Home: Issue 5 2011 › Lead Story › The proof of the pudding
The proof of the pudding
04/07/2011 | Channel: E-Business / IT
Planning for tomorrow, scheduling for today by Graham Hackwell
The integration between long to mid-term forecasting, and short term production planning and scheduling is an important consideration for many manufacturers. When you produce over 20 million individual items per week of just one of your many and varied product lines, in a highly seasonal business, and supply these to all the major food multiples, it’s nothing less than essential. Such companies typically rely on not just one but a number of specialist manufacturing IT solutions to deliver the complete spectrum of visibility and control required. And as with any set of interconnected system, the whole is only as strong as the weakest link.
Welcome to the world of Aunt Bessie’s, part of the William Jackson Food Group, which has rapidly grown since its launch in 1995 and whose products are bought by over half of all UK households every year. While the products that the company makes are not complex in and of themselves, their sheer scale and variety create a significant interconnected series of forecasting, planning and scheduling challenges. Starting with raw ingredients such as oil and flour, these are all held on site and ordered in bulk but used at very different rates, depending on seasonality. Packaging materials such as cartons, film and outer wrappings are of course subject to the same seasonality but these are held in a small holding store and then brought in on a day before basis. Other ingredients such as defrosted fruits are called in as and when required. Aunt Bessie’s operates on a ‘produce on Day One for delivery on Day Two’ basis but given that a significant percentage of the company’s products are frozen, it makes use of a third party warehousing facility to maintain three weeks of stock across its product range to help smooth supply.
In terms of actual production, Aunt Bessie’s is split into two zones. Zone One is relatively straightforward while Zone Two is much more complex because despite only handling 20 per cent of the product range, it creates 80 per cent of the difficulties. Chris Buckle is supply planning manager at Aunt Bessie’s and he outlines the crux of the company’s forecasting, planning and scheduling challenges: “At the heart of our business is the need to balance inventory management with smoothness and efficiency of production. Each has significant cost implications if we get it wrong.”
He goes on to explain why this is the case: “When it comes to inventory, most of our products have a 12 month shelf life yet the major multiples will only accept products
with at least nine months shelf life remaining. In reality this means we have a 12 week window in which to make and sell exactly the right amount of product. Ideally inventory management requires us to work on a just-intime (JIT) basis. However, to get the best from our production facilities we need a smooth flow of product through the factory, which ideally means batching as many orders together instead of making many smaller orders. This is not just down to managing complex setup, clean down and change over times but because many products cannot physically be produced at the same time.”
Unsurprisingly, this relies on perfectly aligning the company’s long term forecasting, and short to medium term planning and scheduling requirements. The company uses Futuremaster for its long term forecasting solution which gives a rolling 12 month forecast, updated monthly, based on historical sales and consistently reviewed data from sales promotions. Mid to short term planning was historically handled by a combination of the company’s aging SKEP planning system, MFG Pro Enterprise Resource Planning (ERP) system, and several cumbersome spreadsheets. Chris describes the planning capabilities of SKEP as, “very straight forward showing at best a crude weekly plan and offering no real visibility of what was actually happening in terms of actual production versus the manually projected plan.”
Aunt Bessie’s was already growing concerned about the age, reliability and unwieldiness of its SKEP system when a decision was taken to replace its existing ERP system with a more modern QAD solution. Chris comments: “This was a key driver for us towards Preactor because in addition to worries about the consequence of a system failure with SKEP, we wanted a modern planning and scheduling
solution that would work smoothly with QAD.” A decision to invest in Preactor and work with long-established Preactor partner Kudos Solutions was therefore taken, which began with Chris creating a master database by SKU which identified a range of factors including parent child groups, speed of production, the number of people required to run the line, and the best running pattern – i.e. which products will it run/not run with. After this was fed into Preactor, Chris then worked closely with Jeff Johnson of Kudos to map out exactly how each line was planned.
The QAD/Preactor system went live in September 2010 and now provides Aunt Bessie’s with seamless visibility of its long term forecasting right down to detailed production planning and scheduling to help it achievethe best balance between managing inventory and achieving production efficiency. Short-term planning and scheduling now provides detailed information for a rolling five-week period where every product is in the correct order along with the associated running pattern and production group information. Mid-term planning extends from five weeks out to 13 weeks and contains all the correct products but not necessarily in the correct finalised sequence. Long-term planning/forecasting has taken the longest to achieve but now the company has a rolling 12 month forecast/plan which is so accurate and brings such visibility that contract materials purchasing can be based on it bringing the company better value contract pricing while also ensuring it only orders the raw materials it needs.
This increase in visibility is a consistent benefit across many areas of the company as well as at an overall business level, as Chris explains. “In many ways, Preactor is already helping drive process change within the company about how we best run the lines.” He continues: “The increased visibility from Preactor has also helped us to respond quicker in a number of ways, especially when we have a problem on a line. Now we can see much more quickly when a problem occurs as well as investigate various different scenarios for dealing with it. It also means we canimmediately amend what stock we are/ aren’t needing to move into our short-term holding area thus minimising costs and optimising space. Better visibility of stock by product group also helps with capacity planning which helps bring storage efficiency cost savings. Furthermore, for the first time ever, planned maintenance is now taken into consideration into the plan.”
Perhaps the most significant benefit is the change in attitude that Preactor has brought. “Now we are focused not on ‘can we make it’ but ‘how can we make it better,’” concludes Chris. “There is so much more that I know Preactor can do. And the more you understand what it can do, the better it helps you work and stops you making mistakes. Even at a business level, Preactor is starting to bring the planning and operations functions together and as each sees the impact of decisions by the other, it is telling us more than ever how best to run our lines and in turn, our business.”
Graham Hackwell
Graham Hackwell is the Technical Director of Preactor International. He has been responsible for the development of Preactor since its inception in the late 1980’s through to its current position as a world leader in planning and scheduling software.
Preactor International
Preactor International is a world leader in production planning and scheduling software used by a wide range of businesses. Frequently integrated with ERP, MES and supply chain management solutions, Preactor’s breakthrough technology is used by more than 3500 small, medium and large multinational companies located in 69 countries.
For further information visit: www.preactor.com
Welcome to the world of Aunt Bessie’s, part of the William Jackson Food Group, which has rapidly grown since its launch in 1995 and whose products are bought by over half of all UK households every year. While the products that the company makes are not complex in and of themselves, their sheer scale and variety create a significant interconnected series of forecasting, planning and scheduling challenges. Starting with raw ingredients such as oil and flour, these are all held on site and ordered in bulk but used at very different rates, depending on seasonality. Packaging materials such as cartons, film and outer wrappings are of course subject to the same seasonality but these are held in a small holding store and then brought in on a day before basis. Other ingredients such as defrosted fruits are called in as and when required. Aunt Bessie’s operates on a ‘produce on Day One for delivery on Day Two’ basis but given that a significant percentage of the company’s products are frozen, it makes use of a third party warehousing facility to maintain three weeks of stock across its product range to help smooth supply.
In terms of actual production, Aunt Bessie’s is split into two zones. Zone One is relatively straightforward while Zone Two is much more complex because despite only handling 20 per cent of the product range, it creates 80 per cent of the difficulties. Chris Buckle is supply planning manager at Aunt Bessie’s and he outlines the crux of the company’s forecasting, planning and scheduling challenges: “At the heart of our business is the need to balance inventory management with smoothness and efficiency of production. Each has significant cost implications if we get it wrong.”
He goes on to explain why this is the case: “When it comes to inventory, most of our products have a 12 month shelf life yet the major multiples will only accept products
with at least nine months shelf life remaining. In reality this means we have a 12 week window in which to make and sell exactly the right amount of product. Ideally inventory management requires us to work on a just-intime (JIT) basis. However, to get the best from our production facilities we need a smooth flow of product through the factory, which ideally means batching as many orders together instead of making many smaller orders. This is not just down to managing complex setup, clean down and change over times but because many products cannot physically be produced at the same time.”
Unsurprisingly, this relies on perfectly aligning the company’s long term forecasting, and short to medium term planning and scheduling requirements. The company uses Futuremaster for its long term forecasting solution which gives a rolling 12 month forecast, updated monthly, based on historical sales and consistently reviewed data from sales promotions. Mid to short term planning was historically handled by a combination of the company’s aging SKEP planning system, MFG Pro Enterprise Resource Planning (ERP) system, and several cumbersome spreadsheets. Chris describes the planning capabilities of SKEP as, “very straight forward showing at best a crude weekly plan and offering no real visibility of what was actually happening in terms of actual production versus the manually projected plan.”
Aunt Bessie’s was already growing concerned about the age, reliability and unwieldiness of its SKEP system when a decision was taken to replace its existing ERP system with a more modern QAD solution. Chris comments: “This was a key driver for us towards Preactor because in addition to worries about the consequence of a system failure with SKEP, we wanted a modern planning and scheduling
solution that would work smoothly with QAD.” A decision to invest in Preactor and work with long-established Preactor partner Kudos Solutions was therefore taken, which began with Chris creating a master database by SKU which identified a range of factors including parent child groups, speed of production, the number of people required to run the line, and the best running pattern – i.e. which products will it run/not run with. After this was fed into Preactor, Chris then worked closely with Jeff Johnson of Kudos to map out exactly how each line was planned.
The QAD/Preactor system went live in September 2010 and now provides Aunt Bessie’s with seamless visibility of its long term forecasting right down to detailed production planning and scheduling to help it achievethe best balance between managing inventory and achieving production efficiency. Short-term planning and scheduling now provides detailed information for a rolling five-week period where every product is in the correct order along with the associated running pattern and production group information. Mid-term planning extends from five weeks out to 13 weeks and contains all the correct products but not necessarily in the correct finalised sequence. Long-term planning/forecasting has taken the longest to achieve but now the company has a rolling 12 month forecast/plan which is so accurate and brings such visibility that contract materials purchasing can be based on it bringing the company better value contract pricing while also ensuring it only orders the raw materials it needs.
This increase in visibility is a consistent benefit across many areas of the company as well as at an overall business level, as Chris explains. “In many ways, Preactor is already helping drive process change within the company about how we best run the lines.” He continues: “The increased visibility from Preactor has also helped us to respond quicker in a number of ways, especially when we have a problem on a line. Now we can see much more quickly when a problem occurs as well as investigate various different scenarios for dealing with it. It also means we canimmediately amend what stock we are/ aren’t needing to move into our short-term holding area thus minimising costs and optimising space. Better visibility of stock by product group also helps with capacity planning which helps bring storage efficiency cost savings. Furthermore, for the first time ever, planned maintenance is now taken into consideration into the plan.”
Perhaps the most significant benefit is the change in attitude that Preactor has brought. “Now we are focused not on ‘can we make it’ but ‘how can we make it better,’” concludes Chris. “There is so much more that I know Preactor can do. And the more you understand what it can do, the better it helps you work and stops you making mistakes. Even at a business level, Preactor is starting to bring the planning and operations functions together and as each sees the impact of decisions by the other, it is telling us more than ever how best to run our lines and in turn, our business.”
Graham Hackwell
Graham Hackwell is the Technical Director of Preactor International. He has been responsible for the development of Preactor since its inception in the late 1980’s through to its current position as a world leader in planning and scheduling software.
Preactor International
Preactor International is a world leader in production planning and scheduling software used by a wide range of businesses. Frequently integrated with ERP, MES and supply chain management solutions, Preactor’s breakthrough technology is used by more than 3500 small, medium and large multinational companies located in 69 countries.
For further information visit: www.preactor.com