By ACCERA | June 2011
Lean manufacturing initiatives have been widely used in business for many years. More recently, APS (Advanced Planning Scheduling) systems are gaining acceptance and becoming part of the corporate priorities. However, the initiatives of joint implementation of Lean Manufacturing tools and APS are still rare, although both aim to do the same thing - to search and eliminate waste and improve operating results. This paper aims to present some joint approaches to achieving better results from the use of APS technology aligned with the principles of Lean Manufacturing.
EVOLUTION OF APS SYSTEMS AND LEAN MANUFACTURING
In order to meet the needs of customers while reducing inefficiencies in an environment where business competitiveness requires a wider variety of products and a faster supply chain can be a real challenge for many companies. To address these complexities, the executives have a wide range of solutions to choose from in the market, either by IT vendors - with tools to support the business - or by consulting solutions based on a review and process improvements.
The implementation of the MRP Systems (Material Requirements Planning), MRPII (Manufacturing Resources Planning) and ERP (Enterprise Resources Planning), launched in Brazil in the '70s, '80s and '90s, respectively, helped these companies to manage part of the operational and transactional work, but the analytical tasks of planning and scheduling continued to be carried out through manual systems and spreadsheets. With respect to the manufacturing management, it was found that MRP and MRPII systems used in isolation were not sufficient to cope with the dynamics of production and their limitations, sometimes causing lack of control in plant, problems in achieving on-time delivery and high inventories throughout the supply chain.
Motivated by the success of Toyota, the techniques and tools that would be called Lean Production or Lean Manufacturing began to be disseminated and applied in businesses as an antidote to these problems. To combat the high inventories and the usual problems of the mass production systems, these techniques and approaches distributed by Toyota aimed to, in particular:
- Eliminate economic batches, introduce continuous flow, single batches and production pulled from the demand to reduce inventories;
- Apply visual management techniques, simplified controls, extending the participation of operators and optimize execution;
- Implement improvement programs in the manufacturing process to provide more agility, dynamics and responsiveness to the productive system.
In addition to the high volume of Lean programs implementations, FCS (Finite Capacity Scheduling) and APS (Advanced Planning and Scheduling) systems began to be developed to fill gaps in planning and scheduling. By finite capacity programming concepts, the main limitations of traditional MRP / MRPII were treated in FCS / APS, which could consider the machines, manpower and special tools as capacity constraints. Then, other features also became incorporated such as the availability of materials, sequence dependent setup time, logistical constraints and more sophisticated rules for sequencing. At this point, the terms FCS and APS became known simply as APS, advanced planning and scheduling.
APS solutions became more powerful through being able to represent closely the reality of production and this gained more acceptance in planning and scheduling requirements in a company. Supported by technological advances, the APS tools progressed with advanced rules, giving realism to production plans, flexibility and easy adaptation to different environments.
Moreover, although traditional Lean concepts have a high potential to produce results and, above all, have been very well accepted by companies, it was noted that the implementations often did not generate the expected results. In many cases, projects started satisfactorily, but the tools soon fell into disuse or were unable to follow the changes in business. This happens less often when Lean initiatives are supported by a well-structured process and have integrated tools to support their initiatives, rather than being based merely on spreadsheets or manual processes.
In recent years, a large number of initiatives have been implemented in the companies to adopt this philosophy, always with common goal of delivering orders on time with minimum inventory, reduced lead times and maximum possible use of resources. However, the use of technological tools in Lean Manufacturing projects is still in early stages of maturity in Brazil, so that solutions based on an advanced planning models are often overridden by visual management or Kanban systems to control the flow of production.
The fact is that to work with the classical philosophy of Lean Manufacturing, companies mostly have sought alternatives to simplify production systems, but it is now well known that even these leaner environments still need visibility of planning and programming to achieve the best results. This can be verified in a study by Aberdeen Group (2004), which showed that many industries have been following over-simplification of the principles of Lean and, thus, are losing critical benefits that technology can bring to the systematization and support of Lean methods.
Research conducted by Aberdeen Group in 2007 to identify best practices in Lean manufacturing firms shows that the "Top 20% Best in Class" implemented lean manufacturing techniques in line with the systems of production scheduling and achieved a return twice as much than others. This was obtained through the increased visibility of the supply chain and the fact that decision makers have tools that allow them to be proactive.
Recently, the cooperation of Toyota (reference and main promoter of lean production in the world), and Preactor International (a company engaged in the category of APS solutions), has generated a series of new initiatives use the techniques of Lean manufacturing solutions and the programming with finite capacity. Apart from conventional applications for synchronization, setup and optimization of maximizing delivery performance, some unique solutions for alignment with the Lean philosophy are being developed, as a new rule for calculating Heijunka production levelling automatically, optimized which varied according to the variation in the demand mix.
These specific solutions, associated with many successful cases of companies that tried to become leaner using a tool for planning and programming more efficiently, have attracted a new model of alignment between the APS projects and Lean Manufacturing. Figure 1 shows a sketch of the evolution of different approaches, from the spread of ERP software and MRP / MRP II.
FIGURE 1 – Lean Concepts and APS Evolution (Adapted from Mike Liddell, 2011).
On one side there is the development of tools related to the concept of Lean Manufacturing and, in the other, technology developments related to APS, both having their origin in the problems arising from the limitations of traditional systems to deal in really lean planning, scheduling and production control. Although these techniques evolved independently, we can see that there is a strong tendency toward alignment of these solutions, APS solutions are increasingly linked to the concepts of lean production and increasingly applied with integrated tools for process optimization.
The next chapter will present some APS software implementation strategies aligned with Lean manufacturing tools, according to the authors practical experience in several successful projects for the deployment of APS aligned with the Lean Manufacturing concepts.
IMPLEMENTATIONS OF APS TOOLS ALIGNED TO LEAN MANUFACTURING
Respond on demand and eliminate inventories
Increasingly, companies seek to align their business to real demand, either through a make-to-order system or through greater visibility of demand at the front end of the chain (sales). In this context, the use of an APS system can assist the company in the gradual transition to the new business model, offering the possibility to reduce or eliminate economic batches, scheduling production according to customer needs and balance the demand to capacity of production.
Identify bottlenecks and balance the production according to mix
Using the APS system, one can identify in detail the main bottlenecks in production, whether in relation to machinery, manpower, tools, or to any logistical constraints. Besides seeing which resources would be needed to enable a plan, it is also possible to analyze the impacts of finite resources and generate in indicators that simulate the operational result of the schedule, such as showing late orders, inventory levels and utiliziation of machines.
Match advantages of cellular and functional layout
There are advantages and disadvantages of using cell layout compared to functional layouts in production. While cell layout can increase efficiency by processing products of the same family together, a functional layout can offer more manufacturing flexibility, increased agility and resource utilization when there is more variation in demand.
Figure 2: Functional Layout
Figure 3: Group Layout
The APS can be implemented in any of these scenarios, with the advantage that system can help plan the configuration of cells and allocate dynamically the demands, rather than simplify problem by establishing dedicated resources that can affect the balance of resources.
Accomplish levelling of resources from the plan of the S&OP
The APS system can be used as a tool for the analysis and simulation of scenarios from the S&OP medium-long term plans. This process relies on a technology to perform advanced simulations of scenarios according to the concept of finite capacity and can assist in the determination of working arrangements and resource levelling.
Schedule the setups to minimize non value add activies without compromising delivery times
Even implementing initiatives for the single minute exchange of dies (SMED), wasted time through extensive changeovers from batch to batch may affect production capacity if not properly managed. In this sense, APS can be parameterized using "from/to" changeover data arrays to identify time required for each exchange in order to perform intelligent scheduling that simultaneously minimizes total setup time and maximizes on-time delivery of orders.
FIGURE 4 – Comparison of three different scenarios for programming the same set of production orders.
Note the example in Figure 4, in which there are three different scenarios for sequencing the same set of production orders. Each colour represents a product, and the black bar shows a setup time required for between each order. In the first scenario, “delivery” is the only criterion considered, which has caused two delays and a poor utilization of productive capacity. In the second scenario, we used a rule set optimization with optimization horizon of two days, which reduces delays and generates an intermediate result resource use. In the last scenario setups are minimized, but generates a worse outcome with regard to late deliveries. It would be up to the planner to compare the results and choose which scenario should be taken either prioritizing use of resources or attention to time limits.
Use advanced rules for prioritization and selection of orders
Depending on the application environment, it could be more interesting to use the APS for planning purposes rather than production scheduling. That is, instead of working with manufacturing orders, the APS can be used with sales orders, applying advanced planning order rules before the MRP is run, for example. Orders of this type usually are used to embed greater intelligence generating new orders, producing better results in terms of profitability, resource utilization and on-time deliveries.
Implement continuous flow and eliminate work-in-process
One approach to reducing work in progress is to use Kanbans in flow lines controlled by a pull system. In this the demand for a product triggers the manufacture of semi-finished product which in turn triggers parts to be made.
Figure 5: Physical layout using Kanban squares
Kanban pull systems work well in many environments but are not recommended for plants that experience: (i) unstable demand, (ii) high product variety, (iii) dependent sequence setup time, (iv) operational constraints with alternative resources, (v) high rate of scrap and rework (vi) breakdown of machinery and maintenance problems.
Thus, the efforts applied to the use of a systematic program that aimed the synchronism of operations can contribute significantly to the reduction of work-in-process and maximizing the rate of value-added manufacturing process. It is also noteworthy that the hybrid models can be applied, using detailed scheduling on critical resources and scheduling processes that have the appropriate characteristics.
Plan your Kanbans in a dynamic and systematic way
Instead of applying the Kanban technique in physical format, fully manual, the APS system can help improve the agility and dynamism of this type of solution. The system can see inventory levels, backlogs, batch parameters, cycle times, setup times and other relevant information to calculate the Kanban optimally and dynamically according to changes in market demand and production. Sending the Kanban signals can be made available to the plant by card printed or electronic methods. This solution makes the process more agile, especially in scenarios with high product variety and stable demand.
Using Heijunka with batches and variable sequence
The use of tools like Heijunka which applies the concepts of load levelling with a visual feedback, usually with fixed rules, is sometimes implemented to compensate for the difficulty of updating the calculations required. Using an APS system, Heijunka can be applied dynamically as demand changes or when unforeseen events occur, and there are delays in the production. This mechanism is used through a special rule in the APS that calculates the levelling with the batch and sequence of variable manufacturing; this has been successfully used in planning production at Toyota.
Make scenario simulations and direct opportunities to Kaizen
Also known as Finite Capacity Scheduling, APS software is distinguished by the ability to consider various operational constraints of the processes in order to represent closely the constraints of production. By understanding and knowing the factors that determine the production capacity, we can easily identify opportunities for improvement in the process. Moreover, potential improvements can be simulated before being implemented, which reduces the risk in decision making.
Apply the Just-In-Time Supply Chain
The use of an MRP-type system may be enhanced when used in conjunction with APS software. Instead of considering the lead time as a fixed value and production capacity as infinite, APS can plan manufacturing orders in much more accurately so that it matches the actual requirements. This approach can have a marked impact in reducing on-hand inventories.
Schedule preventive maintenance and external setups
In addition to performing the scheduling of manufacturing orders, APS can be used to plan preventive maintenance so that they may be scheduled when unused rather than stopping them at critical periods. More than this, APS programming can see the maintenance team as a constraint and provide a detailed plan of exchange to be made in each of the resources per day in order to offer the opportunity to exchange for example a tool or die at the next changeover rather than stopping a machines.
Lean Manufacturing concepts emerged in response to a major crisis, which forced the development of solutions to extract maximum results with minimal resources, through the attack on the waste in the entire supply chain. This was the guideline that forced the emergence of Lean 40-50 years ago, but the same challenge is prevalent today in companies who need to produce their products with quality, efficiency and lowest possible operating cost.
FIGURE 6 - Before APS & LEAN. (Adapted from Mollison, 2009).
FIGURE 7 – After the APS & LEAN. (Adapted from Mollison, 2009).
The best way to use the APS depends on the company's culture and current stage of progress of the tools used for planning, scheduling and production control. For example, a company that has a strong culture of Lean Manufacturing and is well suited to this approach may prefer to use the APS calculation levelling Heijunka or Kanbans. Companies that are beginning the transition to Lean, may prefer to use more resources to fine programming and seek make-to-order system to become leaner.
On the other hand, a company that works closely with the APS detailed schedule of all operations can benefit from Lean initiatives, as well as obtain benefits that can help reduce setups, layout improvements, reduction of quality problems and greater stability of the processes. The joint implementation of Lean initiatives and APS can operate in a hybrid manufacturing environment where a programming model for critical process steps that need to be programmed and pull programming systems for operations that have the characteristics suitable for this type of process.
The practical applications of utilizing Lean Manufacturing practices and the APS software presented in this article represent some successful examples of this approach. Certainly, other applications can be made with this same approach, because there is a high degree of complementarity between the solutions, either with regard to the theoretical concept and philosophy involved, or in the strategic objectives that guide the deployment of projects.
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