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APS -Why is the implementation decision so hard?

March 21, 2009

What is really hard to do is to get people to move to APS (simulate the factory when planning). The facts are that management relies on averages and history to run their factories. Weekly and monthly meetings for factory status usually create and use averages, static calculations, and history for current status and future predictions. This approach diminishes a factory’s ability to react to current factory status and its future behavior. History is important to report and learn from, but its recurrence in the same detail is rare. The results are plans that lead to sub-par factory performance and chaotic situations (expediting, overtime, additional costs). Understanding the detail of constraint areas and using APS’s discrete event simulation for prediction will move a factory from average performance to excellence. This always seems to overwhelm management (“We don’t have people or time to do that!”). A complete analysis of the factory to create the simulation model is not needed. A focus on understanding and analyzing the known factory constraints will yield big improvements in planning.

History and averages that are typically used in MRP, ERP, or spreadsheets degrade the ability to estimate the future. In a less complex factory, it may give you 75% accuracy. In a complex industry such as semiconductors, the accuracy is much lower. This seems to be good enough for most management in the USA (“We can manage the factory this way.”). Convincing people that their plans are only at 75% accuracy (or worse) and getting them to apply manpower to improve by implementing APS is very HARD to do. Why don’t we seem to be trying to get closer to 100%? Is it because the competition is equally lethargic? Is it we are too timid to change the current planning system? Is it organizational resistance? What do you think?

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