A Case Study of steam engineering and control instrumentation

solutions Provider - Advanced Supply Chain Planning (ASCP)

Methodology related to planning performance measures

Abstract
This whitepaper is based on a case study of how the Client, a high
volume global manufacturer of steam engineering and control
instrumentation solutions, encountered some ASCP usage and
Plan performance issues.
In this case study presentation, well share how the Client
successfully optimized the entire ASCP Planning Chain
performance. The objective of the white paper is to share with the
users specific strategies to improve performance by creating
scripts and reports.
Company and Background
KTCS Company Profile
Kudale Talwelkar Consulting and Software Services Pvt. Ltd.
(KTCS) has been formed with an intention of providing high
skilled services in the area of Oracle Value Chain Planning
(VCP) suite and E Business Suite of applications.
KTCS aims at enabling clients to plan and manage supply
chain IT in the most cost effective manner.
Since its inception in Nov.2008, KTCS has successfully served
8 clients from different industries.
KTCS consultants are highly experienced in Oracle APS & EBS
implementation and consulting with clients across the globe.
KTCS is based in Pune, Maharashtra.

Pre-ASCP usage improvement (pre scenario)

CLIENT started implementing and Advanced Supply Chain
Planning (ASCP) in 2012. The management was thinking to get
benefits from the ASCP implementation then an Assessment was
taken place with the help of KTCS to see where they are lacking in
getting optimum use of ASCP, then KTCS came up with the
following ASCP Planning Performance Measures, Measures were
included:

Enabling actions

ASCP Performance Improvement Objectives

Client engaged the KTCS development and support team to
quickly resolve performance issues and help with stabilizing and
managing the Planning Chain, based on KTCS past proven
success in implementing and supporting high volume ASCP, GOP
and Inventory Optimization client environments.
The KTCS team objectives with regards to ASCP Planning Chain
were:

The KTCS team analyzed the issues and adopted a step by step
approach to improve the Performance of ASCP:
1. The KTCS Support team to work on identifying the root cause
and to develop a long term solution to eliminate issues of the
Planning performance measures.
5. Develop various reports to detect cancelled orders, reschedule
out orders which could be called from running requests.
Based on the prior success of KTCS approach of performance
Improvement of ASCP, the solution was developed and tested.
The KTCS team analyzed the following key parameters before
coming up with the solution:
Scripts were developed to run the program which were designed
to give output in excel sheets.

The Methodology adopted by KTCS:

FMPL Business objectives

Monthly Dispatch
Value
On time Delivery

Inventory Control

At FMPL any system would be considered useful only if it contributed in

fulfilling the above business objectives. So it was necessary that the
approach / methodology adopted by us to improve business utility of the
system had components that were enablers of these objectives. We
adopted following approach to improve both business utility of the system
and its actual usage by the business.

1. Identify enablers for above business objectives.

2. Derive assessment criteria to assess divisions performance on the
enablers.
3. Have weekly meetings with planning team and supply manager of
every division.
4. Guide teams / supply managers on actions to be taken by them.
5. Identify and resolve issues raised by planning teams.
6. Assess every division on the assessment measures on monthly basis.
7. Discuss assessment results with supply managers in presence of
supply director.
At the beginning of the assignment we observed that ensuring achievement
of monthly dispatch value committed to top management remained the
topmost priority of all supply managers (supply manager is a head of a
particular business division) in FMPL. Everyone in the division was fully aware
of these targets and the current status of dispatches. The value dispatched
by a division has a major role to play in the calculation of its VAPP (value
added per person). All monetary incentives to employees in a division are
linked to the extent of achievement of divisions VAPP target. Hence this high
level of awareness about monthly dispatch value.
On time delivery and inventory levels were measured and considered
important. However proactive actions to perform well on these dimensions
were not as visible as the efforts to achieve monthly dispatch value.
It was this difference in the relative importance of business objectives which
prompted us to use assessment measures in a time-phased manner. Various
assessment measures used and their sequence of implementation are
mentioned later in this paper.

Enablers Monthly dispatch value

1. Availability of information for taking sales order preponement /
postponement decisions
2. Quick and complete alignment of make / buy supply orders with
sales order preponement / postponement
3. Sales order shipment schedule stability ( 4 weeks rolling)
4. Planner level collaboration for internal supply chain actions
5. Consistency in ATP rules for FGs and component stocking policies.
6. Clarity on receipt priorities for buyers
7. Supplier communication ( supply priorities)
8. Customer communication ( getting orders cleared for dispatch)

9. Availability of information to reschedule order backlog in future

periods
10.

Enablers Inventory control

1. Availability of information on all supply (make / buy) actions
relevant to all pending sales orders
2. Quick and complete alignment of make / buy supply orders with
changes in sales order schedule.
3. Sales order shipment schedule stability ( 4 weeks rolling)
4. Planner level collaboration for internal supply chain actions
5. Clarity on receipt priorities for buyers
6. Supplier communication ( supply priorities)
7. Lead time corrections based on average actual lead times
8. Implementing planner / buyer role overlap
9. Eliminate safety stock / rationalize safety stock values
10. Controlled release of make orders to shop floor. ( release only
those planned orders which are fully pegged to on hand)
11. Availability of information on
a. on hand inventory pegged to demand
b. on hand inventory pegged to safety stock
c. on hand inventory pegged to excess
d. inbound supply pegged to demand
e. inbound supply pegged to safety stock
f. inbound supply not required ( to be cancelled)
g. inbound supply to be postponed

Enablers On time delivery

1. Complete clarity on scope of supply on sales order booking
2. Sales order shipment schedule stability ( 4 weeks rolling)
3. Free up buyers to focus on on-time receipts through
a. Automated internal order creation
b. Automated creation of outside processing (OSP) purchase
orders
c. Automated creation of purchase orders for high consumption
items
4. Minimize manual communication of priorities among
a. Planning buying functions
b. Planning manufacturing function
5. Planner level collaboration for internal supply chain actions
6. Customer communication ( getting orders cleared for dispatch)
7. Traceability of adherence to schedule by each supply function
8. Mechanism to track time elapsed from customer PO to Invoice.
9. Improve team work to address
a. purchasing challenges
b. capacity challenges
c. scope change (BOM change) impact

Enablers Foundational
These are the enablers which if not present reduce effectiveness of the
enablers mentioned above.
1. Top management's orientation on "ASCP Driven" management
of operations.
2. Strengthening planning function.
3. Highly empowered central planner.
4. Active involvement of "head of operations".
5. Mechanism to ensure timeliness of transactions.
(In this paper I will remain focused on actions taken on first three set of
enablers. During our discussion I can explain what was done regarding
foundational enablers.it requires some elaboration on FMPL org structure
and how two business groups CIG and SEG are managed)
As mentioned earlier a time phased assessment criteria was derived from
these enablers. The first assessment criteria used from Aug 12 to Nov 12 is
as given below.

1 No action / Just Initiated

2- Below average

3-Average

4- Good

5 - Excellent

In my weekly meetings with planning team and supply managers of each

division (total of 12 divisions .9 from control instrumentation group and 3
from steam engineering group are covered) the teams were oriented on
importance and relevance of what was being assessed and what specific
steps they need to take to improve their assessment scorewhich in turn
indicated presence of enablers of three primary business objectives. After 4
months of assessment in this manner the assessment criteria was changed
to the following. Though the assessment criteria got changed, supply
managers were supposed to keep a close track of progress on previously
used assessment parameters.

All figures are % figures

Arrow indicates desired direction of the measure

Continuous interaction with divisional teams, monthly assessment and its

formal discussion with supply directors helped in two important things apart
from divisions taking right actions on various enablers.
1. It created a broad based buy-in of ASCP way of planning and
running operations
2. It helped identify genuine system configuration changes / report
requirements / add on customizations based on difficulties

encountered by some divisions in adhering to recommended

processes.
From Jan 13 onwards we also started sharing following information along with
detailed item / order level supporting data with supply managers so as to
help them have better operational control on inventory build-up.

Due to availability of this information. in most of the divisions both sales

and supply functions are working together to explore possibility of using up
excess inventory in new / open orders. Sales function has actively got
discouraged from forcing buyers to initiate advanced procurement actions
without sufficient confidence on sales order realization. Supply managers are
now supposed to be fully aware of the reasons behind unimplemented
cancellation and reschedule-out recommendations.

Solution Benefits
The performance Improvement solutions described above greatly
benefited Clients Supply Chain Planning. Some of the benefits are
as below:
High Degree of Accuracy in ASCP Results
Due to a very high rate of success of the complete data collection
of various orders with the help of custom reports, the ASCP plans
maintained a high degree of accuracy. This helped the Supply
Chain Planning team regain confidence in the ASCP and IT
departments capabilities.
High Order On-Time Delivery Rate
A high degree of accuracy of the planning data helped Client to
maintain very high on-time delivery rates.
Increase Utilization of Machine and Resources
Timely loading of the planned orders in the MES resulted in
increased utilization of machinery and resources. ASCP tuning
made the plan available early enough and this allowed for higher
rate of utilization.
Conclusion
Client on-time delivery of consistently high quality product has
been the key to staying ahead of the competition in the
commodity product market in which Client operates. With the
companys growth, the Supply Chain Planning model at Clients
place will continue to evolve bringing new challenges for
business, IT teams and systems. The company will need to
continue building on already achieved results and be ready for
greater efficiency and performance.