Most vacation planning requires 2 distinct ways of decision-making:

  • People typically plan where to go, which flights to take, where to stay, etc. way in advance. This is for good reasons. One must narrow down these things to ensure availability as well as to take advantage of the discounts available when one books early. Along with this, one typically creates a list of must-do activities and leaves some buffer time to allow for new experiences.
  • As one gets closer to the actual travel, or even during the vacation, they make a different series of decisions. Exactly where will one be at 2 p.m. on a particular afternoon? For some it could be doing nothing by the pool/beach; for others, it could be an early afternoon run of a particular show. And it could certainly be one or the other on different days of the vacation.

The first series of decisions appropriately describes planning the vacation. The second series of decisions is probably best described as the scheduling of activities during the vacation. You can schedule some of these activities in advance through advance booking, while others occur on the day of the activity. Both make the vacation fun and memorable.

In a similar sense, manufacturing organizations plan things in advance. How many shifts to run, where to order the raw material to buy, how much inventory to carry, etc. There are set processes under the umbrella of Sales and Operations Planning (S&OP) or Integrated Business Planning (IBP) that help with this planning. This can include:

  • Demand planning
  • Supply planning (including MRP, DRP, and CRP)
  • Inventory Planning
  • Transportation Planning
  • Etc.

This is typically done at a high level (say, product family, location and month or product, location, and month) and, by design, is not geared towards detailed actions. This then necessitates converting the plan to something actionable, something called a schedule. This occurs at a detailed level, such as SKU, Location, day or shift, etc. In this step, we answer the questions.

  • What will I run on this machine next Tuesday?
  • How long will that run be?
  • When will I begin to switch over to the next product?
  • What is the next product that I will make?
  • Is the transition a good one (sequence-wise, time of the day-wise)
  • Etc.

When companies begin to think about investing in software tools to do this type of planning and scheduling, they often ask; What will my return on investment (ROI) be if I implement this? They might be able to articulate the savings and benefits in qualitative terms. Things like:

  • All the supply and demand data will be in one place (one source of truth).
  • Running the decisions through real data should help improve the data quality in the ERP.
  • There will be one published schedule for everyone to refer to.
  • I can manage many SKUs.
  • I should see fewer errors compared to the current spreadsheet-based process.
  • I can handle changes in demand and supply faster and better.
  • I can run at lower levels of inventory.
  • I can make informed decisions about when to take a shutdown.
  • I can meet more demand on time and in full.
  • Etc.

While these qualitative improvements are all excellent, management (read the person or persons who approve the budget) are often looking for dollarized ROI calculations. And it is not always an easy question to answer. For example, what is the benefit of better data quality? Or being on time for deliveries to the customers?

Register now and join us for our next live webinar on Wednesday, September 20, 2023, at 11 a.m. as Sujit Singh discusses these topics and more.


{Related Resource: Planning vs Scheduling – Helpful Hints}