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Advanced Planning Systems: Proactive or Reactive?. Ton G. de Kok School of Technology Management Eindhoven University of Technology. Contents. Basic principles of APS Proactive planning DAM: a new concept Comparison of APS and DAM Understanding the consequences Outlook. Plan. Plan.

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advanced planning systems proactive or reactive

Advanced Planning Systems:Proactive or Reactive?

Ton G. de Kok

School of Technology Management

Eindhoven University of Technology

Amsterdam 1999

contents
Contents
  • Basic principles of APS
  • Proactive planning
  • DAM: a new concept
  • Comparison of APS and DAM
  • Understanding the consequences
  • Outlook
scope of presentation

Plan

Plan

Plan

Plan

Plan

Plan

Plan

Plan

Plan

Plan

Plan

Plan

Scope of presentation

A Supply Chain

. . .

Source

Make

Deliver

Customer & Supplier

Customer & Supplier

Customer & Supplier

basic principles of aps
Basic principles of APS
  • Demand forecast
  • Availability checking
  • Capacity checking
  • No support for coping with demand uncertainty
  • Black box (LP-based with collection of heuristic add-ons)
  • Rolling schedule approach
rolling schedule approach
Rolling schedule approach

At the start of every planning cycle

  • Update all input variables
    • actual inventory levels
    • actual orders outstanding
    • actual demand
  • Forecast all exogenous variables
    • customer demand for items
  • Solve a deterministic optimization problem
  • Generate all immediate order- release decisions
proactive planning
Proactive planning
  • Proactive implies anticipation with respect to unexpected events
  • Unexpected events are
    • actual demand differs from forecast
    • actual lead time differs from planned lead time
    • actual yield differs from planned yield
  • Time and quantity buffers not endogenous to APS concept but exogenous, i.e. user-defined parameters
  • Unexpected events are dealt with through periodic replanning

APS is reactive!

demand availability management a new concept for material coordination
Demand Availability Managementa new concept for material coordination
  • Demand forecast
  • Availability checking
  • No capacity checking
  • Supports allocation of safety stocks
  • Supports (automates) rescheduling
  • Concept requires fundamental rethinking
tv supply chain
TV Supply Chain

cabinet

tube

TV

chassis

IC

dam concept features
DAM concept features
  • Qualitative
    • Provides insight into interaction between decision taken at different points in time and different links in the chain
    • Reallocation of availability upon changes in receipts and demand
  • Quantitative
    • Generalized ATP based on Supply Chain constraints
    • Early warning signals through time-dependent stockout probabilities at MPS level
dam concept features1
DAM concept features
  • Calculation of optimal (time or quantity) item buffers, given
    • supply chain structure
    • product structure
    • lead time structure
  • Calculation of optimal item availability performance
  • Extremely simple logic
    • base stock levels
    • allocation rules
comparison of aps and dam

1

2

1

3

4

Comparison of APS and DAM

target fill rate

95%

common

component

understanding the consequences
Understanding the consequences
  • APS logic yields optimal plans with respect to the model defined
    • material constraints
    • resource constraints
  • and the estimates made
    • demand
    • lead times
  • APS logic yields suboptimal plans with respect to actual demand and actual lead times
  • DAM provides a first attempt to plan complex material flows proactively, taking into account demand uncertainty
outlook
Outlook
  • Development of DAM prototype
  • Implementation in a pilot environment
  • Learning cycles concerning
    • interactive planning
    • early warning signals
    • supply chain design
  • Research aimed at incorporation of
    • lot sizing
    • finite capacity