Monday, December 5, 2016

Product Wheel Scheduling with SAP (Process Industry)

Product Wheel scheduling is a concept which allows for standardized, noise-reduced production of fast and slow moving products made to stock and made to order. It came about first as a tool to introduce ‘lean’ principle – which were thought out primarily in the automotive industry – to process manufacturers. Product Wheels find now widespread acceptance in the chemical, pharmaceutical and food processing industry as it allows for the scheduling of large batches and considers the difficulties with switching over from one product batch to another.
There are some specifics to be considered when using the product wheel in the process industries and, with this writing, I’d like to provide you with some ideas on how a product wheel could be configured into SAP.

What is Product Wheel Scheduling?

If your company is a process manufacturer, you most likely mix, blend, cure or otherwise process your products on a production line. One of the characteristics of processed products is that you can't disassemble them. An automobile you can usually 'unscrew' and put the components back in inventory (even though that is not true 100%, it is an approximation to generalize the difference between process and discrete manufacturing).
Also, in process manufacturing you may have by- and co-products; unfinished yield that may be re-introduced into the process. And you often can't predict what exactly comes out of the process. So you have to work with ranges (of specifications) and chemical formulas. All of that is provided with recipes and process orders in PP-PI. As "lean manufacturing" came primarily from the automotive industry, process manufacturers always asked the question if they can reduce waste as well. Why not? You cannot introduce 'one piece flow' but that's not the only lean principle. Why not heijunka level a production program or make every product every interval (EPEI)?
Peter L. King has written a book, “Lean for the Process Industries. Dealing with Complexity”, which beautifully translates all the 'automotive lean principles' to process manufacturing. One of the most interesting ideas is the 'product wheel' is that it represents heijunka for processed products. Products wheels allow you to schedule, capacity level and sequence your production program all at the same time. It is a mixed model scheduling concept which allows you to automatically fill a processing line to it's capacity, in a setup-optimized sequence, ensuring that the smallest possible lot size is processed as many times as possible within a planning cycle.
Within this concept the circle represents the lengths of the planning cycle, each spoke is a batch size (the lengths in time to produce it) of a specific product and the gap in between represents the time it takes to setup, clean or prep the line for the next product. Note that there are spokes for MTO and spokes for MTS. The MTS spokes are planned based on a forecast, whereas the MTO spokes are reserved time / capacity which can be filled by customer requests which are made to order.

A planner will first identify how much time is available during a planning cycle to get around the wheel. If that time span is one week, we simply sequence the total forecasted quantity for all products on that line and for the week around the wheel. If, with that, we get 2/3rds around the wheel, then there is 1/3 available for MTO capacity and setup time. Peter L. King calls that open time PIT – Process Improvement Time.
The Product Wheel is a production scheduling method with its design based on average demand but it is executed to actual demand. The phases to use a Product Wheels are:
1.       Identify the location (line or line segment) on your production floor where the product wheel is to be used for scheduling
2.       Design a standard sequence using all the products which may be produced on the line
3.       Determine the lengths and periodicity of the cycle of the wheel
4.       Schedule or load the product wheel for the next cycle so that it meets planned demand
5.       Execute the schedule for the cycle according to the plan and fulfill incoming orders from inventory
The last point is of special importance as this provides adherence to the core philosophy of product wheel scheduling: produce to inventory according to a set plan in a frozen zone and fulfill actual demand from inventory which was replenished from the previous production cycle
Product Wheel scheduling brings with it transparency and insights that help to continuously optimize the way we produce. A uniform, level production schedule will maximize equipment and labor utilization, and smooth out requirements for raw materials. One of lean manufacturing’s major change in thinking is that we must take variable demand and find a way to distribute it evenly. Product Wheel scheduling does exactly that. It goes away from scheduling customer demand on an instantaneous basis, but rather integrates the variable demand into some longer time frame

 Implementing the Product Wheel with SAP

First  perform a segmentation to classify our products (the ones we manufacture) into four categories:
u  MTS high volume – every cycle - these are your front running items. You are are maintaining an inventory level which provides high availability (high service levels) to your customers
u  MTS low volume - every other cycle - these products are demanded less frequently and find their ray onto the product wheel only every other cycle or even on c, every third or fourth cycle
u  Only when inventory requirement is breached - here we are dealing with products which are demanded only from time to time. However, we cannot afford to wait with production until we have the customer order in place because our customers would no of accept to wait out the replenishment time but rather buyfrom some place else. This is why, for these products, we will keep some inventory and trigger more production based an A breach of a reorder point.
u  MTO - for products with infrequent demand which happen to be valuable, perishable and/or relatively short to replenish, we trigger production only when a customer order is present.
While performing the segmentation you’ll have to consider some determining factors that may be described as follows:
u  Cost of inventory – requires short cycles
u  Cost of change over – requires long cycles
u  Shelf life – requires short cycles
u  Short term product demand variability
u  Minimum practical lot size
Then, before you can use the product wheel for production scheduling you must define some standards. If you hold an annual strategy meeting, this is the best time to set the wheel’s cycle duration, performance boundaries and identify the places where the wheel is used for scheduling.
Once these decisions were made, one can implement the standard steps and sequence by which a planner may design and subsequently run or schedule the product wheel. Some of the steps to implement product wheel scheduling are given below.

1.       Value Stream Map – create an SAP value stream map with all master data, decoupling points and pacemaker / wheel locations
2.       Where on the floor? – decide the locations where you want to run product wheel scheduling
3.       Demand volume and segmentation – perform the segmentation as described above
4.       Sequencing – establish a changeover matrix
5.    Wheel time (cycle) – fastest, most economical, shelf life, demand variability, min lot size
6.    Wheel frequency for each product
7.    Distribute products across cycles - balance cycle to cycle
8.    Visualize wheel cycles – diagrams
9.    Calculate inventory requirements

To define the standard sequence (as suggested under point 9) proceed as follows:
A standard sequence provides a template for the actual sequence. In it we identify all products which could ever run on the line and provide a mechanism by which every actual sequence (with only those products on the schedule which are actually demanded in that cycle) will go by.
To set the standard sequence in SAP we are using the setup matrix with its fields SETUP GROUP CATEGORY and SETUP GROUP KEY. Configuring the settings to the fields in SAP’s customizing will enable us to define each product’s place in the sequence. This is done in the product’s standard routing or recipe. Go to the sequence of operations and from there drill into the details of the operation with your production line. In there you will find the fields  SETUP GROUP CATEGORY and SETUP GROUP KEY. Pick from the list of options those values which place the product you are maintaining into the right place of the sequence as shown below

For the routing displayed above we pick group “C” which places the product on top of the sequence. Next we pick the setup group key.

Value 2 is being picked here which places the product in second place within the third group “C” (which was picked as setup group category) of the sequence
If you keep on assigning setup group category (the group) and setup group key (the sequence within the group) to the routings of the materials you manufacture, you are, in fact, building a standard sequence by which these products fall into place should they be demanded and a planned order is present.
Next I’ll demonstrate how orders can be scheduled using this sequence by way of the Dispatch Sequence in SAP’s scheduling transaction CM25.

Product Wheel Scheduling with CM25

After all settings (changeover matrix, sequence schedule, routing data, material master policy) have been setup, we can now schedule the infinite supply plan, generated by the MRP Run, into a finite supply plan using transaction CM25.
As you can see below, all generated, unscheduled planned orders are visible in the order pool in the bottom window.

What we need to do is to pick the frozen zone period and schedule relevant (within the time period) orders from the pool onto the processing line. This must be done within the available capacity and in the correct sequence.
To determine the correct sequence we must use the dispatch key that uses the changeover matrix we configured in the system. This is done by way of the strategy profile.

You can now select all the relevant planned orders from the pool and push the dispatch button. This will distribute the orders in a given sequence, within the available capacity on the processing line.
The result can be seen here

Product wheel scheduling can run very automated in SAP if you put in some work upfront to set up all the relevant master data.