Steffen Clauß, on September 05, 2023, 08:38 AM
The Challenges of End-to-End Production Planning: Integrating SAP PP/DS and REO
In today’s dynamic manufacturing environment, optimizing production planning is critical to achieving efficiency, meeting delivery schedules, and reducing costs. To achieve these goals, SAP provides two essential tools: Production Planning and Scheduling (PP/DS) and Resource Orchestration (REO) as part of SAP Digital Manufacturing for Execution. In this blog, we explore the challenges of end-to-end production planning, the integration of PP/DS and REO, and strategies for achieving optimal coordination and efficiency.
Constant Change in Manufacturing and its Impact on Planning
For modern manufacturing operations, the inevitability of constant change, from operator unavailability to equipment breakdowns to unexpected material shortages, poses significant challenges to the planning process. Even in the absence of drastic disruptions, various factors can cause discrepancies between planning assumptions and the reality on the shop floor during runtime. While initial planning is based on statistics and experience regarding machine and labor availability, production speed, and quality, these assumptions do not guarantee complete predictability because changes can occur at any time.
Planning horizons play a critical role in optimizing production scheduling and resource allocation. Production planners must create orders within specific time frames to ensure efficiency and meet customer demands. However, feedback from the shop floor, such as order confirmations and resource availability, is often not incorporated back into the plan within the planning horizon. In addition, planning cycles are infrequent, typically once per day or per shift, which can make it difficult to respond to real-time events and adjustments.
To address these challenges, the goal is to follow the optimized plan from PP/DS and reconcile it with the current state of production, considering resource availability, production speed, and quality yield. For more detailed management, the MES (Manufacturing Execution System) can handle higher levels of granularity, encompassing multiple resources per workstation, additional operations, real-time event responses, capacity shifts, alternative resource utilization, and changes in processing order prioritization. Scheduling and approval can be done on a per-shift basis, allowing for ad hoc planning to effectively respond to real-time events. By incorporating real-time feedback and higher levels of detail into the MES, manufacturing processes can adapt more dynamically, promoting efficiency and responsiveness in the face of constant change.
Improving End-to-End Planning with Connected Planning
Connected Planning harnesses the power of simulation and modeling tools, advanced mathematical methods, and diverse software technologies to bridge the gap between long-range planning and production scheduling. The ultimate goal is to optimize the allocation of critical resources such as materials, assets, and labor to ensure a seamless daily schedule and improve the overall flow of manufacturing operations. Successfully achieving ambitious goals for fully digital manufacturing operations depends heavily on the alignment between supply chain planning activities and manufacturing operations. This alignment enables manufacturing teams to make optimal decisions that positively impact the entire value chain.
Despite the traditional focus on functional aspects, many companies have yet to realize the strategic importance of aligning supply chain planning with manufacturing operations. This untapped potential represents a significant opportunity for companies to improve efficiency, reduce costs, and gain a competitive advantage in the ever-evolving manufacturing landscape. See Gartner 2023: “Use-Case Prism: Smart Manufacturing” by Simon Jacobson et. al.
PP/DS and REO: Streamlining Production Planning at Different Levels
End-to-end production planning involves a range of planning levels, each integrated with SAP systems, to ensure efficient manufacturing processes. These levels include:
- Strategic Planning (SAP IBP): Long-term planning with a horizon of more than 18 months, covering finance, investments, and budget planning.
- Mid-term Planning (SAP IBP): Tactical planning, up to 18 months, involving sales and operations planning.
- Short-term Operational Planning (SAP PP/DS): Production planning and detailed scheduling, with a time horizon of 1–2 weeks.
- Shop Floor Planning and Execution (SAP DM REO): Planning and execution for actual manufacturing and production, involving orders, dispatching, shift planning, and more, with a time horizon of orders, days, and shifts.
Image source: SAP
SAP’s Production Planning and Detailed Scheduling (PP/DS) is instrumental in generating procurement proposals, optimizing resource allocation, and planning detailed order dates. It is primarily used for critical products with long replenishment lead times or manufactured on bottleneck resources. On the other hand, SAP’s Resource Orchestration (REO) serves as a cloud-based planning tool within SAP Digital Manufacturing for Execution, allowing real-time control and monitoring of events on the shop floor.
The Integration Challenge
While PP/DS and REO are powerful tools individually, integrating them for seamless end-to-end production planning is not without its challenges. Key questions arise: Which system takes precedence in case of conflicting changes? How can operations ensure efficient plan adjustments without constant regeneration, saving computing power and avoiding system disruptions? How to efficiently implement new high-priority orders while planning for tool downtime during maintenance? And many more.
End-to-End Synchronization Planning
Image source: SAP, adapted by SYSTEMA
Strategies for Handling Deviations and Disruptions:
Dealing with disruptions and deviations is a critical aspect of end-to-end production planning. These events, such as machine breakdowns, unplanned maintenance, labor shortages, or required rework, can have a significant impact on production schedules. Strategies are needed to manage these events within REO and PP/DS and make the necessary adjustments in real time to minimize disruptions and optimize production flow.
Production Planning Steps
Image source: SAP, adapted by SYSTEMA
Achieving End-to-End Production Planning
To achieve optimal coordination between long- and short-term planning levels, manufacturers should begin with a thorough analysis and definition of optimization goals for the entire system. This includes setting targets for detailed planning and carefully analyzing scheduling and dispatching processes. In addition, evaluating the frequency and impact of disturbance variables is critical to developing effective resolution strategies.
Parameterizing and configuring planning processes in PP/DS and MES is also crucial, as is defining metrics for process effectiveness. Identifying key production planning objectives and conflicts within the set of objectives is essential to ensure smooth planning operations. Manufacturers should also gain a comprehensive understanding of production characteristics, including product types, manufacturing methods, resources, and shop floor organization, to effectively optimize planning processes.
To monitor the success of end-to-end production planning, scheduling, and dispatching in achieving defined goals, it is important to select and monitor key performance indicators (KPIs). By continuously evaluating these KPIs, manufacturers can track progress and make necessary adjustments to their production planning strategies.
Manufacturers can streamline production planning and scheduling, maximize resource utilization, and minimize production costs while maintaining quality standards and meeting delivery deadlines with the right tools and applications for visualization and analysis. To meet the challenges of end-to-end production planning, plant managers need to effectively integrate SAP’s PP/DS and REO tools. This enables seamless coordination and real-time adjustments. Companies can optimize production planning, reduce disruptions, and achieve maximum efficiency in their manufacturing processes. By embracing a data-driven, continuous improvement mindset, operations can thrive in the dynamic manufacturing landscape, ensuring they stay agile and responsive to changing market demands while maintaining a competitive edge.
For an accessible entry point to this comprehensive service, SYSTEMA offers a one-day workshop. This initial session explores the potential and scope of our offering for your specific production planning needs. You’ll develop a solid understanding of your planning system, laying the foundation for a seamless end-to-end production planning approach with SAP REO. This concise workshop serves as a pathway to our more comprehensive services, allowing you to begin your production planning journey with a manageable investment.