IFE | Sophisticated planning with SAP SCM APO
Reliable scheduling. Optimal production capacity utilization. Controlled stocks.
Complex projects and products as well as increasing individualization - the everyday life of a project manufacturer includes not only a high number of variants but also the short-term consideration of customer wishes and many technical and organizational changes, especially during the ongoing project. IFE CR, a.s. wants to master this increasingly demanding planning in the project business in the future and has therefore, together with CONSILIO, introduced an integrated solution consisting of SAP ERP and SAP SCM APO.
Implementation Highlights
Optimization of the confirmation process for new projects with testing of available components and production capacities
Establishment of a system-supported confirmation process for order changes
Integrated solution for parallel availability requests and simulations
Consideration of not yet specified projects in capacity planning
Mapping of collective orders based on PSP elements in the planning system
Generation of feasible and optimized production plans over the entire planning horizon
Compliance with finite capacities for machines, personnel and production resources
Consideration of personnel suitability for special work steps
Increased productivity through optimized set-up sequences
Balanced machine utilization by using alternative production methods
Status before project start
In addition to uncompromising quality and a consistent drive for innovation, reliability in honouring commitments and flexibility in meeting short-term customer requests have brought Knorr-Bremse and the IFE division to the leading position it holds today. However, IFE recognised that the existing processes and systems were no longer able to meet the constantly increasing demands. There were major challenges, particularly when it came to deadline enquiries, meeting deadlines and planning complex production processes. A joint project was therefore launched based on the door production of IFE CR at the Brno (CZ) site.
‘We have been working with CONSILIO for many years,’ explains Jörg Ortwein (Knorr-Bremse IT-Services GmbH), ’and know and appreciate the IT company. CONSILIO is a reliable and competent partner.’ He adds: ‘Because the business environment and the current system landscape require in-depth knowledge - both of the industry and the technical possibilities.’
A tricky project was born. In Brünn, door panels for rail vehicles are produced, among other things, consisting of individual project production and individual customer production. This requires 7 production stages with an average of 60 steps to be processed. In addition to complex order networks in production, the high number of purchased components plays an important role. Special accessories sometimes have delivery times of up to 6 months. An additional challenge is to correctly integrate and control various service providers in the processing. Due to long throughput times and long lead times, planning of around two years is required.
In addition, there is a large variation in the technical specifications of the products and the required production technology. The result: high fluctuations in capacity utilisation (largely dependent on the composition of the order backlog); drawings and technical specifications are often only available at a late stage and are always subject to short-term changes (sometimes even during ongoing production). This exacerbates the situation. Changes have to be reworked and subsequent steps have to be taken into account. The customer's wishes and the greatest possible flexibility take priority - which is why the previously defined production process sometimes has to be changed.
We know and appreciate CONSILIO from many years of co-operation as a reliable and competent partner who knows our special business environment and our system landscape very well.
The process before the start of the project was initially only based on throughput scheduling, i.e. the MRP result and the material availability of the purchased components - without taking available production capacities into account. Changes to orders that have already been confirmed, which account for a much higher proportion than new projects, have hardly been supported by the system to date.
‘The precise checking of available capacities with the previous tools in SAP is a heavy workload. The actual production planning takes place outside the system. The planners mainly work with Excel and do not feed their results back into SAP,’ says project manager Vratislav Stastny (IFE CR), describing the current situation at the start of the project. However, reliable statements about available production capacities require a feasible and consistent plan - preferably in an integrated system. ‘It was hardly possible to simulate and analyse changes in production orders or customer requirements. The same applies to the impact of changes on the current availability situation of material and capacity,’ explains Stastny.
Challenges for the future
‘We expect a significant increase in the number of projects,’ says Stastny, describing the business expectations for the next five years. He adds: ‘The composition of the order backlog is shifting more and more towards more complex products. We also expect an increasing individualisation of end products. Supplementary services will also gain in importance.’
There are also plans to carry out various external processes (such as painting) in-house. In addition, other services related to the product (such as maintenance and repairs: RailServices) will also have to be included to a greater extent in capacity planning in the future.
‘All in all, this means that our planning requirements are becoming increasingly demanding. We want to equip ourselves for this with new, more efficient planning tools,’ summarises Stastny.
Business requirements and project goals
The requirements and the project goals derived from them can be roughly categorised into two main processes. Firstly, deadline confirmations (based on available resources) are secured:
- Reliable deadline statements, on-time delivery and thus high customer satisfaction
- Necessary deadline confirmations even before technical specification of the project
- Simulation of the availability of components & capacity before confirming deadlines to the customer
- Securing availability for new projects or orders and order changes
- Parallel availability simulations with temporary reservations of material & capacities
Our key figures show that the turnover rate of material in production has increased significantly since the introduction of APO. As a result, the dwell time and the stock in circulation have been reduced by 50%.
On the other hand, it is about realistic plans taking into account capacities and the necessary prerequisites for a reliable schedule statement and assessment of availability. This is reflected as follows:
- Realistic and optimised plans with a specified sequence for production
- Planning of both machine capacities and personnel
- Consideration of production resources and personnel suitability
- Even utilisation of production capacity (through the use of alternative production routes)
- Increasing productivity and reducing set-up times
- Shortening material throughput times and thus reducing work in progress
- Increased transparency of production across all production stages (in compliance with order networks)
Specific challenges and goals achieved
1. Commitments
One of the most important requirements is to honour customer commitments - especially confirmed deadlines. They should not be postponed due to later incoming requirements. The plans generated must therefore remain stable. This is ensured by prioritising orders that have already been confirmed over unconfirmed orders and by fixing the planning material flow of the associated order networks. In this way, IFE secures its position as a reliable partner in meeting deadlines right from the planning stage in an increasingly demanding market environment.
2. Simulating
Statements about technical feasibility, costing and delivery dates must be made as early as the project enquiry stage, even if detailed planning (e.g. about capacities and material availability) is not yet possible at this time. Even after successful completion, technical specifications are often only available at a relatively late stage. The reservation of capacities and materials in the overall planning is solved via simulative requirements for special substitute projects, which initially have no effect on operational planning and are only replaced when the actual order is assigned.
Even after the specific details of a project or in the event of changes, a simulation requirement is first taken into account in the overall optimisation. The planning result is used as the basis for a schedule confirmation. ‘Securing confirmed deadlines for new orders and order changes would previously have been unthinkable to this extent,’ says Petr Kalouda (Scheduler IFE CR), comparing the new solution with his old approach.
3. Productivity
In addition to customer satisfaction, costs and efficiency play a key role in production. APO offers various options for increasing productivity and evenly utilising production capacity. IFE uses the generation of set-up-optimised sequences and the utilisation of alternative production routes. However, the required set-up matrix is very large for some systems and it is hardly possible to restrict it to a few relevant criteria. CONSILIO has therefore realised automatic generation. ‘This approach has reduced the maintenance effort to a manageable level,’ says Stastny, praising the solution, adding: ’We save between 10% and 15% of the set-up time in the optimised order sequences for both the CNC machines and the presses.’
4. Stocks in circulation
In addition to productivity, the control and reduction of work in progress is another important objective. Throughput and idle times are key influencing factors. It was therefore essential to correctly map realistic transition times and the overlap in production (both within individual production stages and across all stages).
To avoid unnecessary idle times and premature scheduling, CONSILIO parameterised the optimiser used accordingly. ‘This in particular required a number of tests until we found the right setup,’ says Stastny, describing the joint evaluation of the optimisation results. ‘Ultimately, the current settings now reflect our business requirements in the best possible way.’ ‘Our key figures show that the turnover rate of material in production has increased significantly since the introduction of APO. This has reduced the dwell time and the work in progress by 50%,’ confirms Stastny. ‘This value has remained stable at the same level ever since. This cannot be observed in areas without APO planning.’
5. External partners
External partners are a particular challenge in the logistics chain. In the case of IFE, in addition to the suppliers for purchased materials, these are several external processors for various steps. On the one hand, the planning throughput times for external processing and, on the other, the planning deadlines that had already been confirmed had to be taken into account. The tried and tested procedure of fixing external work steps for the confirmed delivery date of the external processor was used here.
6. Transparency
Many dependencies and changes arise in the order network. It is therefore crucial to monitor all activities within the supply chain during the course of the project in order to counteract possible delays at an early stage. CONSILIO has the standard in the right places for complete transparency in APO. ‘The overview of the order networks and the capacities occupied by them alone represents a huge advantage over the old solution,’ explains Kalouda. CONSILIO's many years of experience from other projects with project and individual manufacturers helped here. This enabled the necessary extensions to be implemented quickly and precisely to meet IFE's requirements.
‘We now have all the relevant data in one integrated system,’ explains Kalouda. ‘This is the necessary basis for making reliable statements about capacity and material availability.’ He adds: ‘The optimisation result and all plan adjustments are transparently available to all applications in the system. This enables a reliable forecast of future capacity requirements at work centre level - which is also important information for our personnel planning.’ ‘Our detailed planners and production controllers have discontinued their previous Excel planning and now use APO planning as a guideline,’ confirms Kalouda. ‘This gives us a realistic picture of the actual capacity utilisation.
The overview of the order networks and the capacities occupied by them alone represents a huge advantage over the old solution.
The result
With the introduction of the new planning solution, IFE is ideally equipped for future challenges. Confirmed customer deadlines are based on feasible plans - even with an increasing number of new projects or project changes thanks to the system support. Possible changes or scheduling conflicts are clearly visible and can be dealt with at an early stage. The cost side is under control thanks to higher productivity and lower work in progress. This will enable IFE to maintain its ‘best-in-class’ position in terms of reliability and customer focus.
CONSILIO successfully implemented the extensive requirements for the planning processes and their technical mapping in SAP SCM APO within the set time frame and budget. All business objectives were achieved in full.
