Delivering on APS

Traditional planning and scheduling tools such as manufacturing resource planning (MRP) use cumbersome procedures based upon predefined heuristics. As a result MRP systems aren’t really capable of change in response to demand, or to shifts in material availability or capacities (be them plant or labour).

Predominantly these systems plan materials and capacity separately; one system ignoring the limitations of the other. The end result is a plan that can’t be executed in the real world and this leads to inaccurate production schedules, false delivery dates and some very unhappy customers.

Unlike MRP, APS plans and schedules all facets of an organisation by simultaneously taking in to account available materials AND capacity. The end result is a more realistic supply chain plan which means deadlines met and customer orders fulfilled on time.

APS provides value in specific environments where simpler planning methods can not adequately address the complex trade offs between competing priorities.

For example, APS can pay dividends to enterprises working with one (or more) of these characteristics:

•Requirement to trade off key costs across the supply chain (e.g. Procurement vs. Production vs. Logistics vs. Storage vs. Labour)

•Production intensive environment with multiple facilities, variable routings and recipes

•Asset intensive operations requiring maximum utilisation

•Seasonal behaviour of key drivers (demand, supply, and capacity)

•150 million turnover plus, with a large degree of operational variability

•Highly dynamic sourcing (where to make, make or buy, where to buy, where to ship-from decisions)

If your business features characteristics of this kind read on. If not, APS might be the equivalent of using a sledgehammer to crack nuts.

APS technologies can help a company at three planning levels within the business — strategic, tactical and operational. At a strategic level the system must look at long term success requirements such as infrastructure investment (i.e. demand network design) and market positioning (i.e. domestic / export, services / retail). At a tactical level that same business’ APS must focus upon mid term success requirements, how best to maximise returns within 12 – 18 month time frame (i.e. where to make, what shift patterns to employ, what downtime to schedule). And at a purely operational level the focus is much more immediate, maximising efficiencies in 1 — 6 weeks. (i.e. detailed production schedule, transportation schedule).

APS is not a ‘plug and play’ solution to all your planning and scheduling problems. Whilst the benefits are there to reap there is also a large potential barrier to consider:

The APS model serves as an interpretation layer, sitting between the mathematical solver engines which do the analysis and configuring, and the business. As a result,

APS is heavily reliant on the ability of practitioners to accurately model individual supply chains. Practitioners need to ensure that all material flows and corresponding costs and constraints are available to the system to accurately reflect business behaviour.

If for example, your team is in the habit of overstating capacity to secure a safety margin; your APS plans for scheduling to maximise efficiency will be inhibited. To that extent the system is as good as the information it is fed.

Further, the potentially large amount of data which the APS system may require to function effectively could be more than your existing ERP system can handle. This factor alone may prevent some businesses from ever realising the total benefits of APS.

APS solutions have no boundaries so it’s crucial to clearly define the scope of the challenge – otherwise modelling will be endless and the output useless.

It’s important to recognise that supply chain projects cross functional boundaries so a successful optimisation must ensure that all department parties are equally optimised. The most optimal solution for a business therefore, is one in alignment with supply chain and business goals.

When running a pilot, take a cross section of the business or product portfolio. Aim for a sample that is concise enough to evolve with the pilot but also exercises the most challenging constraints and costs within a supply chain. Analyse the results carefully before proceeding. If the pilot does not make sense then the confusion will only be magnified on a full APS rollout.

This article was written by Shaun Phillips, solutions architect, Infor. Shaun has delivered business benefits, using APS technologies, to companies across Australia, Asia, and Europe for more than 10 years.

Efficient supply chain solutions

While many companies strive to make the most efficient gains through available channels of outsourced supply chain management and logistics, it is an interesting point to note that many tend to overlook their own premises and perhaps are operating with a low level of internal handling efficiency.

It is vital a materials handling system is completely integrated to maintain product flow, and companies should use their contract transport services as a de facto warehousing component.

Smart operators are the companies that have studied the logistics market and have seen positives in utilising transport and freight services to eliminate costly warehousing and quicken truck turnaround times.

Key to this becoming a widespread reality is knowing exactly how to best set up loading and unloading systems to work in synchronicity with transport company services.

Until recently, operations managers have been content to receive stock through an incoming goods dock, store it temporarily while organising transport to its client, and then eventually send it again on another truck.

This has been occurring in virtually every industry including perishables, food and beverage, engineering, mining supply, agricultural and rural, primary industry, retail and consumer, and almost any other industry of which one can think.

But with an optimised materials handling system put in place, smart companies, instead of storing stock on the premises for an indefinite period, rarely have to see their goods.

Instead, they use a clever materials transfer system on their site that instantly moves goods from incoming to outgoing without storage, or they have equipped their transport carrier with appropriate systems to load and unload palletised or non-palletise product and transport it directly to their clients without warehousing.

Firstly, with floor charges per metre continually rising, the elimination of reliance on warehousing is an automatic, and enormous, cost saving.

Reduction in multi handling of stock also reduces time and operating costs and ensures smoother movement of product from manufacturing base or bond store to the customer

In the case of perishables, reduction in supply chain steps can only be of benefit to handlers of product with limited shelf life.

Using its existing product and technologies alongside solution-specific developments, Industrial Conveying Australia is currently developing several turnkey projects for Australian companies undertaking this cultural change.

Among these technologies are:

• Automated transport loading and unloading systems including handling unit loads or complete truck loads.

• Pallet handing systems such as multi-lane palletising equipment, to organise truck loads ready for dispatch.

• Elevators and spiral conveyors for non-palletised goods transfer between different floor levels, powered roller conveyor and lift tables.

For more information contact Industrial Conveying (Aust) Pty Ltd. on 

Making the Connection

Supply-Chain Council Chief Technology Officer Joe Francis, an acknowledged world expert o framework-based Business Process Models will hold a seminar to help practitioners learn practices that best service customers.

This seminar will walk participants through a simple, reliable and scalable process for making the link using the SCOR® operations reference framework of metrics, processes, and best practices. Case studies are presented from diverse industries illustrating the power of the approach. The Supply Chain Operations Reference model (SCOR) is a process reference model developed and endorsed by the Supply Chain Council as the cross-industry standard diagnostic tool for supply chain management. SCOR enables users to address, improve and communicate supply chain management practices within and between all interested parties.

SYDNEY

Date: Thursday 26 July 2007

Time: 7.30am registration and breakfast 8.00-10.00am seminar

Venue: Sydney Business School Level 14, 175 Liverpool Street, Sydney NSW 2000

Cost: AUD$25.00

RSVP: Catherine Buckley, SCC cbuckley@supply-chain.org Tel: (+61) 2 9006 1059 / www.supply-chain.org MELBOURNE

Date: Thursday 26 July 2007

Time: 2.30pm registration and refreshments 3.00-5.00pm seminar

Venue: Victoria University, Footscray Park Campus Conference Room 2, Level 6, Building K Cnr Ballarat Road & Geelong Road, Footscray (Melways 25 F4)

Cost: AUD$25.00 ($15.00 students)

RSVP: Alison Caruana-Smith, ILSCM ilscm@vu.edu.au Tel: (+61) 3 9919 6257 / http://ilscm.vu.edu.au/

BRISBANE

Date: Friday 27 July 2007

Time: 7.30am registration and breakfast 8.00-10.00am seminar

Venue: Brisbane Riverview Hotel Cnr Kingsford-Smith Drive & Hunt Street Hamilton QLD 4007

Cost: AUD$25.00

RSVP: Tel: (+61) 7 3364 0700 http://www.qmisolutions.com.au/events.asp?pn=events

World’s first in distribution technology

Australian supply chain standards association GS1 Australia is the first in the world to introduce an online GS1netTM Validation Engine (VE) following the introduction of the new Global Data Synchronisation NetworkTM (GDSN) standards.

GS1 Australia released its GDSN compliant service, GS1net, earlier this year but it has just introduced the VE and is now working with its supply chain communities on transition to the new platform. 

GS1 Australia believes that the validation process will help Australian industry meet the increasing requirements for data accuracy, which is an essential component for successful supply chains.

The GS1net platform will leapfrog global peers by incorporating data validation services as part of the GS1net platform.

The GS1net Validation Engine will provide complete validation of more than 300 retail and industry business rules required by the GS1net platform through a web based portal.

GDSN is an internet-based, interconnected network of data pools with a global registry that enables companies around the world to exchange standardised and synchronised supply chain data with their trading partners.

Leadtec, an Australia leader in b2b e-commerce and GS1 Alliance Partner, was selected by GS1 Australia to develop and host the new GS1net VE functionality.

GS1 Australia COO Mark Fuller says Leadtec was an obvious partner for the GS1net VE project with its data synchronisation and b2b e-commerce expertise.

“GS1 and Leadtec have partnered on projects like the GS1 Community Management Tool and the EANnet Validator past and the GS1net VE is an exciting extension to our partnership.”

Managing Director of Leadtec Scott Needham says Leadtec is excited to be involved in such a groundbreaking project with clear business benefits to Australian supply chain communities.

“The platform has been implemented using an On Demand model allowing for the delivery of powerful functionality while being highly cost effective,” he said.

GS1 Australia is already globally renowned for the widespread adoption of its EANnet® platform for data synchronisation in Australian supply chain communities.

General Manager at GS1 Australia Richard Jones says traditionally EANnet members went through an accreditation process including data validation prior to becoming EANnet ready.

“The new GS1net Validation Engine will ensure that member data is validated with every upload ensuring the highest level of data quality,” Richard said.

Visit www.gs1au.org.

Executive Breakfast Seminar series

Green & Lean Supply Chain Initiatives, hosted & sponsored by AirRoad Group, will be focused on delivering the most up-to-date information in supply chain initiatives on carbon management, benchmarking supply chain performance and cost & carbon considerations in freight distribution.

Reducing Carbon Emission = Reducing Costs

This is a must-attend event aimed at senior executives directly or indirectly involved with supply chain improvements and cost considerations.

Companies and their keynote speakers and topics include:

Topic:

Schaefer Sydney comes alive

Display and Storage Techniques (Aust) Pty Ltd has joined forces with the world’s largest supplier of industrial storage equipment, SSI Schaefer, and at the same time secured two industry heavyweights.

Graham Eastick and Martin Bates have joined Display and Storage, to form Schaefer Sydney, SSI Schaefer’s newest distributor. Schaefer Sydney will operate in NSW and the ACT, offering a wide range of industrial storage equipment from one source. 

Martin Bates said: “It is very exciting taking on the Schaefer brand in a market like Sydney. Graham Eastick and I will continue the great work done by the Display and Storage team to date bringing significant presence and in turn market share to Schaefer.

“Our customers will enjoy the best value-adding solutions from a team of industry professionals. As we build our team, customer outcomes will be the focus,” he said.

Operating out of its Moorebank premises, Schaefer Sydney claims to have the widest range of stock on hand in NSW, covering industrial pallet racking, hand-loaded shelving, small parts storage systems, multi tier mezzanine floors and a wide range of plastic storage containers – in fact, anything at all to do with storage. 

For more information on Schaefer Sydney on (02) 9602 0022.

Transport & logistics industry goes techno to find new recruits

The nation’s fastest growing industry, transport and logistics, is tackling its ‘blue singlet’ image head-on to attract young Queenslanders into its workforce.Low unemployment, an ageing workforce, and a poor image are among the factors that are making it tougher and tougher for transport and logistics employers to recruit new workers.

Queensland Transport, Trade, Employment and Industrial Relations Minister John Mickel said the Queensland Government was working closely with the industry on innovative recruitment techniques and improved career paths, as well as making a massive investment in training under the Queensland Skills Plan.

The latest recruitment tool is a five-minute DVD, "Get your career moving in T&L" that visually captures career opportunities in road, rail, sea, and air transport.

"Many people aren’t aware of the magnitude of the transport and logistics industry and the exciting opportunities it offers for people of all ages and at all stages of their career," Mr Mickel said.

“Unfortunately, there’s still the stereotype of the truck driver in the blue singlet, but a career in transport and logistics covers air, rail, road and sea and includes air traffic controllers, marine engineers and logistics planners.

“The amount of freight moved around the country is expected to double by 2020 and we need to replace and boost the current 112,000 Queenslanders who are working in the industry now.”

Funded by the state government and produced in partnership with the Transport Industry Workforce Advisory Group, the new DVD will be screened in wide range of forums to jobseekers of all ages and backgrounds.

The state government is also working with schools, local communities, training providers and industry on school-to-work training programs for transport and logistics that give young people the pathways they need to progress within the industry.

Mr Mickel said the transport and logistics industry contributed $37.9 billion to the Queensland economy and needed to replace and renew its multifaceted workforce to maintain its performance.

“I’d urge young Queenslanders to check out the opportunities that a career in transport and logistics can offer,” he said.

For more information about the DVD, and career opportunities in transport and logistics, contact Queensland Transport’s Industry Capability Unit on

A good fit

Generously sponsored by ProActive Recruitment, this issue of Logistics provides a special Supply Chain & Logistics Career and Salary Guide. In an 11-page report, we analyse the Australian talent marketplace. Skills shortages are on everybody’s lips, but what is Australia’s approach to education, training and professional development? Industry leaders unravel the issues and light the direction for change.

Salary trends and associated practices provide a strong barometer for economic activity. In June, we present April 2007 salary figures and current data representing views across the industry about recruitment and retention strategies and the expectations of today’s employees.

While salary guides can inform companies about the key drivers of change, it’s important to seek specific advice. “The perception of packages in the market is considerably different from the reality, with factors such as seasonality often overlooked,” says ProActive Recruitment director Ross Christensen.

“Apart from Western Australia where we could arguably be seeing a form of hyper salary growth, in some cases 30-50 per cent increases since August, packages are moving in line with supply and demand for candidates and the employer’s ability to pay.”

Reasons for state differences include the cost of living and the nature of the market. For example, NSW is a significant finance & IT centre with less of an industrial base compared to Melbourne. Talent is therefore more easily attracted to these sectors than that of the supply chain. Clearly, packages must also vary according to the size of an operation. “There must always be a link between value add and the package,” says Christensen. “It’s logical that a South Australian business with 20 staff and $10m in income is not rewarded to the level of a Melbourne operation with 200 staff and $150m in income.”

Like all goods and services, labour is difficult to compare across borders. UK packages are considerably higher than those in Australia, but so too is the cost of living. “In the ‘expat’ market, packages have cooled in the traditional regions of Asia, but are still extremely attractive in the high growth or danger zones,” Christensen observes. “These are short term career moves however, with associated risk.”

The major competitor to the supply chain sector is still Australia’s buoyant mining industry, in some areas, forcing salaries up by over 20 per cent.

But to what extent is the dollar a motivating factor for the current market? “For too long business has been highly reactive to salary demands, with major players in the transport sector believing short term measures such as counter offering employees will retain them,” says Ross Christensen.

Research consistently shows flexibility, applied both to salary packages and working conditions is equally valued. “Training, environment, proximity, brand, prospects and working hours all play an essential role in an employee’s decision making process,” says Christensen. “Over the past 20 years, I’ve rarely heard a client say the only factor for leaving or joining a position is remuneration.”

Salary packages of the future will be more closely aligned to market forces and business aims. For example, there’s currently a significant shift of around 10-20 per cent towards packages linked to business and individual performance.

Success will come for those supply chain and logistics employers that take a holistic approach to the business of attracting and nurturing their people.

Anna Game-Lopata — Editor

anna.game-lopata@reedbusiness.com.au

Health network

Sterling Commerce, a subsidiary of AT&T, has announced the deployment of its Gentran Integration Suite™ in support of the Health Supply Network electronic commerce service.

The Sterling Commerce supply chain implementation follows a three-year agreement signed earlier this year by Wollongong-based 4Solutions Enterprises with Australian Pharmaceutical Industries Limited, Sigma Company Limited, and Symbion Pharmacy Services, to manage the Health Supply Network.

As part of the agreement, 4Solutions Enterprises is contracted to deliver enterprise-wide IT integration between the wholesalers and distributors servicing around 5,500 retail pharmacies across the country.

Time-to-delivery and reducing the amount of stock in the warehouse is critical to economies of scale in a competitive market. 4Solutions Enterprises can now provide its three wholesalers with greater supply chain visibility.

Airfreight security report released

Addressing the demands of today’s heightened security environment is about to become easier, following the release of a definitive new Airfreight Security Report by the Air Freight Council of NSW (AFC NSW).

Carried out by security consultancy Intelligent Risks (IR) Pty Limited, the project reviews the effectiveness and determines the impact of Australian security legislation and regulations affecting air cargo operators using Sydney Airport.

While the Airfreight Security project focused primarily on the impact on the industry of post-September 11th aviation security legislation and regulations, it also covered in-depth, wider security issues related to law enforcement and air cargo security.

Over the past five years industry appreciation of the security environment affecting aircraft and air freight has changed considerably, demonstrating the necessity of a more robust and co-ordinated security regime than that historically applied.

The Australian and NSW Governments, which have already implemented a number of commendable security arrangements, indicated strong interest in the report’s findings, and in conjunction with the AFC NSW, are in the process of identifying follow-on actions that will further address industry wide issues, highlighted in the report.

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