ERP vs. APS: Which is best for manufacturers?

Posted on 9 Aug 2021 by The Manufacturer

Planning and scheduling has always been at the core of manufacturers’ production processes. By arranging, optimising and controlling manufacturing workloads, firms can directly impact their ability to hit delivery deadlines, optimise inventory levels and meet customer service commitments. But for many manufacturers, their planning and scheduling activities and processes haven’t really changed all that much over the years. While most have moved away from antiquated offline charts and wall planners, many persist with spreadsheets, which are inflexible, slow, error-prone and static i.e. they often do not automatically update.

While off-the-shelf-software, spreadsheets in particular, might seem like a quick and easy option for production scheduling, they are simply not powerful enough for effective production management, leaving few opportunities to analyse and optimise.

Enterprise Resource Planning (ERP)

Now, some manufacturers have taken their production scheduling to the next level by implementing Enterprise Resource Planning (ERP) systems.

ERP systems are optimised for transaction processing, not large-scale high-volume data analytics. They evolved from accounting systems and are typically used for sales order processing and as a way to keep track of what has happened. While ERP solutions are definitely a step up from manual production scheduling and/or spreadsheets, they are not without their limitations — namely that planning and scheduling functionality is usually an afterthought.

In addition, because planning and scheduling functionality is not the main focus of ERP systems, it can be very difficult for manufacturers to configure. Doing so often requires assistance from the vendor, which will likely incur costs and still not fully achieve what the manufacturer wants. Even then, ERP systems often lack the ability to create accurate production schedules.

As a result, some manufacturers with ERP systems still rely on spreadsheets for their production scheduling. So despite investing significant sums in ERP solutions, manufacturers can find they still need to persist with spreadsheets. Does this sound like the most intuitive solution?

Discover how an international pharmaceutical manufacturing company is using Access APS software to boost productivity and increase capacity, as well as rationalise production: click here

*Image courtersy of Shutterstock

Advanced Planning and Scheduling (APS)

So what’s the answer? How can manufacturers move away from their reliance on spreadsheets for production scheduling once and for all?

One of the most effective ways is by implementing a dedicated Advanced Planning and Scheduling (APS) system.

APS systems are built from the ground up to specifically and effectively manage day-to-day scheduling, capacity planning & what-if analyses. 

With an APS solution, manufacturers can plan and schedule production based on available materials, resources and plant capacity. They can also quickly identify and compensate for production changes in real-time, minimising downtime and errors in the process.

Manufacturers can quickly and intuitively figure out the answers to production-related questions such as:

  • “What will the knock-on effect be of accepting this urgent order?”
  • “Is it cost effective to pay our staff overtime to complete this order?”
  • “When can we take this piece of equipment out of the equation for maintenance without impacting production?”

GANTT charts and visual schedules provide a view of the entire production planning process, allowing manufacturers to identify optimal start times, the most appropriate equipment to use, as well as the availability of personnel.

APS software can help overcome:

  • Manufacturing delays impacting delivery times
  • Missed opportunities due to demand exceeding capacity
  • Order errors as a result of excessive production
  • Inefficiencies caused by idle equipment
  • Excessive overhead due to managing scheduling changes and the impact on delivery schedule
  • Difficulties in planning for future capacity requirements

Car production line - image courtesy of Depositphotos.

*Image courtesy of Depositphotos

ERP & APS: A perfect match

It is important to note that APS solutions are designed not to cause issues with existing ERP implementations. But while the APS software sits independently of the ERP, the two work best when paired together.

While an ERP system can be used to see the impact of production change, such as a piece of machinery breaking down, or fulfilling a sudden rush order, it often takes time, multiple datasets, complex formulas and numerous spreadsheets to do so. 

With an APS solution, manufacturers can analyse multiple parameters, optimise and revise their production schedules in a matter of minutes, all the while leveraging visual representations. As a result, planning can be rescheduled without the need to run a new material requirement plan (MRP) within the ERP system, saving production planners both time and effort.

By identifying when materials are required and helping prevent over- or under-stocking, APS solutions help improve manufacturers’ cashflow and balance sheets. 

Finally, with a detailed overview of the production process at all times, finance directors and production managers can make informed decisions on whether to fulfill orders on a marginal cost pricing basis. If a business knows for certain it has machine idle time due to a lack of work, the FD can make pricing decisions with significantly more accuracy. This allows the company to take on lower-priced work to fill machine idle time and improve the contribution to fixed overhead. 

Furthermore, the reverse is also true; if you have total confidence in your production schedules, you know confidently when you can turn less profitable work away.

Typical APS features:

  • Drag and drop Gantt Charts
  • User defined planning algorithms
  • Multiple shift patterns
  • Scenario analysis
  • Shop Floor Data Capture
  • Complex processes easily created through the user interface
  • No programming required
  • Cloud-based, remote access via browser to the production schedule from any location
  • Simple for the Operator to understand daily, weekly, monthly schedule
  • Forwards and backwards scheduling
  • Remote access via browser to the production schedule from any location

APS solutions in action

For production managers, the benefits of implementing an APS solution are easy to appreciate. But what about the wider business benefits?

Having experienced steady growth and watched its operations become more complex, Dundee-based manufacturer Pacson Valves needed to improve its production planning and scheduling processes.

In what was later dubbed a ‘Year of On Time Delivery (OTD)’, improving OTD performance was made a strategic business goal. Pacson’s senior team knew that having the right digital platform in place would be key to helping the firm achieve this ambitious objective. Furthermore, any implemented solution would need to integrate and complement Pacson’s existing ERP system.

By implementing Orchestrate Advanced Planning and Scheduling software from The Access Group, Pacson were able to replace their outdated planning board with an online drag-and-drop Gantt chart. Thanks to its intuitive design, the new system was quickly adopted by the Pacson team.

Access Orchestrate has enabled Pacson to transform their OTD performance from an unpredictable 50%, to a reliable 90%.

In addition, more than 95% of orders are now delivered within one week. With a continuous and detailed review of any missed deadlines, performance at Pacson continues to improve. 

Speaking about the Orchestrate implementation, Pacson Valves commercial director John McLaren said:

“The new software has enabled us to remove various manual processes, including our planning board, which used to be at the heart of our operation. Orchestrate has enhanced our ability to anticipate and adapt and as a result we’ve seen a marked improvement in our delivery performance. Operating in the oil and gas sector, reliability and trust in our systems is essential – Orchestrate delivers the confidence our customers need.”

For manufacturers, the decision to implement an APS solution alongside an ERP system will hinge on whether extracting information from the former and then working with it in spreadsheets is a cost effective part of the production planning process. If there’s any doubt, an APS solution that complements the existing ERP system could be the answer.

Discover how Advanced Manufacturing (Sheffield) Ltd went from 67%-70% on-time in-full (OTIF) delivery a few years ago, to achieving an average now of 97% — and even 100% for some customers: click here

Find out more about Access Orchestrate Advanced Planning and Scheduling (APS) software here: