Frequently when we work with clients to implement decision support tools for supply chain scheduling and planning, they often have some unique constraint that is essential to model and may be unique to their environment. Some recent examples we have encountered include the following:
- When producing a batch in a make to order environment, the plant always produces some extra amount called the purge quantity which is stuck in the piping from the reactor to the packout line. After purging the line, this material is recycled into the next batch.
- A warehouse can have capacity constraints on both the
- Throughput based on the number and type of doors and
- Storage based on material characteristics such as hazardous material classifications.
- When working with a dairy industry client, the bill of materials changes throughout the year based on the component ratios of the milk produced by the cows which drives the product split.
These types of situations are a regular occurrence and require modeling tools that allow for the flexibility to deal with them. We will implement decision support tools either with a development suite such as Aspen Tech’s Supply Chain ManagementTM or develop an application that connects to an optimization engine such as FICO’s XpressTM. These tools provide a base starting point but then allow for adding modeling constraints that are required to include to get to a solution that the client can actually implement.
In addition, having this flexibility allows the work processes and tools that enable the work processes to evolve over time as the business needs change.
This flexibility though has to be balanced with some level of standardization. Therefore we will often build a new application by using a previous application as a starting point. For a production scheduling tool, there are many things that are common between different implementations including how to represent the schedule via an interactive Gantt chart, common basic reports, standard interfaces to external systems, etc. In a production planning tool, typically there are plants, warehouses and transshipment points to be modelled via a network representation; costs and capacities at each of these nodes in the network that need to be modelled; and an objective function that is either to minimize cost or maximize profit. All of these would be common elements between different planning model implementations.
- Flexibility allows for
- Modelling essential constraints that may be unique to a particular client’s environment but are required to get to a feasible solution that the client can actually implement.
- Changing the tool over time as the business needs change.
- Standardization allows for
- Faster / cheaper implementation.
- Faster / cheaper support.
- Ease of training when moving to a different role but using similar tools.
Having a hybrid of flexibility with standardization is the best of both worlds!
Idempotency – a key to better code
Recently I found a term that intrigued me. Idempotency.
From the web I saw this definition that I liked: In computing, an idempotent operation is one that has no additional effect if it is called more than once with the same input parameters.
Much of my computing experience has been dedicated to the transformation of data. And I have written countless routines that transform data in one way or another, from constructing schedule applications to assigning inventory to orders. I support many applications that manage data in various ways with various syntaxes and data structures in various applications. Invariably, those sections of the code that keep me up at night and cause me the most angst in support, are those that were developed without this concept of Idempotency incorporated into their design. When one makes a routine that operates on a data set, if you do not consider what happens if that routine runs again, it will eventually cause you grief in a support call. I learned long ago that operations of these sort must be designed to not accumulate their effect on the data. They must be ‘smart’ enough to not cause errors when they are run again, because in complex systems the control of when the routines are run may not be under the control of the programmer (think jobs or multi user UI), or even if it is, the programmer may end up calling it again for other reasons. If the routine does not adhere to the concept of Idempotency, it can be very tricky to understand how the data go into the sate it is in when the user calls. Often my most difficult troubleshooting issues are these types of problems. So I read with keen interest about this concept that was well enough defined to help me keep the concept in the forefront when designing new applications.
Some examples when using Idempotency is critical are: netting inventory, re-scheduling activities, parsing address data into fields, and in some cases, adding records to a record set. In all these examples, the code needs to be aware of whether the transformation operation was already performed.
Adding Records to a data set: Let’s say you are accumulating records in a data set from various data sources, like names from each department’s employee databases. If you have already appended the finance department’s data to the master table, then appending it again will cause duplicates. Obviously there are many techniques to prevent duplicates in a database, but let’s explore how Idempotency can help. If the appending routine is designed with Idempotence, it can be run anytime, and as many times as you like without adverse effect (like duplicates). To incorporate this into the append routine, ensure your data set has a text field to hold the name of the source of the data. I usually put in the name of the action query or stored procedure that creates the records. Then the first part of the routine can query the data set to see if this action has been run previously, and if so, either terminate or remove the records before executing the append of new records. In this way, running the routine multiple times for the finance department will replace the finance department’s names in the master table.
Netting Inventory: When dealing with inventory, I typically read the value form the system of record, and netting happens there. However, let’s say you need to carry a book inventory value in your local system, and net that inventory as the user enters adjustments to it every day. The netting logic can be complex. It begins with the starting inventory, and adjustments are accumulated and applied to become a new starting inventory value. If the adjustments are applied to the starting inventory more than once then the value will drift away from reality making it unusable. To prevent this, and apply the concept of Idempotency, I carry three inventory fields: Inventory (both the starting inventory and the resulting adjusted inventory), Original Inventory, and Adjustments to Inventory. When the adjustment field changes via the UI, I replace the Original Inventory field with the contents of the Inventory field. After this I can apply the transformation (repeatedly) to the entire data set to calculate the Inventory = Original + Adjustment. Additionally, I time-stamp the record when the transformation is applied, and when the Adjustment is entered. The UI can compare the Adjustment time-stamp to the Transformation time-stamp to see how to treat the Adjustment, either as a replace or an accumulation. If the Adjustment time stamp is later than the Transformation time-stamp this means that the Transformation has not yet been run to use this Adjustment. In this case, the UI might accumulate any new user adjustment into the field. If the transformation has already been run, then the UI would replace the Adjustment.
Aspen SCM (MIMI) Scheduling routines: Another area where this concept of Idempotency is important is when using some scheduling techniques in Aspen SCM Plant Scheduler. Sometimes it is interesting to move all the activities off of one or more reactor facilities to a temporary holding place (similar to a queue) to be able to re-schedule them one by one on the best reactor at the most appropriate time. This is a powerful technique to allow the routine to prioritize activities to meet customer demand, and maximize the capacity utilization on the reactors. However, if Idempotency is not considered during the design of this routine, the results can be devastating to the quality of the schedule. Lets say the routine fails during the re-scheduling portion of the routine. The reactors are partially filled, and the temporary holding place is loaded with activities. Since multiple reactors are the source of the activities, the temporary holding facility would be overloaded in time, having activities that extend beyond the end of the scheduling horizon. Executing the routine again when starting in this state would erase all of the activities on the temporary holding place, thus erasing much of the schedule. Incorporating Idempotency into the routine would mean considering the path to recovering these activities in the case of a failure or re-running the routine.
It turns out there are several other related terms that are interesting as well: Again from the web: read about them here:
NULLIPOTENT: If an operation has no side effects, like purely displaying information on a web page without any change in a database (in other words you are only reading the database), we say the operation is NULLIPOTENT. All GETs should be nullipotent. Otherwise, use POST.
IDEMPOTENT: A message in an email messaging system is opened and marked as “opened” in the database. One can open the message many times but this repeated action will only ever result in that message being in the “opened” state. This is an idempotent operation.
NON-IDEMPOTENT: If an operation always causes a change in state, like POSTing the same message to a user over and over, resulting in a new message sent and stored in the database every time, we say that the operation is NON-IDEMPOTENT.
Reading about and exploring these terms has reinforced and put a name to a concept that through experience I have come to understand has major consequences. Now that I can name the concept, hopefully I can be more concise in explaining to others the need this concept addresses, and write better code too.
Jim Piermarini – Profit Point Inc.
April 22nd, 2015 12:30 pm Category: Global Supply Chain, Network Design, Operations Research, Optimization, Profit Network, Supply Chain Improvement, Supply Chain Optimization, Supply Chain Planning, Supply Chain Software, by: Gene Ramsay
At Profit Point network design analysis, answering such questions as
• how many facilities a business needs,
• how large they should be and where they should be located, and
• how they should change over time, etc.
is one of our specialties. We have performed this type of analysis for a range of companies across multiple industry types and geographical regions, and we have developed our own network design-focused software package to help us do this type of study. (And we teach folks how to use the software as well, so they can answer their own network design questions, if they want to pursue that.)
Our modeling “toolbox”, our Profit Network software, is designed to be flexible and data-driven, so that the user can focus more attention on a key part of the supply chain where the questions must be answered, without having to define more detail than is really desired in other areas to the supply chain.
One of the key elements in many of the models we or our clients construct is the bill of materials. This data specifies the materials that are required to produce goods along the supply chain, be they intermediate materials or finished goods. For instance, if you are making a finished good such as a loaf of bread, the bill of materials would specify the quantities of flour, yeast, salt and other ingredients that would go into a batch.
To get trustworthy results from a model, it must require that the bill of materials (BOM) data be defined, and be used, in deriving the solution. (In some models we have encountered the BOM is just a suggestion, or products can be created from thin air if the BOM data in not defined.)
The BOM logic must also be able to capture the reality of a situation. The BOM may need to vary from one machine to another within the same facility. Or it might need to vary over time – as an example, when agricultural or dairy products are ingredients to a manufacturing process, the ingredients might have different characteristics over the seasons of the year, thus requiring different input quantities over time to produce a consistent, standardized output.
We work closely with our clients to ensure that our software is matched to their needs, and that it gives them the flexibility they need as their businesses change.
Profit Point is helping several large chemical manufacturers upgrade their many Aspen SCM scheduling models with a goal to achieving long term support-ability in the new Aspen architecture of ver 8.5. An Aspen SCM (MIMI) Upgrade is no small undertaking, but we have been helping people manage, support, and enhance their scheduling models for over 20 years.
I have seen many Mimi scheduling models over the last 20 years, in many different businesses, and it is still amazing to me how well these scheduling models work. Their superior applicability is primarily due to creativeness of the their original modelers and their efforts to incorporate all the important aspects of the plants which they schedule, and most that I have seen have remained relevant and useful all these years. Their longevity is due is no small part to the flexibility of the scheduling environment which is Aspen SCM (AKA Mimi). This allows for many minor changes to the tool as equipment characteristics change or are upgraded, or as the business needs change, or indeed as the scheduler changes. This new version retains that flexibility which has made Aspen SCM scheduling models still relevant today.
In previous version changes, Aspen SCM has always been backward compatible; meaning that with nominal effort a newer Aspen SCM version would open an older version’s scheduling model. This was true up to ver 8.x released earlier this year. With this version, the older scheduling models, especially those that were developed in house, will not be able to function properly without a more substantial effort. Version 8.x brings a new XML based architecture and with it a new look and feel, more compatible with today’s applications. In addition, it has some useful new features that can make scheduling easier. Link here https://www.aspentech.com/products/aspen-plant-scheduler/ Aspen SCM remains, in my opinion, the best tool for the job of scheduling plants of all types and sizes. This new version is no break from that long history of being the best, indeed it has just been made even better.
With plants around the world, our customers trust Profit Point to upgrade their effective scheduling models to the latest version of Aspen SCM (Mimi) so they can enjoy many more years of effective scheduling at their plants.
We love doing this work. Call us if you are facing the same upgrade challenge, we may be able to help get you going.
April 16th, 2014 10:21 am Category: Global Supply Chain, Network Design, Operations Research, Optimization, Optimization Software, Profit Network, Supply Chain Optimization, Supply Chain Planning, Supply Chain Software, by: Gene Ramsay
Recently I had the opportunity to speak to an operations management class for MBA students in the Goizueta Business School at Emory University. The class is intended to give the students an introduction to a variety of problems that they might encounter during their careers, and to management science techniques that might be applied to them, using Excel as a solution platform. The professor had asked me to address the course topic from the point of view of one who had used these methods in the real world, and I was glad to do so, recounting my work in supply chain network design, hydro power generation scheduling, routing of empty shipping containers, natural gas supply contract management and various other problems.
During Q&A one of the students asked how a company should determine the appropriate source of resources to use for solving these types of problems – should it be in-house expertise or an outside consultant?
As I told him, to me, this depends on a number of factors, and I gave an example, based on our experience: In our practice we perform supply chain network design studies, and we also license the network design software that we use to our clients, if they desire. A number of clients have engaged us to first do an analysis for them, and then they have licensed the software so that they can then perform future projects themselves, using our initial project as a base. Many of these clients have used the software very effectively.
Those that have been most successful at using the software in-house, and at performing management science projects in-house in general, have several common characteristics-
- They are committed to tactical and strategic planning as tools for meeting their business goals,
- They have enough work in this area, and related areas, to keep an analyst or group of analysts busy full time, due to such factors as
- The scale and scope of their operations
- The speed of innovation in their industry
- The level of complexity of their supply chain and variety of products made, and
- Their desire for a “continuous improvement” approach as opposed to a “one-time reorganization” approach
- They have a commitment to maintaining personnel who
- have the proper skills and training to address these problems, and
- are allowed the time to work on these problems, rather than being constantly pulled off for “firefighting” short term or operational problems.
Most companies can make good use of management science solution methods, but, as you think about how to do this, try to make a realistic determination of your internal priorities, so you can decide between insourcing and outsourcing, or a mixture of the two.
October 3rd, 2013 5:54 pm Category: Supply Chain Software, by: Richard Guy
Are you frustrated with your Supply Chain Software application? Is it time to pull the plug and start searching for a replacement application? Here’s a list of signs that we often hear from customers that motivates them to start searching for better solutions.
1. Installation is REALLY difficult.
2. It takes up a lot of space on the hard drive. Several gig.
3. It often throws errors with no obvious solution on how to fix it.
4. It frequently does not work properly, and you find out later, when someone questions the results.
5. Support for new features is very slow and cumbersome.
6. It leaves the user with the sense that you don’t want to touch it, it is delicate, sort of scary.
7. It has not grown with your business; business requirements have changed, but the software has not kept pace.
8. You are searching for others in your organization to own and use the application.
Any of these signs could indicate a time to question the usefulness of the software. If you identify more than four, you need to start searching for a better software application, switch jobs, or double up on those yoga classes.
Profit Point, a leading supply chain optimization firm, adds total delivered cost and margin at the customer location-product level of detail to its supply chain network design software.
Profit Point, the leading supply chain optimization consultancy, today announced the release of an update to Profit Network™, a supply chain network design software that is used by supply chain managers all over the world to gain visibility in to the trade-offs they will face when designing or optimizing a global supply chain. In addition to several other new enhancements, Profit Network now allows users to analyze and report on the total delivered cost and the resulting gross profit margin for all products delivered to each customer location.
“With the ever-increasing availability of granular data across the supply chain, many of our clients have expressed a strong interest in analyzing and reporting on the total delivered cost of a single product or set of customer products,” said Alan Kosanksy, Profit Point’s President. “Previously, it was quite a challenge to understand how costs accumulate over time from raw material procurement through manufacturing, inventory, transportation and customer delivery. Now our customers are able to see the true total cost for each unit of product delivered to each customer. This will be a powerful tool in helping them evaluate their product and customer portfolios.”
In addition to total delivered cost, now Profit Network also enables more control over source-destination matching, as well as inventory levels by establishing minimum and maximum number of days of inventory demand.
“Profit Network software has been helping Fortune 500 companies around the world build more robust and profitable supply chains for more than 10 years,” said Jim Piermarini, Profit Point’s CEO and CTO. “Over that time, the dramatic increase in data availability across the supply chain has provided us tremendous opportunities to solve unique and critical problems in a variety of supply chain networks.”
In addition to Profit Network, Profit Point’s line of supply chain software also includes Distribution and Vehicle Planning, Sales and Operations Planning (S&OP), Production Planning, Scheduling and Order Fulfillment software.
About Profit Point
Profit Point Inc. was founded in 1995 and is now the leading supply chain software and consulting company. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including Dow Chemical, Coca-Cola, Lifetech, Logitech and Toyota.
Supply Chain Survey 2013:
Gaining Competitive Advantage
If you’re reading our blog, you are probably someone who is deeply interested in supply chain improvement. So we’d like to invite you to participate in this brief survey. And in return, we will send you exclusive, early access to the results of the survey along with our analysis .
Your insights and experiences are very important to us. And we are hosting the survey on a trusted, 3rd-party site so your responses will remain completely confidential. The survey is relatively short and should take only 3-4 minutes to complete. Please take a few moments to complete the Supply Chain Competitive Advantage Survey.
Start the Supply Chain Survey:
Gone are the days that supply chain was merely an expense. These days, savvy decision makers are gaining advantages over the competition by leveraging the data and tools available to them. In this survey, we will be exploring the methods, tools and processes that supply chain professionals utilize to gain competitive advantage via their supply chain.
Profit Point announced that it has successfully completed a distribution network optimization project with the hydrogen peroxide business team at Arkema Inc. Arkema is a global chemical company and France’s leading chemicals producer. Profit Point is a leading supply chain optimization company, delivering solutions to global manufacturers to optimize their supply chain networks, distribution plans and S&OP processes using a combination of targeted software and consulting services.
In the very competitive hydrogen peroxide market, Arkema’s objective is to continuously improve product availability and customer service across North America, while simultaneously managing costs throughout the supply chain. Profit Point examined Arkema’s distribution options from manufacturing to the end customer to develop supply chain options to provide the right level of customer service at the best total delivered cost.
“The team at Profit Point developed an understanding of our business and they analyzed complicated data and made it easy to understand,” noted Ed Gertz, Arkema’s Director of Supply Chain for hydrogen peroxide. “They made it easier for us to see how different distribution infrastructure options impacted our cost and our service, which gave us the confidence we needed to make significant changes in our terminal network.”
The solution combined Profit Point’s supply chain design software, Profit NetworkTM, and the consulting team’s supply chain optimization expertise. By leveraging existing enterprise data, Arkema was able to develop an actionable infrastructure plan that meets the business’ strategic objectives.
“This is a classic example of the type of benefits large manufacturers can see when they bring together the right stakeholders and the right process, ” added Ted Schaefer, Director of Logistics and Supply Chain Services at Profit Point. “It reminds me a lot of what my Italian grandmother used to say about cooking, ‘If you choose the best ingredients, you will like the result.”
About Profit Point
Profit Point Inc. was founded in 1995 and is now a global leader in supply chain optimization. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including Dow Chemical, Coca-Cola, Lifetech, Logitech and Toyota.
A global chemical company and France’s leading chemicals producer, Arkema is building the future of the chemical industry every day. Deploying a responsible, innovation-based approach, we produce state-of-the-art specialty chemicals that provide customers with practical solutions to such challenges as climate change, access to drinking water, the future of energy, fossil fuel preservation and the need for lighter materials. With operations in more than 40 countries, some 14,000 employees and 10 research centers, Arkema generates annual revenue of $8.3 billion, and holds leadership positions in all its markets with a portfolio of internationally recognized brands.
Building applications, especially custom ones, carries with it the burden of answering the question: Does this do what the customer wants?
With complicated systems with many interacting features and business rules, answering this question can be daunting. In fact, evaluating the answer can be daunting too, from the perspective of the customer. Having the sales guy check some boxes in a questionnaire, or watching a demo just doesn’t leave you with the assurance that the application with handle all the business requirements, from either perspective, the vendors or the customer. Everyone I have spoken to who has sold complex software, or who has participated in the purchasing process of software has expressed the same doubt. They are just not sure that the tool will be a good fit. As we all know, that doubt does not always prevent the purchase of the software, as each organization has its own level of risk tolerance, and trust in the vendor’s brand or reputation. Often these other considerations can outweigh the amorphous doubt that some folks might feel. How can one quantify that doubt? Frankly, it’s a quandary.
This thought got us at Profit Point thinking… Wouldn’t it be great if there was another way to evaluate the goodness of fit or an application, or the appropriateness of the parameter settings, to match the business needs of an organization. Would it be great if there was a way to eliminate (or greatly reduce) the doubt, and replace it with facts. Either a business rule is obeyed or it is not. Either a decision is made according to the requirements, or it is not. Let’s eliminate the doubt, we thought, and the world would be a better place. (well a little bit anyway).
There are many processes for testing an application as it is being developed, with writing test scripts, and evaluating the results. All these are based on testing little pieces of code, to ensure that each function or sub routine does what it should do in each case of input data. These processes work fine in our opinion, but only when the sub of function is able to be considered independently form the others. When the system has functions that interact heavily, then this approach doesn’t reduce the doubt that the functions may conflict or compete in a way that the whole system suffers. How then to evaluate the whole system? Could we treat the entire application as one black box, and evaluate the important business cases, and evaluate the results? This is exactly what we have done, with the effect of reducing the doubt to zero about the suitability of the application for a business.
With several of our clients we have worked out what seems to be a great process of testing a complex software solution for suitability to the business requirement. In this case, the detailed level function testing methods were not open to us, since the solution relied on a Linear Programming technique.
This process is really just an amplification of the standard testing process.
- Define the test case, with the expected results
- Construct the test data
- Build or configure the application
- Run the Test using the Test Data and Evaluate the results – Pass or Fail
This is the standard process for testing small functions, where the expected results are clear and easy to imagine. However, in some systems where there many interacting rules and conflicting priorities, it may not be simple to know what the expected results should be without the help of the tool’s structure to evaluate them. Such is the case with many of our application, with layer upon layer of business rules and competing priorities… The very reason for using an LP based approach makes testing more complex.
In the revised process, we have, for each new business requirement:
- Construct the test case with the test data
- Build or configure the application
- Set the expected results using the results of the first pass build
- Re-factor the code and test until all test are passing
In my next blog I will show you the simple excel based tools we use to facilitate the test evaluation.
In practice, the process works well, new versions of the application go into production without any surprises, and with full confidence of the application management team that all the business requirements are 100% met.
No doubt – no doubt a better process.
By Jim Piermarini
March 4th, 2013 4:19 pm Category: Global Supply Chain, Operations Research, Optimization Software, Scheduling, Supply Chain Agility, Supply Chain Improvement, Supply Chain Software, by: Danielle Cohen Jarvie
In a recent sailing trip to Croatia, we lost our sailboat. Sounds outrageous, but it really wasn’t difficult at all. It was early evening when we anchored in the harbor and took our dinghy to shore for dinner. A few hours later, seeing the wind pick up, we returned to the spot where we thought we had left the boat and it had vanished. It was dark, very dark. Looking for the boat on the dark ocean at night was like looking for a needle in a haystack. After hours of searching, we finally found the boat headed out to sea, we had not let out sufficient line for the anchor. The harbor was surrounded by rocky cliffs, and we had no idea what course the boat had taken, and if it had incurred any damage in its renegade voyage. We shook a mechanic out of bed to evaluate if any damage had been done. After it was all said and done, we were very lucky, the boat was fine.
I can’t help but liken this to a manufacturing supply chain, without a business process to chart the way, without software helping to navigate and support the process and without people in place trained to captain the process, the business, like an unanchored sailboat, drifts into sometimes dangerous territory. Yet, this scenario is not atypical for many companies.
How do you know if the anchor is set on your supply chain? Here are some attributes:
- A clear and documented business process that serves as the guide to how you operate under normal conditions as well as defines flows for unexpected changes and events. As conditions change, the process should be reevaluated and assessed in an ongoing fashion.
- Software that supports the business process and enables users to react quickly to unexpected events making your business adaptable and flexible. Software should be tailored to your business needs, one that is one size fits all does not necessarily work for all products and customers.
- Trained people who are living the business process and using the software giving your business a competitive edge. Additionally, attention to detail and data driving the software is crucial and can have a big impact on the business.
To learn more about Profit Point’s Global Supply Chain services, please contact us.
Lesson 2: You may not know the best and / or ultimate design for a tool until you try it out for some time in the real world.
In my last blog post, I talked about the waterproof boots I received as a gift and how I never knew what I was missing out on until I received and started using those boots. In this blog post, I’d like to continue my story.
My waterproof boots were working just great for me. Our dog, Blue, loved walking out in the wet fields behind our house and I didn’t mind that my boots were getting muddy since I could easily wash them off. Several months after using my boots, I made an unfortunate discovery. My right foot was getting wet! Turns out my boots had developed a crack in the tread. While my boots had several features I really liked and duct tape worked as a temporary repair, I decided I had to replace my boots.
I thought about getting a new pair of the same brand / model but was concerned that there was a design flaw and that these boots were not sturdy enough to walk with on a regular basis. I decided to switch to a boot with a much better and stronger designed tread as well as one with the other features I really liked.
If I had gone to the store before owning and using the first pair of boots, I don’t think I could have articulated exactly what features I needed / wanted in a boot. It was only after having an extended real world experience with the boots that I was able to much more clearly and confidently articulate what I wanted in a boot.
This is a common theme with our supply chain change projects. Often these projects are a discovery process for us and our clients because neither of us definitively know a priori all the functionality that will ultimately end up in the finished tool. That is why our typical approach is to begin with a pilot project that includes the minimum scope required to implement the basic functionality. This allows for this process of discovery to unfold and while starting to deliver on the stream of anticipated benefits sooner rather than later. This allows for the future releases of the tool to have a very tight scope on only those items that we are both confident can be delivered and will achieve the anticipated benefits.
Are you ready to get started on this journey?
This quarter’s Supply Chain Quarterly magazine features an article by Dr. Alan Kosansky and Ted Schaefer entitled Is standardized software eroding your competitive edge? The article addresses the pros and cons of standard enterprise software packages and discusses how generic applications may not accommodate the processes that leading company’s utilize to gain competitive advantage.
Upgraded Vehicle Route Planner Software Improves Decisions in Distribution Planning, Fleet Sizing, Driver Productivity and Transportation Cost Reduction
Profit Point announces the introduction of Profit Vehicle Planner™ 3.1, a major upgrade to our distribution analysis and design software. Profit Vehicle Planner is designed for Strategic Logistic and Transportation Managers that have large fleets with multiple daily delivery stops and changing logistics processes. The software update includes a combination of new features and technical enhancements which combine to support richer scenario modeling for larger large fleets with multiple daily delivery stops and changing logistics processes.
Designed to be highly accessible and customizable, Profit Vehicle Planner (PVP™) uses standard Microsoft business tools for calculation and display of information, including Excel, Access and MapPoint. The software automatically creates and designs the optimal sales/distribution territories. It does this by dividing customers into territories and days of service, with each territory representing the volume delivered by one delivery vehicle and one driver over the course of the planning horizon. The objective of the proprietary heuristic algorithm used in Profit Vehicle Planner is to assign customers to territories that will minimize the number of trucks required to serve the customer volumes while delivering within the various common and business-specific constraints, including customer frequency of service, hours available per day, volume available per truck, unique equipment requirements and virtually any other custom constraint required.
“With 12 years in the field, Profit Vehicle Planner has been put to the test against some of the world’s largest supply chain distribution problems,” noted Jim Piermarini, Profit Point’s Chief Technology Officer. “Transportation best practices have expanded over time, so decision makers are looking for more comprehensive strategic logistics and transportation modeling solutions.”
With the new release, PVP’s expanded features include extensive customization of the software to tailor the territory planning solution to be cost and time effective to meet your unique and specific distribution requirements and the ability to use imported address data to automatically geocode customers for whom lat/long data is missing.
For companies that perceive distribution as mission critical, users have the option to integrate PVP deeply into their supply chain systems to import and export data in to their ERP system. Companies that seek the most cost-effective solution have the ability to import virtually any relevant data from an Excel template that includes the following:
- Customer data such as address, location, frequency of service, volume per stop, time required per stop, other data as needed
- Truck data such as size, days of the week that it is available, order in which it is to be scheduled, hours available each day, special equipment, other data as needed
- Warehouse and district data such as location and characteristics of associated trucks and drivers
- Time related data such as start date of planning horizon and number of weeks in the planning horizon.
- Product specific data such as unit of measure of the product being delivered
- Any other data required to accurately model unique constraints
Once optimized, users have the ability to review and assess the characteristics of the territories that are created using tables and maps to provide an enhanced visual experience. And to ensure the optimal distribution plan, users can manually move customers from one territory to another or from one service day pattern to another (e.g. from Monday-Thursday to Tuesday-Friday), if desired.
At the risk of sounding like a supply chain nerd, here at Profit Point, I get a similar sense of exhilaration in enabling our clients to increase the velocity in their supply chains by implementing decision support tools that enable faster and better decisions.
These decision support tools enable faster and better decisions in at least the following 3 ways:
1. Faster visibility to the data – By having a software tool that holds all the data needed to make a particular decision with automated interfaces to source systems, our users don’t have to spend countless hours combing through multiple spreadsheets and other software systems to get the data they need. We bring all the data needed together in one place for the user to be able to make effective decisions.
2. Faster understanding of the data – Supply chain decision support tools have huge amounts of data coming in and going out of them. Making sense of it all can be challenging. Typically what we do is build tools that allow the user to sort through all this data by:
a. Having graphical user interfaces that make it easier to understand what is going on. After all a picture is worth a thousand numbers any day of the week.
b. Show only the exceptions or problems that need to be resolved to help the user focus on what needs to be changed.
3. Faster processing of the data – Oftentimes we will automate tasks that are menial and time consuming or if the task is very complex it may be appropriate to employ an optimization or heuristic solution approach to speed getting to a feasible or better solution. We like to call these “Power Assist” tools that greatly ease the burden on the user while still giving them ultimate control over the decisions that are made.
Do you feel the need for more speed in your supply chain? Give us a call so we can discuss how we can help to get you moving faster.
Applying Lean Logistics Principles in Combination with Tactical Software to Improve Distribution Transportation Planning
May 23rd, 2012 3:56 pm Category: Distribution, Green Network, Profit Vehicle Planner, Profit Vehicle Router, Supply Chain Agility, Supply Chain Improvement, Supply Chain Planning, Supply Chain Software, Transportation, Vehicle Routing, by: Richard Guy
As the competitive environment changes the way companies do business, transportation managers are embracing lean principles mixed with tactical planning software to support cost reductions and quality improvements. Applying lean initiatives to supply chain and logistics operations is one method that allows businesses to reduce cost, but the marriage of tactical planning software with lean principles introduces a new approach and additional opportunity to eliminate waste.
Lean is a team-based form of continuous improvement that focuses on identifying and eliminating waste and increase of speed and flow of an operation, such as distribution of products. Waste can be defined as activities that do not add value for the customer.
A short waste target list for a distribution transportation planner may include the following:
- Underutilizing employees or behavioral waste
For example, managing a large delivery fleet with a relatively fixed, repeating delivery pattern will benefit from an optimal territory planning and routing solution. Since lean adds emphasis on waste, non-value added work, queue times, to traditional process analysis, improving the distribution and routing plan for a company’s fleet can eliminate waste in all of the above categories.
Selecting strategic territory planning software that will optimally divide a customer region into geographical “territories” based on customer delivery requirements can be an important first step in the lean process. Think of each territory is a contiguous area containing the customers that will form a single route, or a regular pattern of routes, over a day, week, month or other time period. Lean solutions can include optimal delivery territories shaped to minimize total travel and to equalize the delivery workload for drivers.
Most software packages utilize geographical mapping software such as MapPoint or Google Maps to generate a solution that will minimizes total travel miles while meeting customer service and delivery requirements. Some of these tools can also be personalized and customized to meet specific business requirements. Planning tools that create both territories and routes in a single integrated package appear to be the most popular.
Before implementing the territory planning software solution, let’s compare the results to the target list of waste. Transportation waste is minimized. Drivers (“employees”) become more productive since they now have a delivery territory designed to adhere to the driver profile, which may specify shift time and driving break intervals. Routes are optimized, so there is no more wasted motion time. Routes can be built to ensure sufficient inventory is available at all stops. Natural boundaries such as rivers, mountains, canyons and man-made boundaries such as rail tracks, major highways, canals can be model to create optimal delivery territories that are bounded by these constraints, thereby eliminating driver waiting to go around these obstacles.
In summary, managers that use transportation routing and territory planning software are following the lean principles to identify and reduce waste. Implementing the solution can potentially reduce transportation costs by 5% to 20% by decreasing miles traveled and increasing on-time delivery while dramatically increasing driver productivity. Lean principles when married to tactical planning software can be competitive weapons and a great advantage in tough economic times. Start considering lean logistics principles in conjunction with territory planning software applied to distribution transportation problems as opportunities to reduce waste.
Sales and operations planning (S&OP) is an integrated business management process that enables a company to continually balance and manage the supply chain supply and demand to achieve its strategic and tactical business objectives. More and more business leaders are relying on S&OP to align and improve decision making across the disparate parts of their organization. And, many companies are still adopting and improving the techniques and tools that they use to improve S&OP.
So this year, we conducted an S&OP Survey of key decision makers to learn more about their challenges, concerns and expectation for 2012. Business leaders from a variety of companies and industries were polled. Here’s what we learned:
- Many companies lack the metrics needed to capture the benefits from S&OP
- Scenario and sensitivity analysis is the tool of choice for S&OP planners who understand that sales forecasts are imperfect
- More companies are beginning to collaborate with suppliers and customers to improve S&OP
- For many companies, point-of-sale (POS) data may be the key to effective sales and operations planning
To read the complete report, including our conclusions, click the link below:
June 16th, 2011 9:00 am Category: Enterprise Resource Planning, Global Supply Chain, Inventory Management, Press Releases, Supply Chain Improvement, Supply Chain Planning, Supply Chain Software, by: Editor
Profit Point, the leading supply chain optimization software and services company, today announced the release of its Profit S&OP software to complement it’s S&OP consulting services. Profit Point’s combined S&OP solution provides business decision makers with the process and tools to manage and optimize sales and operations planning across the supply chain.
The Profit S&OP software tool is fully-customizable to meet the needs of supply chains across all industries and is designed to improve tactical planning for the key decision makers across a company, including finance, sales, manufacturing, logisitics and supply chain. The software provides a centralized dashboard to gain insights and control over a company’s supply chain, including features to enhance collaborative forecasting and improve manufacturing, distribution, and inventory decisions.
“Global manufacturers struggle to accurately plan for global demand across their product lines in a timely manner,” noted Alan Kosansky, Profit Point’s President. “Our S&OP solution solves this problem with a combination of effective processes and a shared planning tool that provides one set of numbers for the key stakeholders across the entire supply chain.”
Using Profit Point’s S&OP solution, manufacturers can coordinate with their supply chain planners across the globe to build accurate, detailed manufacturing and distribution plans quickly and integrate with point-of-sale demand tracking systems. And, the software connects with existing ERP systems, such as SAP® and Oracle®, so analysis and decisions are up to date across the entire organization.
“Improved planning can help any large manufacturer reduce inventory excess and capital risk.” said Jim Piermarini, Profit Point’s CEO. “But the key to successful planning includes the right technology and the right process to align employees with the company’s strategic objectives.”
Profit S&OP has an integrated optimization engine that seamlessly drives the best scenarios to the forefront of a tactical planning sessions. Throughout the process, decision makers are able to visualize and test multiple future scenarios to achieve a collaborative, cross discipline decision making process. Key features in the software include the ability to automatically generate an optimal tactical plan down to the bill of materials (BOM) level, integration with existing ERP data warehouse, multi-period planning horizon, scenario analyzer to systematically assess multiple future scenarios, complex BOM exploration and the ability to visualize plans, timelines and bill of materials to correct bottlenecks and reduce excesses.
To learn more about Profit Point’s sales and operations planning software and services, call us at (866) 347-1130 or contact us here.
About Profit Point:
Profit Point Inc. was founded in 1995 and is now a global leader in supply chain optimization. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point’s has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including Dow Chemical, Coca-Cola, Toys “R” Us, Logitech and Toyota.
Here at Profit Point we regularly hear from clients with well established Enterprise Resource Planning (ERP) systems that they need something more. ERP systems are excellent for doing certain things including:
- Providing central repositories of data
- Enabling cross functional work processes within and across companies
- Costing of goods
- Planning resources and materials at a high level
However the more complicated your business work processes and manufacturing production processes the less sufficient a standard ERP system will be in providing the best decision support functionality. Some of the complications that require decision support systems (DSS) and which we have been helping clients deal with lately include:
- Work processes to handle make to order versus make to stock material assignments
- Allocation of inventory to customer orders when in an oversold position
- Sequence dependent setups / cleanings of manufacturing equipment
- Scheduling of production sequenced through a “product wheel”
DSS are necessary because of the complexity of first finding a feasible solution and then having some means of sorting through the huge number of feasible options to find a “good” or “optimal” solution. DSS help in these kinds of situations to:
- Reduce costs
- Reduce manufacturing lead times
- Improve customer service
- Increase revenue
ERP systems are a necessary part of being able to deliver a DSS by providing the data necessary for making the decisions in question but don’t have the following:
- Ability to be tailored to a specific work process or manufacturing environment
- Advanced analytical capability to sort through the complexity and volume of options to get to a “good” or “optimal” solution
- Graphical user interface tools to be able to allow a user to visualize the data in a way that gives them the insights needed to make decisions
At Profit Point we specialize in listening to our clients needs and then building DSS to unlock improvement opportunities which enable our clients to outdistance the competition.
Okay. I am an anomaly. I live in Utah and drink coffee. The majority of the people that live in Utah do not drink coffee, and that is OK, but I do. So, is there a shortage of coffee Cafés in Utah? No. There are many cafés and several that serve outstanding coffee.
We have an exceptional espresso café downtown, located on a side street off of Main. They roast their own coffee and use triple certified organic grown beans. It is the type of place the local coffee lovers go to hang out and have good conversation over a morning or afternoon latté or espresso. Possibly the best coffee I have ever had. What is interesting to me is that a large percentage of the residents in my area do not even know that this café exists.
So what is my point? When it comes to outstanding services or products most people are unaware of what is available, primarily because it does not fit into their lifestyle or what they’re accustomed to. I believe you can transfer this similarity to the business world. Manufacturing logistics and transportation people become accustomed to doing things a certain way. Over time they may become blind to ideas for improving the supply chain. They are unaware of an exceptional Supply Chain Café, even when it is located just seconds from a combination of keystrokes and Google.
It is not their fault they are missing the best latté available. We, as consultants, who prepare those delightful solutions from the Supply Chain Café menu, have probably not done the finest job of promoting our services and software to your neighborhood, but that is changing.
There are many empty cups in the supply chain, waiting to be filled with successful solutions. Supply Chain and Logistic managers tackle difficult supply chain problems every day, but they are so focused on getting their job done and making it through the day that they have little time to think of alternatives that may improve their processes and well being. I am not sure how we can help everyone, so let’s focus on the window shoppers. These are the ones that are aware of the café, but have never been inside. Maybe you are one?
If you are reading this blog, then you must be a window shopper. I am guessing you are looking for a better espresso. OK, you found “Profit Point”, although you may not know what we do. Guess what? Help is on its way. We can share our menu with you. We just published four videos that will introduce you to the Profit Point team and what we do. Embrace three minutes out of your day, select one of the videos, and watch it. Learn how we help companies improve their supply chain, by serving the best coffee with a smile.
Yes, you can improve your supply chain with our help. The supply chain solution that you are looking for, is about to be yours. And if you place an order, we can fill your cup to the top, with the “good triple certified” stuff. If you cannot seem to find that special item on our Supply Chain menu, then no fear, we love special orders.
So, is there a shortage of Supply Chain Cafés? No. You just need to find the one that serves the optimal latté. I know it’s out there somewhere.