August 2nd, 2012 plan4demand

SUPPLY PLANNING LEADERSHIP EXCHANGE PRESENTS:

The web event will begin momentarily with your host:

Does your SNP Plan position you for success?

What is SNP?

Thinking about SNP Engine Selection

Summary of Options for Consideration

2

Demand

(Unconstrained

market demand) New Product

his

tory

PL

M

Demand Management

Supply (Constrained

product availability)

Cap

acit

y

Tra

nsp

ort

atio

n

Inventory

Supply Planning

Supportable

Demand

Orders Shipments

Allocation Supportable Plan

Order Fulfillment

S&OP

Logistics & Fulfillment Planning

SAP/APO/DP SAP/APO/SNP

SAP/ECC

4

Road Map to Supply Chain Optimization

Road Map

to SNP

Standalone

Training

Environment

Plan for

Role

Changes

Master Data

Strategy

Operational

Solver

Selection

Decision

Business

Process

Transform

ation

Decisions

Governance

in Place

Reporting &

Alerts

Strategy

Robust

Technical

Environment

Many Places to Stumble

Neglect 1 & Progress Slows

Change Management

How far along are you in your Supply Chain

Optimization journey?

Make your selection on the right side of your screen

Select all that apply

5

A. Roadmap to SNP

B. Operational Governance Body

C. Operational Master Data Strategy

D. Reporting and Alert Strategy

Supply Network Planning

Manufacturing Distribution Supplier

Demand

Planning

Unconstrained Plan

Lead Times Inventory Resource Capacity Storage Capacity

Optimize Plan

Integration

U

N

C

O

N

S

T

R

A

I

N

E

D

Plan

C

O

N

S

T

R

A

I

N

E

D

Plan

for

Review

Transfer Transfer

Planning Horizon

Supply Network Planning

Quality of data in and out of the

SNP Planning Engine

Make your selection on the right side of your screen

9

1. Is the demand data feeding SNP reliable?

2. Do you feed your SNP Plan to a shop floor planning solution?

3. Do you feed your SNP Plan back to Demand for further

analysis?

4. Schedule adherence to the SNP Plan is high?

10

Lot size, rounding value Unit Storage cost

Run conditions Number of time periods Number of compatibles

Number of components

External/Internal or both Demand rates Yield

Process Logic

Material flow

Internal Space or location Logic

External Storage used when necessary & cost efficient Calculation of total cost & performance measures

Multidimensional binary or golden section search Change in Storage Capabilities Test for improvements Results used as Starting conditions in next iteration Repeated iterative process until improvement

Total Cost

Optimal Storage Capacities Return product Disposable parts Repairable parts New parts Finished parts Remanufactured product

Cost breakdown Internal Storage cost Reconfigured cost External Storage cost

Space Optimization

User Input Simulation Optimizer Output

We Can Fine Tune Control

10

Heuristics

Plans with a Macro approach stepping through the Supply

Network

Groups all demands for a given product at a location

into one demand bucket

Processes each planning location sequentially to

determine sourcing requirements

Infinite capacity over the medium to

long-term horizon

11

End user Effort

High Medium Low

Set up E

ffort

High

Medium

Low

X

Capable to Match (CTM)

Matches demand to available supply via production capacity and

transportation capability checks

Executes a multi-level, finite planning of the demands

in your supply chain using prioritization

Considers constraints on production capacities,

transportation capacities, storage capacities

Takes into account alternative production locations and

sources of supply (locations, production

process models, and external

procurement relationships)

12

X

End user Effort

High Medium Low

Set up E

ffort

High

Medium

Low

Optimizer

Plans at the lowest level of detail

Optimizer offers cost-based planning

Searches through all feasible plans in an attempt to

find the most total cost-effective solution

Many different methods of optimization

Linear

Discrete

Aggregated Plan – Vertical / Horizontal

Prioritization

Incremental

Decomposition

13

End user Effort

High Medium Low

Setu

p /

Da

ta

Eff

ort

High

Medium

Low

X

Heuristics “Smart” logic that creates the requirements plan across the supply

chain model

SNP Optimizer Cost-based optimizer that takes cross-plant resource and material

availability into account

Optimal Cost

Configuration

A configuration of the optimizer where actual costs are modeled,

including the penalty for non-delivery cost

Optimal

Service Level

Configuration

A configuration of the optimizer where the non-delivery cost is set to

a very large amount, storage costs are modeled and other costs are

small in comparison

CTM

Capable-to-Match:

An order-based planning method that takes production capacity into

account; uses pegging

15

Solv

er

Capabilitie

s

Heuristics

• Un-constrained

• MRP Like

• Capacity leveling

Capable to Match

• Feasible solution

• Matches demand to supply via production and transportation capability

Optimizer

• Best in Class

• High customization

• Short Product Lifecycles / Shelf life

• Thin Margins

• High demand volatility

Jog

Run

Sprint

Industry Champions

• Hi-Tech

• CPG

Industry Champions

• Process Industry

• Aerospace

16

SNP Solver Comparison

Optimizer:

Fully Mathematical Model based on LP

techniques using cost and time variables for

Production, Storage, Transportation and

Procurement

Extremely useful for bottle neck optimization

CTM:

Excellent solver resource constrained and

prioritization

Heuristic:

Excellent solver for entire network (i.e. MRP

like) unconstrained modeling

Exceptionally constructive for new

implementation to optimize entire network

Optimizer:

Very time consuming and CPU intensive

Analyzing of results is tedious

CTM:

Sequential approach to allocation

Variant configuration products have

challenges

Heuristic:

Less precision

Calculates discrete node and requires

Multi step planning process

Need to do subsequent resource leveling

using constraint modeling

Strengths Considerations

18

August 22nd Demand Planning Leadership Exchange:

Developing a Demand Classification Matrix

September 12th S&OP Leadership Exchange:

S&OP Technology A tool, or a strategy?

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