciences Mathematics and Computer science departmentsPaper for Business mathematics and InformaticsDe Boelelaan 1801a1081 HV AmsterdamPrefacePrefaceThis paper is part of the doctoral programme of the study Business mathemat
3、ics and Informatics (BWI) at the vrije Universiteit Amsterdam. This paper is based on a literature research into advanced planning and scheduling.This research is subtitled: Is logistics everything? which refers to a headline in the NRC Handelsblad on the 29th of November 1997: “Logistiek is alles.”
4、 (Logistics is everything). An article with the retiring chairman of the EVO, the organisation for logistics and transport.Since a decade the accent in the logistics sector has moved from inside the factories and warehouses to the outside world. The Supply-Chain paradigm has lead to new research are
5、as and technologies in the search for an increased control of the total logistics chain of companies who co-operate to produce and sell products.One of the most remarkable results of the Supply Chain concept is the increase in the use of formal, scientific methods to support the logistical decision-
6、making. With this research I hope to have given a critical and objective view on this new development.I would like to thank my supervisor Ger Koole for his critical view. Marjolein van EckAmsterdam, The Netherlands, April 2003- ii - Executive summaryExecutive summarySupply chain management (SCM) is
7、defined as a process for designing, developing, optimising and managing the internal and external components of the supply system, including material supply, the transformation of material and distribution of finished products or services to customers, that is consistent with overall objectives and
8、strategies (Spekman, 1998).The essence of SCM is a strategic weapon to develop a sustainable competitive advantage by reducing investments without sacrificing customer satisfaction (Lee and Billington, 1992). Since each level of the supply chain focuses on a compatible set of objectives, redundant a
9、ctivities and duplicated efforts can be reduced (Spekman, 1998).All companies function as links in chains of entities that produce and distribute products. Many companies have viewed their participation in the supply chain from an independent perspective, and focused on the maximisation of its own p
10、rofitability. In the traditional view each organisation aims to maximise its own profit, while in the new integrated view each organisation aims to maximise total supply chain success. Therefore a supply chain company in the new view must lose its external boundaries.Four forms of supply chain integ
11、ration can be distinguished: Physical integration Information integration Management control integration Organisational integrationMaterials requirements planning (MRP) and capacity requirement planning (CRP) systems have been gradually developed towards closed loop systems entitled Manufacturing Re
12、source Planning (MRP II), which integrate both materials and capacity requirements. Latest, Enterprise Resource Planning (ERP) and Advanced Planning and Scheduling (APS) systems have improved the integration of materials and capacity planning by use of constraint-based planning and optimisation. Fur
13、ther many ERP en APS systems make it possible to include supplier and customer in the planning procedure and thereby optimise a whole supply chain on a real-time basis.Instead of an ERP system that focuses on each individual link in the chain, an APS system is a system that suits like an umbrella ov
14、er the entire chain, thus enabling it to extract real-time information from that chain, with which to calculate a feasible schedule, resulting in a fast, reliable response to the customer.APS is a new revolutionary step in enterprise and inter-enterprise planning. It is revolutionary, due to the tec
15、hnology and because APS utilises planning and scheduling techniques that consider a wide range of constraints to produce an optimised plan: Material availability Machine and labour capacity Customer service level requirements (due dates) Inventory safety stock levels Cost Distribution requirements S
16、equencing for set-up efficiencyThis paper also discusses the basic functionality of planning and scheduling in Advanced Planning and Scheduling systems (APS). Three basic planning options - concurrent planning (or unconstrained planning), constrained planning and optimisation - are analysed. The pla
17、nning functionality is radically improved compared to MRP and MRP II. APS is relevant for production-organisations. Also distribution-organisations can benefit from implementing APS for supply chain management. The key success factors, which are necessary to implement an APS system successfully, are
18、 as follows: Supply chain management concept Experience Nervousness Human factor Complexity Financial resources Data accuracy- vi -Table of contentsTable of contentsCHAPTER 1. INTRODUCTION1CHAPTER 2. THE INTEGRATION OF THE SUPPLY CHAIN32.1 Supply chain32.2 Supply Chain Management42.3 Supply Chain In
19、tegration5CHAPTER 3. PLANNING SYSTEMS93.1 Planning systems93.1.1 Statistical inventory control93.1.2 Material Requirements Planning93.1.3 Manufacturing Resources Planning103.1.4 Distribution Resources Planning103.1.5 Enterprise Resources Planning103.1.6 Advanced Planning and Scheduling113.2 Planning
20、 systems versus supply chain integration12CHAPTER 4. ADVANCED PLANNING AND SCHEDULING154.1 APS solutions154.2 Differences in planning horizons174.2.1 Supply Chain Planning184.2.2 Manufacturing Planning184.2.3 Production Scheduling184.3 Planning and scheduling194.3.1 Advanced Planning194.3.2 Advanced
21、 Scheduling194.4 Features of APS204.5 APS in relation to traditional planning systems274.5.1 APS versus MRP I/II274.5.2 APS versus ERP284.6 APS for production organisations284.7 APS for distribution organisations29CHAPTER 5. ANALYSIS OF THE PLANNING AND SCHEDULING FUNCTIONALITY315.1 APS functionalit
22、y315.2 Unconstrained planning315.3 Constraint-based planning325.4 Optimisation345.4.1 A supply chain optimisation problem365.4.2 Optimisation framework395.4.2 Optimisation solvers395.4.3 A standard LP-model for optimisation415.4.4 Optimisation usage guidelines445.5 Uncertainty44CHAPTER 6. IMPLEMENTA
23、TION OF APS476.1 Implementation strategy476.2 Points of attention486.3 Integration with existing systems496.4 Conditions for APS50CHAPTER 7. CONCLUSIONS AND DISCUSSION51APPENDIX A. REFERENCES55APPENDIX B. ABBREVIATIONS57APPENDIX C. SOFTWARE VENDORS59Rhythm Solutions of i2 Technologies59Manugistics6
24、of Manugistics60APO of SAP61IntroductionChapter 1Chapter 1. Introduction“The 1990s have seen a dramatic change in the way that we do business. Rapid advances in technology and increasing regulatory freedom have changed the rules of competition. Companies are now competing globally and traditional ba
25、rriers between industries are breaking down. To cope with these changes and achieve superior performance, business leaders are moving towards new business paradigms that allow their companies to work more closely with their traditional and new business partners to adapt to the rapidly changing marke
26、tplace. This improved integration is the very essence of supply chain management. Supply chain leaders are reconsidering the linkages, not only between functions within their own company, but with other organisations up and down the supply chain.” (Gattorna, 1998)Supply chains are becoming more effi
27、cient and more responsive to the needs of increasingly demanding customers, driven by competitive pressures and supported by developments in information technology (IT). IT plays a major role in integrating supply chains and managing them more effectively.Almost every industrial company is now consi
28、dering the implementation of an advanced system to manage their supply chain more effectively, improve customer service dramatically, and reduce costs as well. These systems are Advanced Planning and Scheduling systems (APS) with marvellous names such as i2/Rhythm, Red Pepper and Manugistics.With th
29、ese systems it is possible to answer customer enquiries within seconds instead of hours or days. Speed is just one of the characteristics of APS. It promises that after implementation of APS, better throughput times, delivery times, inventory levels and utilisation rates result in higher levels of c
30、ustomer service and major reductions in costs.During the recent years system vendors have put much effort in improving the functionality of APS systems. But what is the true value of these concepts? Are they as revolutionary as they sound? Implementation of these kinds of systems have dramatic conse
31、quences for the organisation. Is it worth to implement these new software packages?The objective of this paper is to map the characteristics of advanced planning and scheduling systems and to find out the (use)fulness of these systems. Therefore the following problem has been formulated:“Why (and ho
32、w) should organisations implement an Advanced Planning and Scheduling system?”To solve this problem several questions will be answered: What is supply chain management? What is supply chain integration? What is Advanced Planning and Scheduling? What is the difference between ASP and traditional plan
33、ning systems? What are the current functionalitys of APS systems? What are the key success factors for implementation?To be able to answer these questions available literature on this subject has been studied. Chapter 2 will give insight in Supply Chain Management (SCM) and the four stages of supply
34、 chain integration. Chapter 3 will describe all the planning systems, which can be used, ending with APS and the relation between the planning systems and supply chain integration. Chapter 4 will continue on these planning systems with a profound description of APS. Chapter 5 focuses on the three ba
35、sic planning options. Unconstrained planning, constrained planning and optimisation are analysed. Chapter 6 discusses the implementation and the conditions for a successful implementation. The final conclusions and discussion points will be stated in chapter 7. Appendix A contains the references and
36、 in appendix B the used abbreviations will be enumerated and explained. Finally, in appendix C the three main suppliers of APS software will be described.- 2 -The integration of the Supply ChainChapter 2Chapter 2. The integration of the Supply Chain“Like the medieval lords who built moats and walls
37、around their castles many organisations have constructed artificial boundaries between themselves and the outside world. While these boundaries do not consist of water and bricks, they are just as difficult to surmount. More importantly, just as social evolution made castle walls obsolete, the new s
38、uccess factors of speed, flexibility, integration, and innovation are making boundaries between organisations less relevant. In fact, hiding behind such boundaries today can be more dangerous than venturing outside.” (Ashkenas et al., 1995)2.1 Supply chainWorld class companies are now accelerating t
39、heir efforts to align processes and information flows through their entire value-adding network to meet the rising expectations of a demanding marketplace (Quinn, 1993).Some of the drivers for change, that forces companies to overhaul their logistical structure are (Holmes, 1995): Increased regional
40、 and global competitionThe most potent force driving companies to overhaul their supply chains is increased cross border competition, regional and global. For many companies the competitive arena has become worldwide, rather than national or regional. The role of the single market in EuropeEuropes s
41、ingle market has intensified competition by tearing down the last protective barriers. At the same time the single market is an important factor which enables supply chain integration across borders. The dismantling of frontier controls has led to the speed-up of road transport, which facilitates th
42、e switch from national to multi-country distribution centres. Shorter product life cyclesThe trend towards shrinking product life cycles force a change in logistic management as it augments the risk of being stuck with obsolete inventory. Changes in the market placeNational and crossborder mergers a
43、nd acquisitions in recent years have led to greater concentration of purchasing power in most sectors of industry. In the wholesale and retail distribution the growth of powerful chains is squeezing out the independents. Pressure from smarter customersMajor retailers and industrial end-users are bec
44、oming more sophisticated and more demanding. They are reducing their supplier base and are working more closely with the remaining suppliers. Service as a differentiatorProducts are more and more becoming commodities, forcing suppliers to search for new ways to differentiate themselves. Competitive
45、edge will come from service differentiation.The ability of an organisation to distinguish itself is coming to lie increasingly in the area of customer service. This places heavy pressure on the logistical chain. Delivering goods to customers in the most economic way while providing first-class servi
46、ce and quality is the logistics strategy. This requires more and more integration of the supply chain, in which all parts of the supply chain are linked to each other.Suppliers and customers cannot be managed in isolation anymore, with each entity treated as an independent entity. More and more, the
47、re is a transformation in which suppliers and customers are inextricably linked throughout the entire sequence of events which brings raw material from its source of supply, through different value-adding activities to the ultimate customer. Success is no longer measured by a single transaction; competition is now evaluated as a network of co-operating companies competing with other firms along the entire supply chain (Spekman et al, 1994).Analytically, a supply chain is simply a network of material processing cells with the following characteristics: supply, transformation and demand (Davi
