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Author's profile photo Gregory Louallen

SNP – Capacity Leveling in SCM 5.0

Capacity Leveling in SNP (with SCM 5.0)

In my experience, the relative simplicity of the SNP heuristic solver followed by capacity  leveling has appeared very attractive to many APO users.  Most likely, we have all seen  the matrix comparing the configuration complexity and level of effort required to set up  each of the primary SNP solvers: SNP Heuristics, Capable to Match (CTM), and the SNP  Optimizer.    To summarize the matrix for configuration effort: – SNP Heuristic is listed as “Minimal”,  – CTM is listed as “Medium to Large, depending on the complexity of the supply chain”,  – the SNP Optimizer is “Medium to Large, depending on the complexity of the supply  chain.  Cost fine-tuning is the major effort”.    The enthusiasm for this 2-step heuristic process is then tempered when the APO user  realizes that the capacity is only moved to previous (pre-building) or subsequent  (building late) buckets on a single resource.  The orders can only be offloaded to other  resources manually.  For example, if Line 1 is the preferred source of supply for a production order, the  heuristic would place all demand on Line 1 without respect to capacity constraints.  In the  case of an overload on Line 1, the “pre-SCM 5.0” capacity leveling functionality would  allow the orders to be built early or late on Line 1.  If Line 2 and Line 3 have the  capability to produce the order, maybe just not as cost effectively, they are not considered  by capacity leveling and can only used through manually moving the order to the  alternate resource.  Use of the non-preferred resource is often preferable to pre-building,  thus incurring carrying costs for inventory, and almost always preferable to late delivery.     Based on this revelation, if there are multiple sources of supply in the APO user’s  business, the discussions turn to CTM or Optimizer which can finitely plan production  resources and off load to other sources of supply based on procurement priority or  relative cost.  I was very excited to hear that SCM 5.0 offers new, enhanced capacity  leveling functionality. 

Now that 5.0 is here…

SCM 5.0 now allows capacity leveling on alternate resources!  If multiple Production  Process Models (PPM) or Production Data Structures (PDS) exist at a location, capacity  leveling can offload orders to selected resource(s), a selection profile, or all resources at a  location, as defined by the user.  This can be done interactively or in the background.   Going back to the earlier example, heuristics has overloaded the resource Line 1.  We  now have the option in capacity leveling to: – choose Line 2 or Line 3 as a single alternate or  – create a selection profile containing Line 2 and Line 3 or  – simply select “all resources” which will consider any valid alternative resource.  The system will then move orders to the free capacity of the alternate resources,  respecting the procurement priority of the selected alternates.     This selection respects procurement priority and will not overload alternate resources or  affect orders already on these alternate resources.  Using this functionality, the SNP  heuristic solver becomes a realistic alternative to Optimizer and Capable to Match (CTM)  for creating a constrained mid to long term supply plan.

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