Food & Beverage

Food and Beverage is designed for companies that primarily produce MTS. For Food and Beverage, M3 PWB is a production planning tool for food and beverage companies, but not for fresh food planning or harvest push production. Planning is supported in multi-facility and single-facility production environments. Critical materials are handled across all facilities. For example, any supply can cover any demand. On the medium or long horizon, demands can originate from many warehouses or facilities. On this horizon, supplies from the production can be divided among warehouses according to where the actual demands will be. Coverage periods and other item-related information are always gathered across all warehouses that are planned in M3 PWB.

M3 PWB is a production planning tool for decision making on the medium and long horizon. The primary purpose of planning is to make decisions. Creating a plan does not in itself create any benefits for a company, unless the plan is used to make decisions. Data must be aggregated and structured in a flexible way into the information that is required to make these decisions. These decisions are the most important in production planning:

  • Move production in time, for example, preproduction or postpone production.
  • Change capacity
  • Split orders, for example, large order might have long lead-time and splitting orders is one method to reduce lead-time.
  • Move orders
    • Move to other work centers inside same facility
    • Move to another facility
    • Move to or from subcontractors

M3 PWB is part of M3 Production Planning solution, which covers the extended ERP system. The Production Planning solution has four key elements:

  • Supply Chain Orders, a generation of a chain of linked orders to meet demand
  • Macro Orders. An aggregation of orders for planning purposes.
  • Planning Workbench. A desktop decision support application for planners.
  • Action Log. A closed loop system for managing and implementing decisions.

This diagram shows the M3 Product Planning solution.

M3 Product Planning Solution

Supply Chain Orders

Supply Chain Orders (SCO) are linked order chains through the supply chain. This element was designed to improve the way an organization plans and manages order chains by pegging orders. Supply Chain Orders can apply from a complex multi-facility manufacturing supply chain to a single site label-to-order operation.Supply Chain Orders. A generation of a chain of linked orders to meet demand.

These element are improved with Supply Chain Orders:

  • Global visibility is improved. At any point in the supply chain, the planner can determine which end-item order or supply are linked to the supply chain
  • Automation is improved by handling upstream and downstream changes to quantities and dates, including tolerance handling based on user-defined rules.
  • Decisions that affect the full supply chain are enabled.

Macro Orders

Macro Orders are an aggregation of orders on M3 BE for planning purposes. The aggregation is based on user-defined criteria.

Macro Orders dramatically reduce the number of orders for planning and significantly improve simulation performance during planning, and the time for loading data into a memory-resident simulation environment.

Macro Orders cover the full supply chain and transform a supply chain with multiple-level BOMs into one Macro Order that only contains the critical operations and material.

Planning Workbench

M3 PWB contains two Workbenches, the Capacity Workbench and the Material Workbench, from where the planner can make all the decisions. The Workbenches enable the user to select, aggregate, and structure data to give all the necessary information to make these decisions. The planner can also simulate the consequences of the decisions.

The Capacity Workbench is used to display capacity and loading across work centers, facilities, and other relevant dimensions. Make-To-Order (MTO) companies primarily use the Capacity Workbench to make all their decisions.

Supply Chain Orders. A generation of a chain of linked orders to meetThe Material Workbench is used to display the stock levels, the coverage periods and other material information. Coverage periods are important for Make-To-Stock companies and use both workbenches.

Action Log

Decisions that are made in M3 PWB are implemented in M3 BE through the Action Log. Decisions are stored in the Action Log in the order they are made in M3 PWB. Then, from the Action Log, decisions are automatically or manually implemented in M3 BE.

The Action Log is used for managing and implementing the decisions that are made in Planning Workbench. Unlike spreadsheets and many other planning applications, the planning decisions are logged and a status is maintained against them.

  • Line Supervisors can see the decisions on which they must take action, such as increasing the capacity on a sewing line by 50% for a two-week period.
  • The loop between planning and execution is closed so that the status of implementing decisions is taken into consideration in the next planning cycle.

Production Planning solution

The Production Planning solution is designed as a planning tool for decision taking. In M3 BE, orders are structured (SCO) and aggregated as Macro Orders. The planner has the correct information to make all the planning decisions.

In M3 PWB, the planner can then select, structure, and aggregate these data to give all the necessary information to make decisions. The planner can then simulate the consequences of these decisions. When all decisions are made, then the decisions are stored in the Action Log and implemented in M3 BE.

Food & Beverage Planning concept

An important element in implementing M3 BE and M3 PWB is to identify a planning concept, which defines how the company is run and the different planning levels and how the different planning levels interact.

This diagram shows an example of a planning concept for a food and beverage company:

Food & Beverage Planning levels

The company in the scenario has three facilities and M3 PWB is used for planning in each facility. Scheduling is performed using M3 SWB for each facility. Long-term planning involves several tools.

All three planning horizons have benefits, but from a cost and benefit view point, we recommend that you wait with scheduling until the medium horizon and the long horizon are implemented. The reason is that scheduling can be complex in a food and beverage company, but also that a stable plan is required for medium and long horizon to ensure good data quality for scheduling.

You can start with the medium horizon planning, but the quality of forecast must be good. As this condition is not always met, in this example, we assume that we start with planning on the long horizon.

On the long horizon, we use three planning tools, that is, DMP, SBO, and PWB. M3 Demand Planner (DMP) helps a company making good forecast by accurately managing and manipulating planning demand. M3 DMP supports a collaborative stepwise workflow using client-server architecture for the decentralized collection of customer demand information. If seasonality must be taken in account, then M3 Stock Build Optimizer (SBO) is an excellent tool in helping deciding how and when the stock build up should happen.

When the forecast is created, including stock build up if required, then M3 PWB can be used on the long horizon to plan the full company across all the facilities at the work center type 1 level or included at the work center level. In this scenario, the planning horizon can be up to 6-18 months into the future. Global planning has many purposes. Inside the same horizon that factory planning is done, global planning primarily validates that the factories plans are correct and that the different factory plans are aligned. For example, this validation allows avoiding overload, overtime, and subcontracting in one facility and free capacity in another facility. On the longer horizon, global planning levels production between facilities. Because decisions such as increasing capacity, build new facilities, and use subcontracting, are based on the information that is available in M3 PWB, global planning also interacts with top management.

On the medium horizon, M3 PWB is used at the facility level to perform planning at the work center type 1 level or included at the work center level. In this scenario, the planning horizon is 2-12 weeks horizon. The primary purpose of the factory plan is to avoid stock outs, to balance coverage days between items and to control capacity and manpower.

On the short horizon, M3 SWB is used to perform detail scheduling at the work center type 6 level. In the scenario, the scheduling horizon is 1-3 weeks.