by Kelsey H | Aug 30, 2022 | Uncategorized
When a custom chemical manufacturer with a newly acquired site reached out to Advanced Process Combinatorics, Inc. years ago, they were facing a long list of challenges. Knowledge of production processes was limited to one person at the plant, and urgent requests from customer service forced operators to break into the production schedule constantly. The site’s lack of inventory planning meant these adjustments were devastating, and at the time of acquisition, the plant was unprofitable.
The new leadership identified these problems early on and decided they needed to find a solution quickly to avoid losing business or damaging client relationships. “Because of the challenges involved with coordinating our client’s complex manufacturing processes, they knew they were going to need a planning and scheduling tool that could handle their many constraints,” said Steve Harding, President of APCI. “VirtECS® was able to capture all the details of their process, and they were confident the answers our tool could provide would be accurate.” According to Harding, the company also liked that VirtECS® could account for forecasting and inventory levels to provide prioritized schedules in real time.
Although the company was excited about the benefits VirtECS® could offer, they did share some concerns that APCI needed to address. “Our client’s primary concern was that VirtECS® required a lot of data to produce an accurate schedule, and they weren’t sure they could keep up with it,” Harding explained. “We solved for that by importing existing data from their forecasting and ERP systems into VirtECS® and creating templates they could use to quickly set up new products. This made it much more manageable for them to keep track of their data.”
How Implementing VirtECS® Transformed the Business
When it came time to begin implementing VirtECS® at the plant, APCI worked with the company side-by-side to configure the tool to the site’s specifications. As the team built and implemented the tool, they also learned its features inside and out. In following this process, the plant began to reap the benefits of VirtECS® very early on.
One of the first steps to improving the site’s planning and scheduling capabilities was to build a unique virtual model. This model immediately unlocked capabilities the client never thought possible. “After we created a model of the plant within VirtECS®, our client’s planning and scheduling process became much more robust,” said Harding. “Rather than using a manual process that required people to exchange calls and track down data, it became a seamless process that multiple people could access.”
He continued, “Having this process model allowed the client to look at different potential plant configurations. This let them maximize the value of each new investment they made. They could try out the different investment options in the software and instantly measure the resulting impact.”
Another impactful feature of the tool was the interactive dashboard, which made it easy for plant employees to view schedule summaries and check details needed to make informed tradeoff decisions. “Once the user makes a tradeoff, the dashboard will automatically show them how the key metrics change. They can see the consequences of each decision and decide if it will make other things worse or better. That’s really useful,” said Harding. This feature helped the plant avoid the costly schedule breaks that had previously limited their production capacity.
Once the user determined the most efficient path forward, they were able to publish the finished, optimized schedule with just one click and easily organize all the information operators need to execute the new plan in one place. VirtECS® can also display projected inventory of products forward in time, allowing the company to verify that they are always above safety stock levels and within the tank’s capacity. However, as Harding noted, “The number one value of implementing VirtECS® for this site was how it transformed their entire business process.”
Delivering Value Through Coordination & Optimization
After implementing VirtECS® and creating an optimized schedule, the site was able to increase its profitability in two ways. “With VirtECS®, the site could create a schedule that had fewer costly washouts,” said Harding. “We were able to lower the manufacturing cost by 4 to 5%, just by reducing the number of washes. We also coordinated the stock of necessary precursor materials, which helped cut idle time when product could not be made due to insufficient stock.” The increased capacity played a huge role in helping this chemical plant become profitable, and as a result, the business has been able to meaningfully expand by acquiring acquire other new sites.
With improved capacity planning and an optimized schedule, the client was able to expand their use of VirtECS® to address other significant areas of operation. APCI first connected VirtECS® with the site’s ERP, forecasting, and batch execution systems, which gave those tools access to updated data from VirtECS® in real time. As a result, the systems became much more powerful, and the plant could respond to changes quicker because the cost associated with making planning or scheduling updates was so much lower.
Additionally, APCI layered finite capacity supply planning on top of the detailed virtual plant model. With this feature, the company could balance their capacity against market forecasts and make strategic tradeoff decisions that aligned with their growth goals. “Our capacity supply planning tool helped our client maximize profit by making as much product as possible to meet forecasts,” said Harding. “This allowed our client to bring their S&OP process under control. With VirtECS®’ capabilities, the plant went from working in an uncontrolled state to a predictable, data-based production plan.”
The Future of VirtECS® in the Chemical Manufacturing Industry
Harding has worked closely with this chemical manufacturing client for years, acting as a primary contact during this project as well as projects at subsequent sites. Over time, the data has shown that VirtECS will continue to provide value long after the initial improvements gained during implementation. “Many specialty chemical sites have similar characteristics and face the same challenges as the clients we’ve worked with. These plants could all transform the way they operate by using a tool like VirtECS®,” said Harding. “Our platform is designed to continuously improve processes based on real data and accurate process representation. This allows our clients to continue trying out different configurations without spending the time and money to test the options in the physical plant.”
In the future, Harding sees several unique planning and scheduling challenges that chemical manufacturers will need to address. “For example, we’re in a period now where the price of crude has fluctuated frequently. It can be difficult for companies who depend on crude to change how they’re operating quickly based on those fluctuations,” Harding noted. “Because VirtECS enables plants to respond to change faster, our tool is uniquely equipped to help companies through the current market challenges.”
by Kelsey H | Aug 9, 2022 | Industry News, Planning & Scheduling
The digital twin, or virtual model of a physical process, is one of the biggest buzzwords in the business world right now. It has also become one of the most desired investments. According to IBM, the market for digital twin software is worth more than $3 billion as of 2020 and will continue to skyrocket until at least 2026, when it’s projected to be worth $48 billion.
Digital twin software is incredibly valuable to manufacturing plants in particular because the tool provides an in-depth virtual look at production processes and gathers data on the plant’s performance. Using this data, business leaders can test potential operational scenarios and study every detail of their processes from several angles.
One of the digital twin’s most notable achievements is the ability to give organizations a comprehensive look into the past, present, and future. It can use past performance to predict future issues or achievements, while also alerting you to current conditions in the plant. This kind of thorough reporting can give businesses the insight they need to make strategic decisions, address weaknesses, and even boost revenue.
The Past
To build an accurate model, the foundation of any manufacturing plant’s digital twin must be past production data. This should include quantifiable information on how each of your plant’s systems and machines operate, such as their average output and run time. It’s important to give the digital twin as much access to historical data as possible. This will help the model learn how your facility has typically operated up to this point so it can begin analyzing points of improvement and overlooked issues. Over time, as new data is continually gathered from current operations, the digital twin will keep an ongoing log of past performance that it can reference at any time.
The Present
In addition to analyzing past data, digital twin software will also process new information in real time from each point in your supply chain. As we mentioned earlier, this data will build on a historical log that forms the foundation that the software will use to predict achievements or disruptions moving forward. However, the digital twin will also use incoming information to provide engineers and operators with updated, real-world circumstances, which employees can utilize to recognize delays or potential production problems much sooner than they could otherwise. Additionally, they can use the digital twin to tweak production in real time to optimize efficiency and total output.
The Future
Thanks to the data gathered about both past and present plant performance, digital twins can then create a complex algorithm that predicts how the plant will perform in the future under a wide variety of circumstances. For example, if there’s a projected shortage of one raw material, the digital twin can test how plant processes will respond to different strategies for addressing the shortage. With this information, business leaders can make informed decisions on how to minimize disruptions and maintain plant output. For further testing, engineers can also use the model to test how plant performance will change with added investments, such as more employees or new equipment. On the opposite side, a digital twin can help predict when equipment or products should be retired or replaced in favor of more effective or profitable alternatives.
VirtECS® is a powerful process modeling and digital twin tool that can store and analyze in-depth plant parameters, including yields, rates, setup times, and process vessels. VirtECS® can then rapidly use the past and present data collected to explore future scenarios or potential process options to determine how the plant can optimize output. If you’re interested in learning more about digital twin analysis and the capabilities of VirtECS® in particular, download our short guide here.
by Kelsey H | Jul 20, 2022 | Planning & Scheduling
For businesses that are opening their first US-based plants or struggling to handle frequent schedule changes, understanding the complex relationship between inventory management, planning, and scheduling can come with a steep learning curve.
These three essential functions are naturally intertwined in manufacturers’ supply chains. To make an accurate schedule, operators must know when materials will be arriving and how much inventory they have available at any given time. At the same time, inventory managers need to reference planned production output to build the appropriate orders of raw material.
Achieving this balance can be a major pain point for many businesses. In our experience, the plants who do it best prioritize cooperation and integration across departments to keep operations running smoothly.
Step 1: Capacity Analysis
As you might expect, the first step to an efficient production process is planning. Planners are responsible for setting overall plant goals and determining how much output should be produced. To set the most precise yet ambitious goals, planners should consider a capacity analysis of the facility to better understand the maximum output the plant is capable of producing in a set time period. Determining the true production capacity can help planners better predict how much product will be manufactured in the coming weeks and months, allowing inventory and scheduling managers to make their own arrangements accordingly.
Step 2: Inventory Management
With specific production goals communicated across the business, it’s the inventory managers’ turn to put their own plans in action. Typically, a plant’s ideal inventory level is large enough to fulfill production requirements, but small enough that it doesn’t become costly to store long-term. To fulfill those production goals on time, it’s important for operators to have access to an accurate, up-to-date inventory record.
Unfortunately, that’s not usually as simple as it sounds. According to a GS1 survey, inventory counts are only correct about 63% of the time. That means about one-third of the time, plants are building their production schedule based on inaccurate information, which can lead to unmet goals. Using an inventory management tool can significantly improve inventory accuracy, allowing managers to track all their materials and even receive forecasts or delay alerts. With these helpful features, the inventory team can quickly alert planners and schedulers of delivery changes or availability issues. As a result, the other departments will have more time to adjust and avoid delays or wasted materials.
Step 3: Scheduling & Optimization
Once supplied with a detailed inventory report, your plant can begin scheduling production and putting plans into action. Schedulers often utilize the inventory management tool to ensure their schedule accounts for delivery times of materials that will be arriving just in time for production to start. With inventory availability confirmed, schedulers’ next task is to create an optimized production calendar that will achieve the planning team’s goals in the least amount of time possible. Once that round of production is complete, the planning team can collect data from the schedule to inform and improve their future plans.
However, for complex processes with many constraints, manually creating an optimized, feasible schedule can be nearly impossible (and not to mention time-consuming). Over the past 29 years, we’ve developed our advanced planning and scheduling software, VirtECS®, to help manufacturers find the most efficient production schedules and maximize their output. VirtECS® offers both capacity analysis and scheduling tools, allowing plants to better understand their own capabilities and create a schedule that utilizes an increased capacity. Additionally, VirtECS® can integrate with inventory management tools to provide manufacturers with a more integrated supply chain solution. To learn more about how VirtECS® can impact your supply chain operations, send us a message and one of our experts will reach out to you with more information.
by Kelsey H | Jul 12, 2022 | Supply Chain
Over the past year, a growing number of large US companies have kicked off efforts to onshore their manufacturing plants. Most have one common goal in mind: to regain control of their supply chain. Once established, a domestic supply chain is typically easier for businesses to manage, allowing them to reduce or eliminate most delays.
However, onshoring manufacturing facilities isn’t without its own challenges. To reach the worthwhile payoff, business leaders must be strategic with their operational plans and prioritize optimization in order to avoid a new set of problems. Below, we’ll discuss some of the challenges looming over new US manufacturing plants and suggestions to work around these issues.
A Shrinking Workforce
Many US industries have recently experienced labor shortages. Unfortunately, the manufacturing industry is among the most affected, with more job openings recorded last year than ever before, according to Deloitte. It’s likely the labor shortage will continue in the future, as the National Association of Manufacturers forecasts that 2.1 million manufacturing jobs will be unfilled by 2030.
For organizations opening new plants in the US in the coming years, this could present a serious problem without proper planning. When selecting sites for new domestic plants, manufacturers should research the demographics and manufacturing history of the area to ensure there will be enough workers available to staff the facility. However, it will also be important to create a mitigation plan to address potential staffing problems. For example, we recommend manufacturers design their plants with the capability to easily scale up or down depending on the number of employees they have available. With this feature incorporated into the plant’s capacity plans, leaders can make adjustments quickly with minimal waste or lost time.
The Search for New Vendors
When companies transition to vertically integrated domestic plants, they also need to secure their own suppliers for the facilities. For businesses that previously used contract manufacturers, this may be a new process that they’ve never had to engage in before. Because manufacturing is such a vendor-dependent industry, new plants need to establish a network of suppliers for all of their raw materials and sub-assemblies before they can get started on production.
To find reputable vendors, some manufacturers rely on online supplier directories, which provide large, up to date lists of potential partners in the US and beyond. Of course, another safe route is to consult colleagues or other industry professionals for referrals. Contacts who have already built a US-based supply chain can offer valuable insight into important considerations or lessons learned from their experience. As you select your primary vendors, be sure to keep an updated list of backup options as well. If we’ve learned anything in the last two years, it’s that manufacturers should always be prepared for every possible supply chain disruption.
Rising Infrastructure Costs
Every manufacturer knows there are steep upfront costs that come with establishing a new plant. If the land doesn’t yet have infrastructure like water and gas in place, it can be expensive and time-consuming to add those facilities. To make matters more complicated, certain areas of the country can also have issues securing some critical resources, such as the ongoing drought causing water shortages in the West.
For companies hoping to regain control of their supply chain as soon as possible, infrastructure delays can be a big problem. Building costs are already steep, and plants need to start production as soon as possible to start recouping costs.
To assuage some of these expenses and delays, we recommend new plants utilize a capacity analysis tool before construction even begins. This software can help manufacturers avoid bottlenecks and maximize production capacity from the beginning. VirtECS® offers nearly 30 years of experience in capacity analysis for some of the most complex manufacturing processes in the world. As one client in the pharmaceutical industry told us, “I have evaluated more than a dozen process modeling software solutions and VirtECS® is hands-down the most powerful for end-to-end capacity analysis.” For a free demo of our tool, schedule a short call with one of our experts here.
by Kelsey H | Jun 21, 2022 | Industry News
The employee landscape of manufacturing businesses is changing. During the height of the pandemic, uncertainty drove many employees to accelerate their plans to leave the workforce. In the third quarter of 2020, 3.2 million more Baby Boomers retired than in the same period of 2019. Many of these employees were in management positions, leaving an open opportunity for younger Gen Xers and Millennials to take their place – if manufacturers can attract them.
Though the industry has struggled to secure young workers in recent years, this new, innovative, and tech-savvy generation of leaders has the potential to positively impact manufacturing organizations. They may be more likely to take charge of technological improvements and provide a fresh perspective to previously unseen issues. Keep reading to learn more about manufacturers’ opportunity to tap into the next generation of leaders.
Improved Digital Communication
Gen Xers and Millennials have spent their entire professional lives using digital media. That’s good news, because 38% of manufacturers have started accelerating their digitalization plans as a result of the pandemic, according to McKinsey. Young leaders who are well-versed in technology will be an important resource as more companies move to convert manual processes to more automated models. With their wealth of experience, these employees can advocate for and initiate technology updates that will improve your manufacturing processes.
To tap into their expertise, task your new potential leaders to research and recommend tools that will better connect people across departments, plants, or hybrid work models. They know that modern communication tools for large organizations should integrate with other internal processes and be accessible from existing employee devices. Your budding new leaders can help ensure whichever new system you choose is easy to learn and encourages collaboration across the company.
Responsible Use of Data
However, increased digitization can also bring an elevated risk for cybersecurity threats. New high-tech systems and machines introduce more opportunities for hackers and irresponsible data use. According to IBM, 47% of attacks on manufacturing in 2021 were due to vulnerabilities that had not yet been addressed. In 2017, Renault-Nissan was infamously attacked with ransomware, resulting in production halts at five plants and up to $4 billion in estimated losses. Without knowledgeable leaders and thorough plans in place to address all potential problem areas, your organization may be left at risk.
Of course, your IT and cybersecurity team should be the first people you look to for guidance on cybersecurity, but young manufacturing leaders can also help lead the charge. These leaders can guide their own teams toward more responsible use of data and analytics on a daily basis. Additionally, they can take on the challenge of training the wider workforce on best technology practices and defensive tactics to help prevent an attack.
Implement More Advanced Tools
Many manufacturers have used tools like Excel for their planning and scheduling needs for years, simply because that’s the way it’s always been done. Under the right circumstances, Excel can still be an incredibly useful tool. However, with so much advanced technology available now, Excel is rarely the most efficient planning and scheduling option for complex manufacturers.
Ushering in a new generation of innovative leaders provides an opportunity to implement new, effective tools that provide much-needed improvements to plant operations. Thanks to their decades of familiarity with digital tools, your new leaders can help identify which alternatives will provide the most benefit. Advanced planning software can reduce the need for time-consuming and error-prone manual effort, putting your organization on the path toward optimization and increased throughput.
VirtECS® is an example of a sophisticated planning, scheduling and capacity analysis tool. Our software has been used by dozens of global manufacturers in the last 30 years to manage their supply chain and make better planning decisions. For more information on the benefits VirtECS® brings to manufacturers and the implementation process, please download our overview guide.
