PRIMARY FEATURES AND
FUNCTIONS
Functional Questions
The planners of the future
will address most business
questions with models that
answer basic questions about
capital spending, resource
planning, strategy analysis,
and manufacturing and
logistics scheduling.
Sourcing
The sourcing question
evaluates where to purchase
raw
materials, manufacture
products, and determine the
ship-from location for
different customers to
satisfy
orders. Least-cost-to-serve
models enumerates all the
possibilities and
determine the lowest cost
routing considering
raw material supplier, mode
of shipment for raw
materials, manufacturing
location, mode of shipment
of products, and stocking
locations.
Sourcing models can be run
in either a constrained or
unconstrained. A constrained
model takes existing
facilities and loads them up
based on the least cost. An
unconstrained model finds
the least cost routing and
continues to load them up,
indicating where additional
capacity should be
added to meet demand at the
lowest
cost facilities.
Capacity Planning
Another opportunity is to
defer capital when designing
and building a manufacturing
plant. Typically, the forecasts
for the next five years are
used to decide on the
capacity of a new factory.
The capacity is set based on
the fifth year numbers. It's
not uncommon that multiple
products are slated for the
plant and the forecasts
for each of the products is
projected out for the five
years.
However, it's almost certain
that mix will change and
the total forecast will
change.
Modern APS tools will
explicitly model all unit
operations
and the routing of the
product mix through
the work centers. The
results would project when
individual
unit operation capacity
needs to be expanded over
the same five-year
period. As the forecasts
change different
pieces of equipment might be
needed or be delayed
when some forecasts don't
materialize.
Outsourcing Evaluation
Outsourcing parts
manufacturing is becoming
increasing
popular. This option
provides additional capacity
on short notice, a shorter
lead time in ramping up for
a
new product launch, and a
lower level of risk for
unpredictable
market demand. Models will
be built to compare
the initial capital costs of
setting up for production
and the incremental
production costs.
Regression Analysis
Regression analysis will be
employed to help determine
the contributing drivers on
critical business issues
like
customer service,
forecasting, and costs and
profits.
Regression analysis takes
numerous potential related
variables and acquires data
on these variables to determine
relationships between the
variables and the results.
The degree of relationship
is quantified and those
variables
that have negligible
contribution are dropped.
Communication
APS has only limited value
unless data is fed into the
models
in a timely way. Advanced
communication techniques
are a natural fit with APS.
Every available technique
will be
used to automate and
expedite the collection of
data.
Continued