The planners for the distribution centers (DCs) were stumped.
While deliveries had been planned to arrive throughout the week (and were, in fact, arriving pretty much as scheduled), their new planning system kept telling them that all deliveries would only be made on Friday.
The setting for ‘The case of the Friday trucks’ was a large beverage manufacturer that was rolling out a new ERP system. As the manufacturer wanted a high degree of synchronization between production and logistics, it was also implementing an Advanced Planning & Scheduling (APS) system to:
- Maximize direct loading of pallets onto trucks at its main plant
- Maximize cross docking at DCs by synchronizing the arrival of trucks from the plant with outbound transportation
The mystery surfaced when we ran the first large scale ERP-APS integration tests. Great results at the plant with reduced inventory and improved truck utilization. Chaos at the DCs.
Something was obviously wrong, but what was it? Preliminary investigations revealed that the APS system had indeed sent the ERP system planned stock transfers for deliveries to DCs throughout the week. So why was the ERP system shifting all delivery dates to Friday?
Until they had accurate delivery times, the planners at the DCs simply couldn’t synchronize incoming and outgoing transportation. It was clearly time to run what I call a ‘police investigation’ of processes: Who or what was tampering with the data?
The short answer turned out to be the logistics planners at the plant.
The longer, and more interesting, answer goes beyond ‘whodunit’ to why they were doing it.
Before a planned stock transfer could be converted to an actual delivery, these planners had to run a material availability check in the ERP system. This check was based on stock on hand, and expected supplies from planned production. However a combination of factors meant that the planners kept getting false negatives:
(i) The production runs were long – sometimes as long as a few days for a single SKU
(ii) The ERP system only registered the availability of a product at the end of a production run
It’s important to note that there was, in fact, no need to run a material availability check in the ERP system: The APS system had already factored everything that was happening in the plant and DCs. Unfortunately, the planners at the plant had been given strict instructions to run a successful check before scheduling deliveries. And so they did. They made absolutely sure that the checks delivered a positive result by shifting all deliveries to the end of the week. Of course they had no idea that their little ERP workaround would affect delivery times in the APS system and create the mystery of the Friday trucks.
The solution was simple and produced instant results. Once the planners at the plant stopped running pointless material availability checks in the ERP system, the planners for the DCs began receiving accurate delivery times and could actually plan.
The customer was delighted that a faulty process had been identified and – thanks to my outrageous French accent – promptly dubbed me Inspector Clouseau.
Le morale de l’histoire? An APS implementation is never just an APS implementation. To ensure the success of a project, an APS consultant must take a holistic approach that encompasses people, processes, and systems.