The beauty of APS and the power of scenario simulations
APS, Advanced Planning & Scheduling system, describes a software system developed to support techniques that deal with the analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods.
With advanced planning, we refer to the forecast of future activities regarding what to do in the medium and long term. While with advanced scheduling we refer to the planning of short-term activities.
Through advanced mathematical algorithms, this type of system supports the optimization and simulation of the five main components of APS: demand planning, production planning, production scheduling, distribution planning, and transportation planning.
The benefits of a well-integrated APS system are many, e.g.:
– Supply and demand planning optimization,
– Mitigation of supply chain disruptions risks,
– Reduction of supply chain costs,
– Increase visibility and synchronization of the overall business processes,
– The adaptability of the workflow in real-time to changes in demand or other variables is not easy to predict.
What-if Scenario Simulations
Among the basic requirements of an APS, there is the possibility to simulate what-if scenarios. This means, based on the collection of known data and hypotheses about what might change, making projections of what could occur and its different outcomes. “What if the demand globally would drop by 5%?” “What if our supplier gets in trouble and can deliver 25% less of what we need?”
Through simulations, it is possible to see the effects of these potential scenarios on the company’s demand and production plan and strategize on the proper response to each of these potential changes before and if they happen. Business management decisions become more effective, safe, and informed, and guide the team in case some of the potential scenarios effectively do happen.
The utility of a what-if scenario is clear: it allows us to build resilience in our supply chain. Today, in which our world continues to change even more rapidly than ever the ability to make predictions and simulations get you ready to rapidly react to the changed circumstances and win in the market. Optimizing decisions has become a vital factor for companies.
d-one plan: our APS system and its scenario simulation
d-one plan is our fully integrated APS system clearly linking demand and operations, on short medium, and long-term planning horizons, and allows for a simulation of different what-if scenarios to support management in understanding which scenario best suits the business need.
To be able to evaluate beforehand the impact of any strategic or tactical move, or changes in the business environment, and optimize strategies to reach the company’s goals, decision-makers need:
- optimized supply plans based on the latest demand insights, potential bottlenecks at suppliers or in production, and impact on inventory levels,
- reliable what-if analysis,
- all leading to more accurate financial forecasting.
Through the d-one plan functionality of scenario simulation, you can:
- Manage multiple versions of demand, inventory, and production plans,
- Have a different set of capacities & constraints for each version,
- Execute our production plan optimizer with multiple goals function,
- Compare various scenarios to tackle the challenges,
- Analyze the what-if scenarios impact.
So, now let’s have a look at how this d-one plan feature works.
Starting from the “planning table”, containing the active version of all the inputs of the planning (Customer orders, Demand, Purchase, Production, Stock, TargetStock, Days of stock, Shipment plan, Late/Early), you can generate infinite simulations before finalizing the final (and deemed to be the most probable baseline) version.
This simulation activity is possible on both monthly (S&OP) and weekly (MPS) planning and infinite simulated versions can be saved, which will constitute an important database of information.
You will be able to forecast up to 24 months and also simulate the financial and revenue impact of different possible scenarios.
All this information, in the form of accurate and effective analysis reports, will be the basis for short, medium, and long-term outlooks and guide the management discussion on how to get ready for the potential alternative scenarios.