APS production scheduling system imports financial benefit analysis

Many companies will ask a question: apart from making planners’ work easier, what are the benefits of introducing an APS system?

How much money can the company make? One more device? Take more orders? Why spend money and time on software if there is no clear economic benefit?

Compared with investing millions to import the system, is hiring an extra planner a more cost-effective option?

In this article, let’s do the math together, and the results will definitely surprise you.

Let’s take a factory with 1,000 people as an example, assuming that there are 500 production personnel. Assuming that an ordinary worker earns 15 yuan per hour, calculated based on 22 days, the monthly basic salary is 2640

Benefit 1: Improve production efficiency when producing at full capacity

In manual scheduling mode, the assessment of production capacity is rough. Many companies work 7*12*2 hours, but in fact the production plan of the production line is difficult to schedule to full capacity. Production efficiency is difficult to guarantee due to opaque planning and execution.

After the introduction of APS, as the standard production capacity schedule is fully followed, the time between tasks is tightly arranged, the buffer time between processes is shortened, the production plan and execution are transparent and can be monitored, and the production efficiency is generally improved.

According to the introduction experience, the production efficiency can be increased by 5% or more after the introduction of APS. Calculated only based on personnel efficiency, the benefits are as follows:

Assume 30 minutes saved per line per day (2%, most conservative estimate)

Monthly benefit =? 15*0.5*30*500 = 112,500.

Annual benefit =??1.35 million yuan

If the efficiency is increased by 5%, it will save 198,000 yuan per month and 2.376 million yuan per year.

This alone can recover the investment within one year

Benefit 2: Save overtime pay when orders are not satisfied

So, if the production capacity is sufficient and the urgency to improve production efficiency is not strong, is APS unnecessary?

The fact is that if the order does not require 24/7 production, APS can help the company save overtime (labor costs).

Using Excel, it is difficult for planners to calculate how much time the production line will have, which line should leave work early, whether it should work overtime on weekends, etc. PC can roughly estimate production capacity, but it is often inaccurate.

Assume that each production line can produce 1,000 products in 24 hours and can produce up to 7,000 per week. If the order is only 6,500, how should the production plan be formulated?

In many cases, when capacity is ample, planners will reduce daily output without shortening working hours. We have seen in some factories that when the equipment utilization rate is 95%, the machines run 24 hours a day, and the utilization rate drops to 85%, but they are still scheduled to work 24 hours a day, and the online work will be “slower”

If APS scheduling is used, since the system is always scheduled according to standard production capacity, equipment efficiency will not be reduced, but there will be a certain gap time. Companies can save significant amounts of overtime pay by planners eliminating gaps in schedules by reducing work hours, giving employees weekend breaks, or shortening daily overtime hours.

Assuming that an average of 4 hours of overtime can be saved per week (the most conservative estimate is equivalent to 2.4% of the weekly working time), including weekend breaks, early get off work, etc., the income is calculated as follows:

Monthly income?=??4*15*500*4=?120,000 yuan

Annual income?=?1.44 million

In fact, the working time that APS can save far exceeds the above estimate.

Benefit 3: Reduce meeting coordination time and departmental disputes

There are many meetings in the factory, and the planning department is the hardest hit area. Procurement, warehouse preparation, and business orders all require the support of the planning department, and each department spends a lot of time coordinating.

After the introduction of APS, long-term production capacity assessment, customer order review, delivery forecast, and detailed production schedule of production lines are all automatically calculated by the APS system. After the planning department completes the work, it publishes the data on the server, and the data can be shared by various departments. There is no need to hold repeated coordination meetings on planning and delivery, and a lot of work of making reports and sending emails is saved.

We assume that there are 20 employees who need to communicate, and each person needs to spend 2 hours a day on coordination, communication, report production, etc. Reducing meeting time equals five more employees. More importantly, using data to speak and scheduling according to standards can avoid quarrels and mutual accusations between departments and improve the relationship between departments.

Under the manual planning method, once delivery fails on time due to lack of materials, the planning department blames the procurement department for not supplying materials in time, and the purchasing department blames the planning department for inaccurate material demand dates. In the APS planning approach, this kind of quarrel can be completely avoided.

Benefit 4: Shorten product production cycle and improve efficiency

Using manual planning, the delay buffer time between processes is generally longer. Although it is not difficult to calculate the buffer time between a single work order/process, if there are many equipment and work orders, it is impossible to calculate the time relationship of each work order/process using Excel.

Extending the buffer time between processes can simplify scheduling calculations. There is no need to consider the connection between the previous and subsequent processes, and only the production capacity for the day can be calculated. Therefore, in many factories, the scheduling of the front and back processes will span one shift or several days. Many factories have side warehouses, where a large amount of semi-finished products accumulate, causing management chaos.

After the introduction of APS, the delay time between processes will be immediately shortened, from 12 hours to 2-4 hours is the most common, the entire production cycle of the product will be shortened, and the number of half-finished products in the line warehouse will be greatly reduced.

The differences in time control between manual scheduling and APS scheduling are as follows:

Benefit 5: Lower inventory levels

Inventory levels remain high and orders that need delivery are often in short supply?

Excessive inventory not only takes up funds, but also easily leads to wasted materials. If materials are purchased too early, once the order changes, it will lead to dead materials.

Lack of materials affects delivery, misses the delivery date, and leads to air freight, which will incur high transportation costs. Not only that, unstable material conditions can also lead to planning confusion, emergency switching on the production line, and shutdown waiting. Many of these are caused by material problems, which wastes valuable man-hours.

How to solve inventory problems?

In addition to uncontrollable abnormal factors, the essence of inventory problems is inaccurate planning. Inventory levels are high because the timing of purchases is inaccurate and goods are purchased too early. The main reason why materials cannot be delivered on time is that the delivery time to the supplier is inaccurate and changes too much. Suppliers need time to prepare for production and shipping, and if the given delivery date varies too much, the supplier will not be able to meet it.

The most important measure to improve the material situation is to improve the accuracy of plans, especially the accuracy of long-term plans!

By introducing the APS system, companies can greatly improve their material situation. APS can develop production plans for the next few months based on the actual production capacity of the equipment. By placing purchase orders according to production plans, you can get more accurate material delivery dates. In addition, the plan has high accuracy and small changes, which can improve the accuracy of material procurement, reduce inventory levels, and reduce material shortages.

Customer case: After a PCBA company imported PlanMateAPS, it ran APS every week to get the production plan for the next three months, imported the plan back to ERP to calculate MRP, and fed back the weekly updated plan to the supplier. In the first year, the inventory level was reduced by 17%, the funds occupied by inventory were reduced by about 120 million yuan, and the material shortage situation was also greatly improved.

Benefit 6: On-time delivery

APS can improve on-time delivery rates because APS’s long-term planning and order delivery forecasting capabilities allow companies to avoid making delivery promises that cannot be fulfilled. When customers inquire about orders, they can give a more accurate delivery date, and update it in a timely manner when the delivery date changes.

It is inaccurate to predict order delivery based on overall production capacity alone. The demand for orders is often uneven in time, and the overall product production cycle often lasts for many days. It is difficult to predict when each order will start and when it will be completed. Every enterprise is a link in the supply chain. The inability to give delivery dates or frequent changes in delivery dates will inevitably cause trouble for customers’ production planning arrangements.

On-time delivery allows companies to win the trust of customers and be in a favorable position in market competition.

After the customer imports PlanMateAPS, the long-term plan will be run regularly and the delivery date will be updated to the customer. There are also many companies that evaluate the order delivery date when receiving an order and provide an achievable delivery plan. If there are changes to the subsequent plan, the changes will be updated to the customer in a timely manner.

Summarize:

APS has so many benefits, what are you still hesitating about? Contact us to inquire whether your company is suitable for importing APS