Achieving The Benefits of APS System

Advanced Planning and Scheduling (APS) system refers to a supply planning process by which raw materials and resources are optimally allocated to meet demands. Traditional planning system such as MRP utilizes a stepwise approach to allocate material and resource. This approach is simple but  cumbersome, and does not readily adapt to changes in demand, resource capacity or material availability. Materials and capacity are planned separately, and many systems do not consider limited material availability or capacity constraints. Thus, this approach often results in plans that cannot be executed.

Due to the limitation of traditional planning systems, many companies have implemented APS system such as SAP’s SCM/APO system. SAP’s SCM/APO solution started more than 10 years ago. I personally involved in 10 SCM/APO system implementations since 2001. To be honest, I believe only 2 implementations have achieved desired benefits of the APS system. This does not mean other implementations are failures. In many cases, the implementation objectives and approaches are not designed to achieve the benefits. For example:

  • Company implements APS system based on old processes. If the planning process is based on traditional MRP type of planning system, the benefits from a APS implementation will be very limited.
  • The projects are narrowly focused. Instead of improving the efficiency and effectiveness of the supply chain, many projects are focusing on sub-processes such as scheduling only.
  • APS system poses greater challenge on busiess users and IT community. Many projects simply choose not to “touch” the Advanced planning engine such as Optimizer and CTM. Others abandoned the projects after go-live.

Of course, there are many factors contributing to the success of APS implementation. I believed the follow two issues are critical towards achieving the benefits of APS system:

  • top management’s commitment of an advanced planning process

  • closing the knowledge gaps

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