Why Do You Need APS Software to Explode Bills of Material?
You have an ERP System that performs bill of material explosions. Your interface can easily pass exploded orders to your Advanced Planning and Scheduling system for production scheduling. Why then might you want to consider exploding bills of material in your Advanced Planning and Scheduling Software (APS)?
If you make strictly to stock, or if you have very flats bills, you probably don’t need APS’s bill of material explosion capability. However, if your bills are more than two levels deep, Advanced Planning and Scheduling’s bill of material explosion and CTP (Capable-to-Promise) features can dramatically improve the accuracy of delivery dates that you promise to your customers, and the speed at which you provide those dates.
Given its architecture and the fact that it considers all of your items, the explosion of bills in ERP is typically a long process. In some ERP environments, the process is scheduled to occur overnight. To speed up the process of quoting delivery to customers, ERP systems have come up with an approached called ATP (Available-to-Promise).
ATP simply allocates available inventory against the top level (or Master Production Schedule) item being promised. If inventory isn’t on-hand, ATP assumes that inventory will be available based on some aggregate lead time. ATP doesn’t consider the availability of capacity, and it doesn’t typically consider the availability of lower level components.
Since it considers only rough estimates of lead time, promise dates from ATP can be wildly inaccurate. These bad promise dates can hurt customer relationships and / or throw your plant into turmoil as you strive to meet unrealistic dates. Companies often carry excessive inventory to buffer against inaccurate ATP estimates, driving up costs.
Contrast ATP with CTP (Capable-to-Promise), a set of features in most good APS systems. When generating detailed, accurate promise dates, CTP considers the finite capacity of your limiting resources such as machines, tooling, and labor skills. CTP also considers limited on-hand and on-order material. The availability of on-order material is based on the scheduled receipt dates of both purchase orders and finitely scheduled component manufacturing orders. CTP will take orders from ERP, but then explode only material related to the item being promised, so it generates promises very quickly.
A good CTP system, also:
- Highlights available dates that will not meet customer requests.
- Identifies bottleneck constraints (e.g. missing or delayed component items) that are causing late fulfillment.
- Shows exactly how existing inventory is allocated to higher bill levels and to customer requirements.
- Supports what-if rescheduling with dynamic pegging which re-allocates inventory and projected receipts to show the impact of changing customer priorities or requirements.
- Allows unlimited scenario generation and the ability to compare what-if scenarios on different metrics (e.g. on time delivery, order days early / days late).
Exploding bills of material in an APS (advanced planning and scheduling) system with CTP (capable-to-promise) features can help you more accurately promise inventory to customers, resulting in better customer service, less operational turmoil, lower inventory, and increased profitability.