How to Grade Your Production Scheduling System

Executive Summary

  • Companies generally don’t know what their production scheduling systems shoud be able to do.
  • We explain how to grade your production scheduling system against important criteria.

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Introduction

Production scheduling software will never be considered the sexy category of the enterprise software. That may be hard for people who work in this area to read, however, Gartner will never write an article describing the differences between production scheduling software applications and why they are so important.

And really, why write about production scheduling software when you can write about next level analytics or CRM systems that will explode the pipeline! If you are an analyst firm, you need to keep your eye on marketability and write on topics that are hot.

It all reminds me of a quotation from the movie 13 Days,  where the actor playing Adalei Stephenson (The US  Ambassador to the UN) has to bring up an unpopular topic related to trading US missiles in Turkey for Russian missiles in Cuba. To introduce the topic he states to JFK and his group of advisors:

“Maybe someone in this room should be a coward, so I guess I will be.”

I suppose in that vein; someone has to risk talking about unsexy software categories, so it might as well be me.

Why Production Planning and Production Schedule’s Emphasis is so Low

While an unsexy enterprise software category, production scheduling is the heart of the decision making that manages to manufacture. Production scheduling determines what products will be made when they will be done, and the work to be performed in the overall factory. And in this article, I will explain why production scheduling is more important as a software category than possibly than ever before.

However, before we get into the details, let us cover what I mean by a “system,” so we can all be on the same page on terminology. So since I am talking about specifically grading a system, what is meant by this term?

Production Scheduling Software Definition

Production Scheduling Software is whatever logic makes the production and scheduling process go.

I am using the term Production Scheduling Software very generally to refer to the software that supports the production scheduling process. This is simply whatever is used.

There can be some confusion here because spreadsheets can have sophisticated optimizer add-ins, which can be used to develop custom solutions (Excel come with an optimizer, but you can buy much better and more powerful optimizers to be used with Excel). However in most cases this not what companies use, so this is not what I mean when I refer to spreadsheet scheduling in this article.

Whatever is in fact employed by a company for production scheduling, then it is by my definition, the Production Scheduling Software that is to be graded.

Is ERP + a Spreadsheet Your Production Scheduling Software?

In this previous article titled Why Do Companies Continue to Use ERP/MRP Systems for Production Scheduling?, I explained the reason so many companies score poorly in their production scheduling is due to the fact they use a combination of ERP and spreadsheets as their “system.” This is a significant error in understanding of what production scheduling requires (in most instances)

That Wasn’t Supposed to Happen!

It turns out that companies often start off thinking they can use ERP systems because of the combined fact that they were initially told they could, and secondly, because at many companies production scheduling efficiency is not a high priority (see above statements regarding the relatively low profile of this software category.)

Once the combination of ERP + spreadsheet it used, inertia sets in and there can often be a reticence to move to something more appropriate and more capable like full production scheduling software.

It’s hard to pinpoint all the reasons for this, as they shift depending upon the company in question, but a few things can be said. I have seen and others who I have spoken to have seen a general underestimation of how difficult it is to effectively schedule most production environments with basic tools.

Ouch that Hurt

I have an appreciation for this because I have tried scheduling production scheduling environments myself, using the same tools that were in use by my clients. I did very poorly.

So that gives you an appreciation for the nature of the problem, and if it were me, I would be looking for all the production scheduling software I could get. And I would not want to entertain production scheduling software from software generalists like SAP, Oracle or IBM that have no history of making production scheduling software a focus. Again, these applications from these vendors cannot create an affective production schedule even one time, much less adjust the production schedule.

Secondly, another big part of the problem is due to the illusion that the ERP system is adding much more to the process than it actually is. Let us get into this topic briefly, because it’s foundational to understanding how so many companies ended up with the production scheduling systems that they have today.

One System to Rule Them All?

ERP is simply a large footprint application that provides a number of functionality areas under one “roof.” It always needs other systems to do work in specific areas. Spreadsheets and customization is performed when the ERP system cannot meet the business requirements. It is always amusing to hear that an ERP system can meet some requirement as long as there can be some customization. If customization is written, then the application is not meeting the requirement, and one is at that point on par with using an external application. This apparent mind trick has worked on many people over the years. 

Companies that sold this vision of exclusively using the ERP system had to back so far off of this concept, that the modern interpretation and usage of ERP systems is unrecognizable from the original presentation of ERP. I extensively researched this topic and have a book on it called The Real Story Behind ERP, but the short version of the short, a lot of people who made predictions about ERP owe ERP buyers a big apology.

Incorrect Assumptions

Since ERP systems were first introduced and up until the present time, most ERP vendors have proposed that ERP (and the MRP method contained within) was a satisfactory approach for performing production planning and scheduling. The only ERP vendors, who currently do not propose this, are the ERP vendors that also happen to have production planning/scheduling applications to sell — and they only started saying this after they added this category of application to their portfolio. Until that time they said ERP can do production scheduling.

I can quite confidently that except in very rare circumstances, which I will describe further on, ERP (often with help from Excel) for production scheduling is not a satisfactory approach, rather it is simply what evolved – or was a fall back after the promises made by ERP vendors regarding their ability to support production were found to not be true.

The Value Proposition of Production Scheduling Logic

  1. Let us get into the detail of what production scheduling logic is — even at just a high level — and then compare that to what and ERP system can do.
  2. I will do this without getting into the exact way that production scheduling logic can work (which would require some articles to cover the major methods put into practice by off the shelf and custom applications.)

Production Scheduling Sofware Logic Conceptually and Adjusting the Production Schedule

Production scheduling software logic allows a company to take the production plan which is produced by MRP or more complicated method, and to take to the next level of detail. Production scheduling software deals in fine detail, and at the minute and second of time increments. This produces a production schedule at great detail. One of the most important features, however, is to be able to adjust the production schedule. Therefore one of the requirements of production scheduling software is the ability to both adjust the production schedule extremely quickly. That means that the performance needs to be there in the application. ERP cannot create a production schedule at enough detail, and MRP systems lack the performance to adjust the production schedule as is really required.

MRP is a method of both supply and production planning. MRP and similar methods only produce a plan, which allocates a planned production order to a day. Through using some capacity restricted (and there are several ways of doing this), then the job is to present a production plan to production scheduling that is roughly feasible (that means achievable by the plant on a weekly basis).

However, everything after this point is where the production planning process stops. We now move into production scheduling. This distinction is the critical part for any executive decision maker to understand.

The Next Layer Down

So, MRP takes the original view or demand/requirements and capacity and then creates the plan. Next, it requires help from another grouping of logic to schedule the production. One important thing to consider is that MRP is not exclusively focused on manufacturing. Yes, that is right as another big part of MRP is procurement — either for the product to be used for resale, or to support production.

In fact, and this is the part that many people that make decisions critical to this area may not know, MRP only deals with manufacturing at an abstract level — that is when to schedule production orders and purchase orders. This has several important implications for any “system” that is used to perform production scheduling. This system should have the following:

  1. More Time Granularity
  2. A Production Scheduling Specific Processing Capability
  3. A Production Scheduling Specific User Interface (more detailed)
  4.  A More Realism or Accurate Model of the Production Environment (a good example of this is the detail which is included in the resources.)

Detailed Time Scheduling

Of all the supply chain planning application categories, detailed scheduling has the most granularity in timing. Along with timing considerations, here are some essential characteristics of this application category. 

  1. Timing: Detailed scheduling applications have the ability to schedule to the hour and the minute.
  2. Update Frequency: This category of an application can be continually rerun (depending upon the procedure used, the hardware, the problem size, etc..) and will constantly update the production schedule. We will see a little further on why this capability is becoming more important due to the changes in how Marketing and Sales operate.

Detailed Scheduling + MRP?

Now up to this point, I have described MRP as a process that is put in front of the detailed scheduling process. And that is true, but it is not exclusively right. This is because some of the production scheduling applications can also run MRP so that the procurement/material implications can be seen within the application, which is far more detailed and useful (for this purpose) than any ERP system.

In this case, the application will tend to run MRP quite frequently. When the MRP/ERP system is properly integrated to the detailed scheduling system to the production schedule. The changes to the production schedule are then fed back to the MRP/ERP system which then makes adjustments — although the adjustments are at a higher level of aggregation.

So, the production planning that is performed in the ERP system merely sets up the production scheduling system so it can go to work. And it does not just need a “little help” from the production scheduling system, the production scheduling system is far more complex than what ERP MRP run is doing.

Making Cheese

There is a very strong tendency to oversimplify and to conceptually unify manufacturing environments. For whatever reason, when many people think of manufacturing, they think of a discrete production line. However, there is so much variety in manufacturing. This is cheese being mixed. Mixing operations are their specific type of scheduling problem (and they can be simple or complex). 

PetroChemicals

This is an oil refinery. The production scheduling is so specific for the petrochemical industry that it is mostly dominated by a single software vendor that only focuses on developing solutions for this industry. 

And considering the variety of manufacturing environments, gets to the next topic of this article which is the all important matching process between system selection/development and the specific requirements.

How Does Your Production Scheduling System Match The Production Requirements?

There is an important matching process that must be performed first to connect the right type of solution to the needs, and one of the important distinctions is based upon the complexity of the scheduling problem, which I break into low complexity, medium complexity, and complex or custom.

  1. Low Complexity: Production scheduling environments that are simple enough to be managed in a spreadsheet. I have done this myself, creating a spreadsheet for paint mixing that can sort a sequence of production jobs based upon cost and change over time, however, this is only for simple things, and who knows what else I could have considered, but I didn’t because my tool was so simple. Few manufacturing environments are so simple that they can be effectively scheduled this way.
  2. Medium Complexity: Production scheduling environments that are sophisticated enough, but not so specialized, so that they are a fit for packaged solutions.
  3. Complex/Custom: Production scheduling environments that are so complex and custom that they either require highly customized packaged solutions that are specifically designed for the problem, or they need custom developed software. This custom software can be developed in-house, but there are also software vendors that have a framework that can be adjusted per company, so they don’t start from scratch each time. These types of businesses tend to be stronger in some industries than others.

Knowing Where You Are on the Production Scheduling Decision Tree

I recently had a consultant reach out to me regarding the benefits of using a production scheduling system in a chaotic environment. At the end of one of his correspondences he asked.

(In this case) Is there really a benefit to using production-scheduling application?

This consultant started out by asking me if I could recommend a packaged production scheduling application.

What Node of the Decision Tree Again?

The questions that he was asking had multiple facets to them, and in fact, his company was, in my opinion, further “up” the decision tree — which from what I could see is at the “first node.”

The following seem to apply to the first node of decision making.

  1. Is some standard packaged solution right?
  2. Is Excel with some solver plug in the right?
  3. Is a lightweight application right?
  4. Is a custom solution right?

This is about moving backward from the requirements of the best approach first then worrying about the second node after the first node is determined. The decision branch currently is what application, or what solver or what lightweight application or what type of custom solution.

So I think because of the specific types of requirements that he had with his client that it is important not to move down to the second decision branch yet, and to stay up at the first node until this first question had been answered.

Scheduling “Chaos?”

Due to actions primarily on the part of Marketing and Sales, production scheduling is increasingly chaotic. It is always amusing to hear about “demand shaping,” where Marketing and Sales adjust the incentives to smooth demand. Where is this happening outside of discussions in conferences? Just the opposite is now the most common approach. I will get into this in detail a future article, but pandemonium is the new normal in manufacturing, and this entire topic is far less acknowledged than it really should be. 

Conclusion

So the question is, if your company was evaluated, how good do you think they would do in how “good” the production scheduling system is?

  1. Is it flexible? How long does it take to adjust the overall schedule after a new order is dropped in? Is it clear what happens to the other orders when this happens?
  2. Can your system account for setup times, can it arrange the planned production orders to account for these setup times?
  3. Does the solution help Sales? This is a derivative of the “what if a new planned production order” is added — but it is a simulation, as the order has not yet been added.
  4. Can your system help with planning scenarios?
  5. Does it meet the business requirements of manufacturing operations?
  6. Is it the right type of solution?
  7. How closely does production follow the schedule after it is firmed?
  8. That is if the manufacturing environment is reasonably complex is packaged production scheduling software used?
  9. If packages scheduling software used — is it a match for whether the manufacturing is discrete, repetitive, process or batch?
  10. It is easy to use, or at least relatively easy to use?
  11. Do production schedulers praise it or complain about it?

I hope this article has at least demonstrated that it is important enough to find out the answers to these questions.

User Warning

This article does not mean that I propose just any production scheduling solution.

  1. No decision regarding a software vendor can be determined before the earlier question is answered — because packaged solutions are not right for many detailed scheduling environments.
  2. There are plenty of inappropriate production scheduling applications that won’t help the company’s situation anywhere near as well as others. Furthermore, with the number of poorly selected production scheduling applications I have seen implemented, it is not a simple matter getting the right one.

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References

Process Industry Manufacturing Book

How Process Industry Manufacturing is Unique

From a distance, all process industry plants look the same. But under closer inspection, it is clear that every plant is very different. In fact, process industries have the widest variety of unique manufacturing requirements of all the manufacturing categories. As an example, this book shows examples that range from petroleum refining to power generation to cheese manufacturing. For this reason, no off-the-shelf planning application will meet all the requirements.

Through extensive graphics, screen shots—and links to videos available online—this book gives a thorough analysis of planning and the software solutions that meet the process industry’s unique and varied requirements.

The Only Book of Its Kind

This is the only book to cover ERP, planning, recipe management and manufacturing execution and scheduling (MES) as well as process control software all in one book.

By reading this book you will:

  • Understand the difference between process and discrete manufacturing and why software solutions designed for discrete manufacturing leave process industries with gaps in functionality.
  • Examine batch and continuous processing within process industries.
  • Lessen the confusion around terminology, such as recipes, formulas, bill of materials and more.
  • Learn about standard software functionality designed for process industries.
  • Know what to look for when selecting software to meet your business requirements for production planning.
  • Explore the software applications from PlanetTogether, Arena Solutions, Hamilton Grant, and AspenTech and how their solutions meet the complexities of process industries.
Chapters
  • Chapter 1: Introduction
  • Chapter 2: Continuous Versus Batch Processing
  • Chapter 3: The Discrete Manufacturing Focus of Most Manufacturing Software
  • Chapter 4: Co-Products and By-Products
  • Chapter 5: Recipe Management
  • Chapter 6: Overlapping and Leading and Lagging Operations
  • Chapter 7: Mixing/Blending/Pooling Operations
  • Chapter 8: Changeovers and Cleaning
  • Chapter 9: Constraint Planning and Process Control
  • Chapter 10: Manufacturing Execution Scheduling (MES)
  • Chapter 11: ERP for Process Industry Manufacturing
  • Chapter 12: Conclusion

Software Ratings: Production Planning

Software Ratings

Brightwork Research & Analysis offers the following free production planning & scheduling software analysis and ratings. See by clicking the image below:

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