Specialize in Value Chain Planning...

Specialize in Value Chain Planning Solutions

Enterprise Value Chain Planning

Capacity Management

A Business Perspective

Agenda

■ Capacity Management - A Perspective

■ What does it look like?— Resource and RCCP Planning— Capacity Requirements Planning— Scheduling (Dispatching load and balance)

■ Summary / Questions

Oracle Value Chain Planning Solution

e-business planning process platform………….

Demand SignalManagement

DemandManagement

Organization Collaboration

Internal and External

PlantScheduling and

Monitoring

OrderPromising

Service Parts

Planning

Trade PromotionManagement

Supply and DistributionPlanning

RiskManagement

Sales and OperationsPlanningPerformance

Management

Capacity Management

The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity (capabilities) in order to execute all plans; i.e., the production plan, master production schedule, supply chain, material plan, and dispatch list, etc.

Capacity management is executed at four levels:

1) Resource Requirements Planning

2) Rough-Cut Capacity Planning

3) Capacity Requirements Planning

4) Input/Output Control (Finite Load and Balance)

Planning and Control in PerspectiveSynchronous / Closed Loop

Plan

Schedule

Execute

ControlFeedback

Evaluate

Re - Plan

Planning only what we can and will produce not what we wish we could

Validate / Verify -”Know before you go”

Feed back for corrective action

Re-initiate and re-synch the process

Demand SignalManagement

DemandManagement

Organization Collaboration

Internal and External

PlantScheduling and

Monitoring

OrderPromising

Service Parts

Planning

Trade PromotionManagement

Supply and DistributionPlanning

RiskManagement

Sales and OperationsPlanningPerformance

Management

Plan

Schedule

Execute

ControlFeedback

Evaluate

Re - Plan

A Control Model

Compare achievementto objectives

Reviseobjectives

Perform activitiesPlan actionsSet objectives

Reviseplans

Adjustperformance

Feedback

Measure results

Activity Control

Built upon………● Environment Characteristics and Strategies

● Demonstrated Capacity, Utilization, Efficiency

● Balancing Requirements and Capabilities

● Cycle Time

● Priority Rules

● External Relationships

● Variances

Capacity / Priority Interrelationship

Sales and Operations

Operations Planning

Supply Chain Planning

FiniteScheduling

Validates

Feedback

Resource Planning

Rough-Cut Capacity Planning

Capacity requirements Planning

Finite Capacity Planning

Source: Adapted from Bihun and Musolf, Capacity Management

Priority Planning Capacity Planning

Priority Control Capacity Control

ASCP / Demantra

Tools / Technique

ASCP / Demantra

ASCP

ASCP, EBS, PS

Dispatching Execution SFS, MES, EBS, PS

Total E-Business Planning Process Model

Material Plan

Resource plan

Master Production Scheduling

Rough-cutcapacity plan

Capacity Requirements Plan

Executing theResource plan

Supply Chain Planning

S&OP

Business plan

Executing the Material Plan

Demand Planning

Sales and Marketing

Product Development

Inbound Logistics Outbound Logistics

EAM Plan

Cumulative Overload—Balanced

Capacity

Load

Cumulative Underload—Balanced

CapacityLoad

Cumulative Overload—Unbalanced

Capacity

Load

Skewed Load Profiles

Advantages and Limitations

➔ Advantages☑ Provides time-phased visibility of capabilities ☑ Confirms adequate cumulative capacity☑ Considers specific lot sizes and routings☑ Estimates lead times more precisely☑ Contributes to the elimination of erratic

lead times☑ Foundation for consistent and reliable information

Advantages and Limitations - Continued

➔ Limitations☑ Requires a great deal of computation☑ Unconstrained performs only a backward schedule☑ Requires extensive amount of input data☑ Planned computational preciseness is somewhat illusory☑ Must be compared to demonstrated for validation☑ Unable to give precise level of detail☑ The effect of revisions not always clear without simulation

Effects of Not Doing

➔ Bottlenecks

➔ Low Productivity

➔ Higher work-in-process inventory

➔ Late deliveries and shortages

➔ Extended lead times

➔ Higher costs

➔ Loss of competitive stance

Agenda

■ Capacity Management - A Perspective

■ What does it look like?— Resource and RCCP Planning— Capacity Requirements Planning— Scheduling (Dispatching load and balance)

■ Summary / Questions

Resource / RCCP Example

Pre-Requisites

➔ Valid Resource and Routing Details

➔ Family Structure and/ Hierarchy

➔ Demand Management

➔ Data Series / Adjustment

➔ Demand Scenario Driven

What does it look like?

ASCP Load

Constraint Forecast

Base-Line Forecast

Demantra Series

Budget Line

Agenda

■ Capacity Management - A Perspective

■ What does it look like?— Resource and RCCP Planning— Capacity Requirements Planning— Scheduling (Dispatching load and balance)

■ Summary / Questions

Capacity Requirements Planning

Pre-Requisites➔ Valid Resource and Routing Details➔ Resource set as Engineered / Cost Basis➔ Capacity Planning

➔ Demonstrated➔ Planned

➔ Capacity Planning Proccess Must be Easy

What does it look like?

Demonstrated Capacity

Average Historical Output Rate for a Resource■ It takes into consideration:

— Historical product mix & lot sizes— Planned & unplanned down times— The Oops factors

■ It is what a Resource has demonstrated it can achieve over time

Demonstrated Capacity

Why Do We Care?

■ Are you using Capable to Promise for order Promise Dates

OR,

■ Are you are just guessing about when you can deliver?

— Plan or schedule is not valid if it is not realistic and achievable

ResourceCapacity

Time

Operation Run Rate Setup(Engineered Capacity)

ResourceDemonstrated Capacity

(Target)

ReduceResource Efficiency %

Setup to Arrive at Demonstrated Capacity

ASCP Planning Engine Rounding

ASCP Planning Engine Rounds in Three Places1. When calculating Resource Rate per Primary Unit it is rounded to the

nearest 6 decimal places

2. When calculating the time required at the Resource for the batch it rounds up to the next highest minute

3. When returning the resource requirement time in the unit of measure used at the Operation the result is rounded to the nearest 6 decimal places

■ Affects Operation Rates greater than 99,000 units/hr

Demonstrated Capacity EBS / OPM

Planned Capacity

Planned Output Rate for a Resource■ It takes into consideration:

— Current product mix & lot sizes— Planned down times— Current Resource constraints

■ This is the Rate the Scheduler Plans for Resource over the short-term horizon— Based on what they know today……….

Planned Capacity Management

ResourceCapacity

Time

Resource Capacity Setup

ResourceDemonstrated Capacity

Planned CapacityAdjustment

Change ScheduledResource Capacity

Planning TimeFence

Trading TimeZone

Future

Planned Capacity in ASCP

Planned Capacity & Collections

Planned Capacity Requirements

■ It’s Got to be Easy

■ It’s Got to be simple

■ Leverage ASCP Functionality

■ Simulation is a must

■ Data must be current

■ Need to Retain history of what we have done

Need to do a small customization

Planned Capacity Made Easy

Resource Capacity Maintenance Spreadsheet

Planned Capacity Made Easy

Agenda

■ Capacity Management - A Perspective

■ What does it look like?— Resource and RCCP Planning— Capacity Requirements Planning— Scheduling (Dispatching load and balance)

■ Summary / Questions

Scheduling (Dispatching – Load and Balance)

MRP / CRP, Rev. 4.1

Pre-Requisites➔ Valid Resource and Routing Details➔ Resource set as Engineered / Cost Basis➔ Planned Capacity Set➔ Time Fence Definitions➔ Business / Priority Rules➔ MES Integration

What does it look like?

Navigation Slides for Scheduling

■ Resource

■ Horizontal (Capacity Preferences)

■ Resource Requirements

■ Order View / Resource View (Bottom)

■ Sequence and Validate within business rules

■ Create Schedule and release / Dispatch

Agenda

■ Capacity Management - A Perspective

■ What does it look like?— Resource and RCCP Planning— Capacity Requirements Planning— Scheduling (Dispatching load and balance)

■ Summary / Questions

Capacity Management

MRP / CRP, Rev. 4.1

Summary➔ Multi Tiered➔ Resource set as Engineered / Cost Basis➔ Planning Capacity Set➔ Time Fence Definitions➔ Business / Priority Rules➔ MES Integration➔ A Pre-requisite to CTP, S&OP➔ Mandate for Constraint or Optimized Planning

Summary / Questions

Contact Information

Dean Steiger:

dsteiger@signumgroup.com

614-638-8960

www.signumgroup.com

Mike Herald:

mherald@signumgroup.com612-845-3697

www.signumgroup.com