Despite the major cost-effectiveness and service benefits of a well-integrated Advanced Planning and Scheduling (APS) system, many businesses are falling short of the mark as staff do not possess the necessary skills mix needed to implement it effectively. This is according to Eddie Groom, Senior Consultant at global supply chain consultancy Crimson & Co.
The company conducted an in-depth review of the APS system market comprising assessments of planning processes across 100 companies alongside interviews with global supply chain leaders in May 2016. The research found that successful use of APS systems and associated processes can lead to as much as a 20% reduction in working capital, 5% increase in service levels, 6% reduction in logistics costs and 3% reduction in the cost of goods sold.
However, only 50% of the processes Crimson surveyed reached a Proficient rating, whereas 40% were only at Competency or below,* demonstrating some immaturity in the implementation of advanced planning and scheduling in modern businesses.
Eddie Groom commented: “Many supply chain leaders are beginning to recognise the huge business benefits that implementing a new APS system can bring; the dramatic boosts to cost-efficiency and service levels speak for themselves. That being said, we’ve seen how many APS systems quickly lose their fizz after the initial installation. Our research has revealed that in many instances, APS systems have not delivered high levels of process maturity."
“A key factor we’re seeing behind this efficiency deficit is a lack of supply chain planning skills amongst employees. The planner role when using an APS system needs a richer mix of supply chain, financial and analytical expertise to understand the inherent trade-offs in modern planning decisions."
"This skills mix is fundamental in APS systems because APS systems are inherently all about managing business trade-offs. In many cases, it can be difficult to find those personnel who possess all of these skills. Compared with the traditional technical skills needed for ERP systems, a much more diverse range of abilities is now required,” Eddie stated.
For companies struggling to maximise the benefits of their APS systems, or lacking the expertise to use them at full capacity, Eddie recommends the following best practices to drive greater value from their systems:
- Benchmark your current processes against best practice to identify the gaps and then determine if these gaps are down to system functionality (unlikely) or poor practices (highly likely) and poor adoption levels (extremely likely)
- One of the reasons why APS systems do not work effectively is that the data model is not constructed for the system to use the data in the best way; review the data structure and hierarchy so it matches the levels you want to plan and report at
- Conduct cause analysis on those regularly performed workarounds to identify system issues and then tackle them
- Remodel the planning parameters: planning parameters should be reviewed on a quarterly to biannual basis to ensure that the system is planning as optimally as possible
- Retrain your planners, so they know how to assess, understand and improve system generated plans
- Conduct an audit of all the spreadsheets used and challenge why they are still in use
- Put in place mechanisms to monitor users’ opinions of the system and use this to shape future training
- Set up a continuous improvement team to further develop APS system functionality and usage.
“We have used these techniques across a variety of businesses and industries to improve people capabilities, improve performance and align system configuration to organisational needs,” Eddie continued. “Using these to the best effect ensures that an APS system delivers on its original promises made in the heat of the system justification phase."
“The evolution of supply chain planning systems is now in its third decade, and forward thinking companies are recognising that if they continue to only give their APS system a half-hearted effort, they risk losing competitive advantage and put their future supply chain in jeopardy. Employing best practices and building teams with the right skills to action them is the best strategy for boosting APS effectiveness in no time,” Eddie concluded.
* The processes assessed fell into one of four categories: Not Competent, Competent, Proficient and Mastery.