SAP Production Planning & Capacity Planning

Improve Production & Capacity Planning

Improving operational efficiency and throughput directly impacts profitability. Sadly, most companies underutilize SAP capabilities to increase both these KPI’s. Overall Equipment Effectiveness (OEE) and other measures provide some sense that assets are being utilized effectively but they do little to increase visibility into areas called out for improvement including planning and schedule attainment.

To achieve improvements in these areas you need a “single source of the truth” such as SAP, which integrates all the relevant moving parts on the shop floor combining work center and routings that reflect reality and different production versions.  When this occurs, production planners gain the ability to seek out constraints and lean-out processes to improve cycle times, reduce change over times, increasing capacity utilization, and ultimately improve throughput time and efficiencies.

A little bit of art mixed with a whole lot of science is required to build a solid, realistic plan that will turn into a feasible schedule.

Utilizing standard SAP Production & Capacity Planning, combined with the right planning strategies and master data settings, planners gain the ability to perform finite scheduling and manage asset utilization. The vision capacity planning provides from a long-term, mid-term and short-term capabilities provides the supply chain extreme flexibility to achieve planning, scheduling, and production efficiencies. Armed with the real-time and trustworthy data including work center and labor capacities, production teams are empowered to proactively make decisions on how best to meet customer needs.

Optimal Production & Capacity Planning

Structuring production & capacity planning to work requires careful alignment of demand-driven material requirements with manufacturing capacity and shop floor capability.  Reveal’s oVo® methodology focuses on helping organizations implement and optimize SAP capabilities and best practices to plan, execute, and improve decision-making based on actual capacity and scheduling information. With less disruptions to shop floor operations—even as demand fluctuates—you are better positioned to manage and improve material and production flow. Not only are you able to maximize your utilization of resources, you also can increase schedule and plan attainment and improve the efficiency of your operations.

The Challenges of Production & Capacity Planning

Month after month, production stakeholders try to gain control of changing schedules, capacity constraints, and constant demand changes. Spreadsheets are often the order of the day and demand and availability changes are communicated between teams via email. Teams are caught in a never-ending cycle of fire drills as they race to address bottlenecks and constraints to keep operations flowing. Yet it seems that no matter how hard they try, they are constantly fielding calls, emails, and instant messages on when the product will be available.

Applying Production & Capacity Planning

For a manufacturing company to survive and thrive, its operations have to be both lean (cost competitive and efficient) and agile (responsive to market demands). To meet these expectations, manufacturers must push hard to improve performance across a range of processes: production planning, schedule attainment, production sequencing, work center capacity leveling, addressing customer tolerance time, asset maintenance, all the while meeting demand requirements.

When world class organizations get it right, they gain the ability to effectively translate the Sales & Operations Plan (S&OP) into predictable constrained supply plans utilizing standard SAP scheduling and capacity capabilities, managing by exception and continuously improving on shop floor KPIs.  

Whether it’s optimizing supply chain performance or implementing additional SAP functionality, Reveal helps organizations improve internal business processes, educates users, and deploy the smart use of SAP to achieve sustainable, tangible value. By challenging organizations to move away from being transactionally driven and move towards information-users that manage the process and apply knowledge, improvements in agility, service, cost, and inventory performance are achieved.