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The Quintiq APS suite can do great things to a company's supply chain performance, but not all companies are ready to use an advanced planning & scheduling (APS) tool, or not on all levels. The A in the APS acronym suggests that it is an advanced tool, which is relying on basic systems and processes to be in place and working well. In this post, we will discuss four main elements of operational readiness for using an APS. These are vision, brains, data, and predictability.

Vision

The application of APS should be part of a strategy to improve operational performance. As an APS implementation will need many design decisions to be taken, a direction is needed to guide the major decisions. Furthermore, when doing change management to get the use of APS and the outcome of the APS accepted, it is essential that it is clear for the company what long-term value the APS will bring. Also, the vision that supports APS should be consistent with other elements of the company’s strategy. For example, it does not make sense to outsource all planning activities at the same time an APS is being introduced.

An APS does not only support existing processes; it also helps to reorganize them. The structure of supply chain management (SCM) tasks should be (re)designed together with APS introduction. This means that a company must have a vision on the future governance of SCM. An APS can make organizational issues more explicit, as they have to be configured in a specific way. An APS consultant asking for the decoupling point structure to be modeled in the APS is often confronted with the fact that this structure is not entirely clear. Similarly, this applies to many other processes, such as the checking of sales quota, identifying who is responsible for consignment stock (sales, logistics, production?), determining how delivery performance (customer view) and throughput (production view) should be balanced, and the like. The vision should be able to formulate an answer to such questions, before design decisions are implemented in an APS.

Brains

The implementation of complex solutions such as APS can only be successful when there are enough resources within the company who understand how APS works, how it can be customized, and how it should be used. In other words, there must be enough brains in the company to support the implementation and to drive the continuous improvement afterwards. Consultants will also support these activities, but they will leave at some point – when the project is over, when the budget is consumed.

APS systems are more complex than for example ERP systems and skilled users and consultants are needed to achieve APS success. In other words, APS systems need brains – not only during the implementation but also during live usage. Preferably such “brains” are part of the permanent staff of the company, instead of being supplied exclusively by the APS vendor. We do not argue that companies should always be able to develop their own APS model (although this can be a cost-efficient option for larger companies with much APS work), but as a basic principle, we believe a company, through its human resources, should be able to understand the tools it is using.

The human resources required to support APS implementations should probably have an academic degree. These can be resources without much prior experience, as they will get enough training on the job when participating in an APS project. In short, they should be smart, interested in conceptual puzzles, and eager to learn. The APS system should propose solutions that planners understand and can act upon. How the solutions are generated is the concern of the experts within the company. Representatives of the users should be in close contact with the experts to ensure the required understanding is maintained.

Data

Data quality is crucial to APS success. APS implementations reveal that master data, operational data, and decisions taken may not be aligned and extensive data cleansing is needed to run the APS. Apparently, silo-ed and stand-alone solutions glued together by human decision makers can work, even without integration and data integrity.

It helps to have a relatively modern ERP in place, but even when this is the case, a company will often find out that APSs require data quality of higher standards than ERP. For example, when orders are not closed in an ERP because they are used by sales as some kind of template orders, this can seriously disrupt order planning in an APS. 

For some companies, feeding an APS with data simply means creating an interface with ERP. However, it can also mean that middleware needs to be acquired or built, tying the knots of different legacy systems at different locations. From an organizational perspective, it helps when business and information technology departments are close to each other, as APSs are typically developed interactively and with close communication loops between the users and developers. Although most of the development will typically be done by the APS supplier, there will be many issues that must be solved by the company’s IT department.

Predictability

The following can be regarded as a physical rule in the world of planning:

planning without predictability is futile

When operational outcomes cannot be predicted, measures should first be taken to improve the supply chain’s predictability. To do a quick self-assessment, ask yourself the following questions:

1. Most of the day is actually spent planning and scheduling for the future versus reacting and deciding about what is going on today.
   
2. Rarely does a short-term plan or schedule have to be changed.
3. The same problems or issues rarely repeat themselves.
4. At the start of the day, you rarely have to do firefighting or make urgent decisions.
5. A decision-making task can be started and finished without interruption.

The more you can agree to these statements, the more the situation considered can be seen as ready for an APS implementation. Let me also note that there are ways for an APS to deal with uncertainty, by offering the possibility for replanning or rescheduling faster. In practice, uncertainty usually leads to the need to re-plan and schedule. However, there needs to be a healthy balance between planning and re-planning, for the plan quality produced by the APS to have the right effect in the supply chain.