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Automated production planning: realize optimal efficiency and cost benefits

Image of Daniel Wenzl, Consultant at valantic Supply Chain Excellence, Automated Production Planning

5 questions for… Daniel Wenzl, valantic Consultant, about automated production planning

Hello Daniel, how, specifically, do companies benefit from planning solutions for automated production? This topic is currently under intensive discussion right now.

The automation of processes and tasks is playing an increasingly important role in helping companies be cost-optimized and quantitatively and qualitatively superior on competing markets. There are good reasons for this. The increasing variety of products and the associated complexity of the products are driving the desire for technological support. This is the only way companies can continue to plan high production volumes precisely and deliver profitably. We can see that SMEs in particular have not advanced far enough in the area of efficient product planning and production.

How can a company integrate automated production planning? What are typical stumbling blocks to avoid?

Automation of planning is possible on different levels. A first hurdle is to hand over decision-making and knowledge management to a less-than-transparent automation system. Experienced supply chain planners have mostly been involved in production planning for many years and have very detailed product knowledge. There is often a fear that it is impossible to collect planners’ accumulated knowledge in an algorithm. Most of the time, the information is not documented, and the required expertise is widely dispersed.

The key is not the algorithm used for automated planning, but the right approach. It must be clarified in advance which process components can be automated in order to offer planners the greatest possible assistance with their daily routine. In addition, the most important criteria for optimized production program planning have to be defined. Not every individual case and special case should be included in the optimization. Otherwise, the result will not help the planners, but paint an incomprehensible picture that inspires resistance.

Another stumbling block is “island optimization.” Automated planning primarily schedules individual, structured, simple tasks. However, an automated approach should always aim at optimized planning across the entire supply chain. This is the only way, for example, to optimize the ordering of purchased parts and the setup sequence on a special machine. For a person, the overall process is too complex with regard to the effects of order shifts and scheduling. This is where automated planning creates transparency and reveals efficiencies.

The algorithm for optimized planning seems to be an important but complex criterion. How might this look and become transparent?

Mapping all the details is usually not necessary and only leads to overly complex decisions. However, decisions for overall planning are always based on rules: from “when can which purchased part be ordered?” to “if product x was on the machine before, may product y follow it?” The decision-making criteria may be as complex as you wish, but they have to follow a strict rule.

Exceptions that do not follow a clear rule, however, have to be accepted by the planner himself. Here’s an example: an order is so important for the company that it is possible to deviate from cost-optimized lot sizes in order to enable faster processing. However, in order to reliably manage exceptions, the rest of the production schedule must be coherent. This is the only way to clearly determine the impact of a “rush order” will be on the rest of production.

A planner usually specializes in a process stage or a plant. Orders, on the other hand, often pass through different stages and across several planners. Doesn’t this contradict the concept of holistic planning, as you described earlier?

No, on the contrary. The transfer of the individual planning steps into overall planning is the decisive efficiency gain. Frequently, planners identify nearly identical processes on different levels and jointly identify the most efficient and best planning strategy.

If individual production stages are very different and sometimes run independently of each other, the individual stages are optimized as part of the overall planning. This results in a step-by-step optimization of the entire chain, which is done in two steps. The first step is to look at the overall production program including the suppliers. If there is now also sufficient buffer in the individual production stages, the second step can be, starting from the initial overall optimization, to optimize the setup and sequence on specific machines or workstations. Automated production planning works in a similar manner, but the results are achieved much faster.

What are the benefits of automated production planning for new technologies such as Industry 4.0 or the Internet of Things, which are already highly automated?

Industry 4.0 and similar advanced technology concepts have already paved the way to bring findings from research into companies and thus achieve great practical benefit for these companies. The return on investment (ROI) is usually very high. However, the real potential for annual savings through an improved supply chain often exceeds the initial investment costs many times over. Perhaps the greatest added value is the reduction of total throughput time across all production stages.

Planning managers can react early to problems and deviations in production and significantly reduce buffer times with forward-looking, comprehensive planning. Concepts such as robotic process automation (rpa) will penetrate the market further. Automated production planning is a future-proof platform that employs advanced technology and provides the planning speed necessary to react immediately to a very volatile future.

A starting point for this is waySuite. Automation and optimization modules such as wayOPT and wayDDO are also part of the comprehensive planning suite. They can be custom-tailored to the customer’s needs and include the structured implementation method. This enables companies to realize optimal efficiency and cost benefits.

Thank you very much for the conversation, Daniel!

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