Global EPP Case Study
Demand Forecasting, Capacity Planning, Performance Management

Global EPP are manufacturers of high performance engineering polymers in rod, tube and plate profiles, and supply distributors across the world from their sites in the UK, Mexico, the Philippines and Russia. Already long-established as a cast polymer market leader, they expanded into extruded polymers with a significant investment during the mid-2000s. This investment would transform their supply chain as they changed from being a make-to-order to a make-to-stock business, and they selected Entalysis to realise its full potential.

The market for engineering polymers is similar to commodities, whereby, once the product quality prerequisite is met, differentiation within the marketplace is by service and price. Global EPP already enjoyed a long-earnt reputation for its cast polymer quality, from which the new extruded range would benefit while it quickly built its own quality reputation; however, the service and price differentiators require a low-cost, efficient and effective supply chain, the extrusion side of which was new and used a completely different manufacturing process.

Demand Forecasting and Management

The transformation from make-to-order to make-to-stock business requires a demand forecast, which is managed by Entalysis Extensions. Global EPP's product range of plate, rod and tube covers a range of polymers, colours, thicknesses, outside and inside diameters, and is available in any length or width; such choice spreads demand over approximately 100,000 part numbers, but these can be yielded from a range of a few hundred parent products, each having a preferred length and width for a given polymer and plate thickness/ rod outside diameter. Extensions programmatically identifies the parent product of each child using the product dimension data within the ERP system and maps the aggregated child product demand back onto the relevant parent for demand forecasting. These parent products are stocked, with any child product demand yielded from the parent as necessary.

Because extruded and cast polymers have similar applications, Extensions initially used the cast products' demand weightings to build the extruded products' forecast. Demand splits as a percentage between rod outside diameter and plate thickness are combined with market research on polymer type, imperial vs. metric dimensions, and colour to give a detailed percentage forecast by product weight, which Extensions then maps programmatically onto the correct parent part. The demand forecast can then be aligned to plant capacity as it increases, ensuring a balanced stock profile for the current capacity and rate of sales.

Finite Capacity Planning and Optimised Work Order Release

Global EPP already had a significant stock holding for its capacity, which was seldom for the preferred parent part, but could be used to satisfy much child product demand, and ultimately needed to be sold. The next step was to ensure the most-required products are being manufactured and that existing customer orders are yielded from stock where suitable. Extensions is configured to run the MPS (master production schedule) and MRP (material requirements planning) routines daily, defining a yield-from-stock manufacturing route where possible and balancing new MRP requirements against current preferred and useful non-preferred stock holding.

Extensions analyses the current constraints according to each machine's schedule, the least disruptive product sequence which can follow, the tooling constraints, and the machine setter resource availability based on planned finish times. The new MRP requirements are then weighted according to the total urgency of all customer child orders each parent satisfies, balanced against the current constraints and loaded back into the ERP system and released as work orders. Machines are only loaded to the end of the forthcoming week to maintain flexibility. According to the defined manufacturing route, Extensions calculates the planned finish dates for each stage, which are then used with the product tracking system for manufacturing plan measurement.

Vendor-Managed Inventory

A key part of Global EPP's marketing mix is its vendor-managed inventory service. Each distributor's demand is recorded via a hand-held terminal, which scans the product sales and sends the data back to the ERP system. Extensions analyses each distributor's demand and, in conjunction with the polymer, profile and size splits of the main forecast, calculates optimal minimum and maximum stock levels, which are reviewed and agreed with the distributor. Extensions then calculates the distributor replenishments, based on the current, minimum and maximum stock levels.

Other Solutions

Extensions provides many analyses for Global EPP, including

• Accounts - outstanding debtors, weighted according to invoice age, size and payment history
• Purchasing/Accounts - supplier spend analysis for negotiation of discounts and payment terms
• Sales - report regularly-purchased products in stock by customer for additional sales when taking orders
• Sales - substitute products report, to satisfy demand when the desired product is unavailable

Please contact us if you would like to learn more about this project.