Changes in the business paradigm such as the networked economy, increasingly demanding customers and strong competition makes supply chain planning and scheduling challenging and complex. Customer demands for more options, more last-minute changes, precise delivery dates, shorter lead times, and quicker responses it makes knowledge and understanding of supply chain planning process critical for business education. Over the past 20 years, industry has evolved from an efficiency focused planning and scheduling logic such as material requirements planning (MRP) to customer-centric applications that offer greatly improved responsiveness and productivity. Optimizing productivity within individual facilities is not enough any more. Supply chain integration and synchronization requires consideration of inter-organizational resources and capabilities. It is important to create a supply chain that enables each of its participants to cooperate openly to:
- shorten throughput times;
- reduce stock to a minimum;
- improve product quality;
- provide more reliable delivery dates;
- coordinate global demand, supply, and production efficiently;
- lower costs over the entire supply chain; and
- continually re-engineer processes to be more responsive to customers and competition.
To resolve and accommodate for these conflicting objectives, many firms are looking to enhance and formalize their planning and scheduling processes.
One such information-based process is Advanced Planning and Scheduling (APS) software. APS is an information-driven model that can influence business processes, corporate cultures, as well as planning logic. As illustrated in the Figure below, APS forms the link of the extended enterprise with the end consumer. APS applies the requirements and capacity data from a combination of supply chain partners to enhance the forecasting, planning and scheduling capabilities of the extended enterprise. Such developments in the planning, forecasting and scheduling extending across broader supply chains functions including purchasing, manufacturing and logistics.
Software analysis firm AMR defines APS as an ‘umbrella technology’ that acts in the following ways:
- Considers material and plant resources simultaneously;
- Provides a modeling environment to incorporate constraints, business rules and goals in the planning process;
- Optimizes algorithms that incorporate business goals;
- Leverages memory-resident programs and databases to provide real-time plans and create and regenerate schedules;
- Supports real-time decision support with what-if analysis;
- Provides real-time ATP (available to promise).
Advanced Planning and Scheduling (APS), has been described in various trade journals and promotional literature as a planning process designed to assist firms create plans and schedules that consider system constraints. Much of the emphasis on the scope of APS has been established by the leading software product and consulting organizations. APS is characterized as a software tool to utilize data residing in ERP and manufacturing systems to develop better management decisions. Since the major focus of ERP applications is internal transactions, it often fails to incorporate information beyond the corporate entity. In addition, ERP applications typically do not provide useful information for decision support applications. Many ERP vendors are incorporating data warehouses building on their transactional data. These data warehouses are used to support various analytical applications such as Advanced Planning and Scheduling (APS), Executive Information Systems (EIS), or Decision Support Systems (DSS).
APS is a software approach developed to provide true constraint-based planning capability. The software in APS develops a plan, which considers a wide range of constraints to balance conflicts, and presents an optimum plan for consideration by the planner. The memory resident databases and the data replication technology are foundations of the APS system. APS applications are memory-resident, which means that business models are loaded in the memory temporarily for manipulation by specially designed algorithms for efficient solutions whereas ERP applications are stored in the traditional databases. APS tools enable planners to run a sophisticated what-if analysis to proactively determine the optimal response to any number of potential market changes. Added to that APS tools allow planners to quickly analyze the impact of customer order changes or production scheduling changes. The computer does not replicate the thinking process, but it can improve decision-making and strategy. For planners, APS quickly analyzes the implications of alternative decisions. By performing what-if simulation analyses, APS systems provide information about whether plans are reasonable or if they, for example, exceed resource constraints or result in inadequate performance.
Source: Closs, D. and Nair, A. 2002. Supply Chain Planning with Advanced Planning and Scheduling: Implications for Academia. 2002 CLM Logistics Educator’s Conference, San Francisco, pp.317-34