Optimizing material management includes two aspects: reducing overall inventory and reducing shortages to ensure supply. These two goals seem to be contradictory, but with the help of the powerful algorithm of the APS system, both goals can be taken into consideration at the same time.
How does APS optimize inventory management? Through the refinement of inventory requirements.
When the MRP system places an order, the algorithm is based on: actual order demand + safety stock. However, the basis for MRP system procurement is the demand time of the order, which is not necessarily consistent with the actual production time.
Consider an extreme situation. If the order demand is based on a monthly basis and this month produces the demand for the next month, how to purchase materials? Do you want to purchase all the materials needed for a month at the beginning of the month? This will inevitably lead to excessive inventory levels.
By importing APS, we can conduct detailed production scheduling for all monthly orders, determine the expected production date of each order, refine the demand time and quantity, and allow suppliers to deliver goods according to the actual demand date. This can not only greatly reduce inventory levels, but also ensure supply of production materials.
The picture above shows the material requirements plan obtained after the calculation of PlanMateAPS. As can be seen in the picture, APS refines the material requirements to daily levels.
Since some suppliers cannot accept daily delivery and have minimum delivery volume requirements, users can define purchase consolidation cycle, minimum delivery volume, minimum packaging and other parameters. APS will combine the daily demand according to the parameters and give detailed information. Material demand planning, suppliers deliver goods according to the demand plan, which can not only ensure the supply of materials, but also avoid excessive inventory.
The picture above shows the daily material requirements for purchase orders that have been issued.
You can also consider introducing a supplier management platform to publish the demand to the WEB end. Through permission management, suppliers can see the detailed material requirements of the company’s orders and formulate delivery plans based on the requirements.
The refinement of material requirements is also helpful for suppliers to organize production reasonably. By spreading out demand dates and delivering goods in batches, the supplier’s own material inventory and finished product inventory will also be reduced. The overall efficiency of the supply chain will be greatly improved.