Why is APS More Critical Today than a Decade Ago?
APS solutions have become more in demand by industries in recent years compared to the early 2000s. It's not just a question of the natural commercial growth that a product has as it consolidates on the market. We could even say that this type of growth is hampered by the reduction in the expressiveness of Brazilian industry in recent decades and the consequent shrinking of this consumer market. Perhaps the factor with the greatest weight in this account is the increased volatility of the supply chain caused both by extraordinary events, such as the pandemic, and by the more globalized profile of the market, with greater interdependence between economic actors, which means that a small oscillation on one side generates a big wave at other levels of the Supply Chain. Despite collaborative moves such as the CPFR or technologies that provide visibility in the chain, thebullwhip effect is a harsh reality. In other words, it's not an isolated case due to the pandemic. We're talking about a basic law of physics applied to the market. A system that increases and heats up in the long term brings with it this entropic characteristic of greater disorder and randomness. And this increase in entropy gives those who need to plan their production and stocks a headache. As if that weren't enough, we are also seeing a substantial increase in the volume of SKUs that industries have active, mass customization strategies, as well as a reduction in product life cycles (see fast fashion in the fashion industry and the increasingly frequent launches in technology, just to give some easy examples).This means that one characteristic of the industry is increasingly showing itself as a competitive differentiator: agility. And here we have a term that is difficult to measure financially. An entrepreneur can't compare the attractiveness of an investment in machinery with an investment in agility. However, at the same time, we know that it generates a better level of service, a lead time reduction which improves the company's cash-to-cash cycle (the difference between the outflow of cash for the purchase of raw materials and the inflow of revenue from customers) because we will get to our customers more quickly and will probably get paid sooner. Being more punctual and delivering faster than the competition may not be on the company's DRE, but it is a competitive advantage in most industries. APS APS(Advanced Planning & Scheduling) solutions are designed not only to create efficient plans (with reduced setups and waiting times), but also to update them and reschedule them very quickly in the face of changes, seeing the impacts throughout the production processes, over a future horizon that can be months. These changes can be in supply, production or demand. In terms of supply, our suppliers may fail to meet their delivery deadlines or deliver insufficient volumes of material. Production can also be affected by slowdowns, lack of manpower, maintenance and many other factors. Finally, demand can also vary greatly. It is quite normal for a PPCP department to receive an urgent demand from the commercial department and make changes to the production plan in the short term, but without identifying the real medium-term impacts of these changes on other products and processes. A robust APS solution will allow you to see this causality and quickly decide what to do, simulating scenarios and comparing them. While good demand planning can reduce surprises and bring more stability, on the other hand we have the naked truth: unpredictable events and products (items with low forecastability) will exist and, in many cases, will increase. As Mike Tyson said: "Everyone has a plan, until they take the first punch in the face." The good fighter is the one who reacts quickly with a new plan, before getting knocked out.
And how can NEO help your industry?
NEO Production Engineering is a Siemens Smart Expert Partner and offers solutions with business analysis and implementation of APS software. We have created a new concept that values cutting-edge technology and technical excellence, while at the same time believing in human sensitivity, creative work and a personalized and committed relationship.Contact us using the form below or via WhatsApp to find out more about our solutions and arrange a personalized analysis for your business needs.Sequence your production with a specialist in technological solutions.