With the increase in demand for customization and the expansion of mass customization, production to order is taking on an increasingly important role in the production landscape. The demand for customized products is growing in a market that is rapidly changing and becoming more and more demanding in terms of reliability, speed and flexibility.
The production to order find today themselves managing their natural complexity alongside it with increasingly higher performance objectives. Controlling and managing production in the best possible way becomes the key to compete and respond to this market. Having unsuitable tools in this period can easily and suddenly lead to severe delays in deliveries, numerous missing items (despite high WIP values) and strong inefficiencies, especially in terms of On-Time Delivery. Equipping yourself with the appropriate tools will put the company in a position of strong advantage over companies that will not have grasped the changes and challenges of the market in time.
Production to order
In production to order, the entire production cycle is customer-oriented and therefore managed around it. Only after receipt of the order does the supply cycle of raw materials, production processes and possibly the engineering drawing begin in the case of ETO (Engineering to Order).
- Delivery dates – Customers need reliable delivery dates. This is why sales are asking the planning department to provide dates they can rely on already in the negotiation phase. This may not be so immediate in a context where the product has yet to be engineered and designed. These dates must then be respected throughout the entire production cycle of the order in order to comply with the OTD (On-Time Delivery). To do this, it is necessary to have visibility of all the constraints: of capacity, resources and materials.
- Lead time – The delivery dates promised to the customer must therefore be respected but companies must guarantee the shortest lead time possible. To reduce lead time it is essential to optimize internal production processes by saturating machinery and resources. Achieving the best organization of resources and processes often causes an increase in planning complexity. The aspects that are necessary to achieve the best organization are the calculation of factory constraints, communication and coordination between departments.
- Productivity – Productivity and cost reduction are achievable by saturating machinery and resources. To do this, it is therefore essential to have maximum visibility of all the constraints of the supply chain, or bottlenecks.
- Reactivity to unexpected events – An ETO product is by its nature easily subject to multiple variations and modifications that often occur during construction. Reacting to changes and other unforeseen events that may occur in the different stages of the production cycle is therefore crucial for a company that produces to order.
To obtain all these results it is therefore essential to have tools capable of giving maximum visibility on the company supply chain, to align resources with market demands. Many companies are convinced that they plan with their own management software for which they have invested time and money but in most cases it is not so. We often notice this when the On-Time Delivery level has now dropped, the costs in the warehouse have risen and in production there is a continuous work in an emergency.
Does your company plan production orders with the management system?
Many companies that produce to order start by planning the production on the company management system, and then gradually move to plan on Excel and Project. These two tools are used for planning to increase flexibility and make their data in graphic format and therefore more easily understandable. But at the same time they allow to process only a part of the data necessary for planning to order and are not integrated into the management system or between them. These shortcomings create huge manual work over time, leading to approximate results and unable to align the activities of the various areas (technical office, purchasing, production and sales).
Over time, these tools to support planning processes lead to work for emergencies causing a drop in on-time delivery and despite an increase in warehouse costs, missing materials and therefore machine downtime are becoming more and more frequent. Poor production visibility renders the planning team unable to make effective decisions, with the risk of major emergencies leading to cost and delivery delays.
These difficulties can be effectively eliminated by giving your planning department the right tools that allow you to have full visibility of the production, working on all the necessary data while remaining integrated into your management system. The solution that has proven to be able to give the best management and control capabilities of production to order is the one based on the use of an Advanced Planning System (APS).
Advanced Planning System: visibility, power and flexibility to the ERP
Today it is possible to greatly improve the governance capacity of companies that operate on order through the extension of the capabilities of the ERP used with an APS solution.
APS is a software application that supports the decision-making process for the creation of production and purchasing plans. Through advanced mathematical algorithms, it allows to simulate the entire factory allowing to anticipate possible problems
and react in time to solve them before they occur. APS is the tool that allows the planner to:
- Dating orders in real time and reliably to maintain a high level of On-Time Delivery;
- Manage resource loads to maintain a high level of saturation while maximizing efficiency;
- Align production with purchases to avoid missing items and balance warehouses with actual production needs;
- Identify in a preventive way critical materials and bottlenecks;
- Reduces production lead times.
The plans generated by an APS are of high quality and require much less manual activity on the part of the planner to be generated and maintained.
On-time delivery KPI
On-Time Delivery performance refers to the calculation of the ratio between the sales order lines shipped by the delivery date requested by the customer (or promised to the customer) and the total number of sales order lines. Usually this value is expressed as a percentage and can be calculated over different measurement periods.
CyberPlan: Cybertec’s Advanced Planning System
CyberPlan is a powerful and innovative APS that since 1991 has supported the planning and scheduling of the production of thousands of companies all over the world: companies ranging from small-medium enterprises typical of the Italian territory to the large multinational overseas.
Every day these companies face unexpected events and changes in production scenarios thanks to the APS solution, guaranteeing management compliance with fundamental KPIs such as On-Time Delivery or the turnover rate of materials.
Cybertec’s solution has been officially certified by the DDI, but it doesn’t stop there. In fact, CyberPlan was certified as DDMRP software at its first evaluation, which happened in very rare cases and which was publicly praised by Chad Smith, founder of DDI. Obtaining the certification with full marks, at the first evaluation, demonstrates the goodness of the solution and the maturity of the logics and techniques it uses. This is a guarantee of operation and result that allows you to choose CyberPlan with the security of a reliable and professional partner.
Success stories in order production
Many companies that produce to order use CyberPlan to increase their competitiveness on the market. Companies such as Ansaldo Energia, General Electric (Baker Hughes), ABB, Siemens Transformers, Breton, Cefla and many others. Find out how to achieve On-time delivery in production to order by downloading the free guide.
Contact software experts and ask them more information to understand what you need and what fits best your company.