Crossing the Chasm from ERP to APS
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Crossing the Chasm from ERP to APS
Today we well know that, with few exceptions, ERP systems assume adequate resources are available when required, i.e. resources have infinite capacity. ERP systems have a BOM exploder and inventory control data that typically take orders for products breaks them down into component parts and calculates when to start making them based on the individual lead times perhaps adding adjustments for queuing time etc. No account is taken of the real capacity of resources and whether the resources are overloaded or not the same lead-time is used to calculate the launch time.
Because of that, many production planners and/or schedulers develop their own solution based on spreadsheets to balance capacity and demand. Solutions based on spreadsheets help a lot, no doubt, but it is time-consuming, susceptible to errors and rarely captures the tribal knowledge required to face daily challenges related to the need for re-planning and re-scheduling production due to demand changes, breakdowns, quality issues, material issues, absence of employees, etc.
Available for many years now, APS (Advanced Planning & Scheduling) systems are the solution adopted by companies to enhance ERP functionalities and at the same time, overcome the limits imposed by spreadsheets.
ERP suppliers are increasingly offering finite capacity capability to schedule works orders so that operations are only planned when resources are available. Consequently, materials can be ordered to arrive just in time-based on when they are needed for the operation to be carried out. In this way, it has been shown that inventory levels fall and bottleneck resources are not overloaded. Work in progress is minimized, lead times are more predictable and delivery dates more reliable.
To become successful, three important factors should be observed:
- Integration of the scheduling system with other applications.
- Ability to accurately model a plant’s operations (using finite capacity scheduling).
- Frequent generation of new schedules.
Finite capacity is an integral part of any APS and thus for it to be successful then it must be integrated with other applications like ERP, must have powerful modeling capabilities and run fast enough to re-generate a schedule on a regular basis.
There are two types of APS products on the market. Your choice will have a significant impact on the money you pay and the time it takes you to implement. Some APS solutions subsume and partially replace functionality in your existing ERP system while other solutions enable your existing ERP system to acquire APS functionality.
With the first option, the ERP system has very much a subservient role to the APS with BOM structures, inventory control, aggregation rules, etc. being held within the APS as well as the finite capacity functionality. In effect, similar data is held in the APS as in the ERP system. The latter is left to deal with accountancy matters such as sending purchase orders, invoicing and accounts.
The problem is that data synchronization problems between the APS and ERP packages lead to very expensive and elongated implementation times and in addition, the APS must have client-server functionality since it is replacing the client-server ERP system. In effect, your company is paying hundreds of thousands for replacing what you already have.
Crossing the chasm from ERP to APS using this approach is often beyond the financial and technical capacity of your company to do properly and therefore the system ultimately ends up being abandoned.
The alternative is to use a solution that focuses on the real problem, scheduling, which can use the data supplied to it by the ERP to provide the answer to synchronizing materials supply with a proper finite model of the production environment. This alternative provides the bridge between ERP and APS.
It ‘enables’ rather than replaces ERP and your costs are significantly less to apply and install.
The ERP system retains the BOM structures, explosion, routings and inventory control while the APS deals with the problems associated with the allocation of materials between aggregated orders and uses this as part of the scheduling function so that the constraints include not only the machines, labor, and tooling but also the constraints associated with the availability of materials at raw, intermediate and finished stock levels.
The advantage of this approach is that you take full advantage of the ‘specialist’ knowledge and development focus of the point application providers, the APS vendor, but still use your existing ERP system.
The key to a successful application, as we have already learned, is to have an accurate model of the facility enabling accurate and achievable schedules that can be generated in a reasonable time and fully integrated with other systems. Synchronization of data is much less of a problem since all data comes from one source and communication between the APS and ERP can be done using the de-facto off-the-shelf tools such as ODBC, COM, DCOM, etc. that are available today.
So, when you are considering the ERP to APS chasm ask yourself the simple question:
Is it necessary for me to throw away my existing database and start again or can I find the right application that will fill the hole in the functionality I need?
Filling that hole may prevent you from falling a much larger one when attempting to cross the ERP to APS chasm.
By the Author – Marco Antonio Baptista