Artificial Intelligence in your planning process

Every week there are significant news from the world of AI and one can ask when an LLM (i.e. an engine like the one behind ChatGPT) will be able to replace the planner in the company. As long as the planning process is conditioned by information outside the system, known only to the planner (content of phone calls, post-its, etc.) it will be difficult for this to happen completely but we can still clarify in which ways today generative artificial intelligence (GenAI) can intervene in the planning and scheduling process and with what benefits.

 

Forecasting

So far, forecasting methods based on LLMs have not obtained better performances than more traditional methods according to scientific literature (https://arxiv.org/abs/2406.16964 and https://arxiv.org/pdf/2412.19286).

 

Tool they use in the LLM

Whatever the tool, i.e. the software, that you are using to plan production and purchasing (ERP, spreadsheet, APS), you can get help from an LLM in some of your activities, both to reduce operating times and errors. The type of integration that can be achieved between the tools makes the difference and conditions the user experience. Even more important in this integration is deciding whether you want to use a local LLM (ideal for keeping data in the company) or an external one like those of OpenAI or Anthropic.
In Cowry, the APS of Paneido, you can ask an LLM to help you prepare a script to integrate data with other systems or to automate some operations. You can also ask the LLM from Cowry to help you clarify the plan without changing the environment, i.e. without copying and pasting the context data of the question into the LLM chat, because these are passed to him automatically through selections in Cowry, unlike what can be done using an ERP, a spreadsheet or other APS. In Cowry, the connection with an LLM can be implemented as a plugin written in Python and adaptable to the specific reality. The LLM to be used can also be chosen within the plugin.

 

LLMs that use tools

This approach is certainly the most stimulating for the future scenarios that it can open up and has two levels of implementation with different ambitions

LLM as a user interface of the tool

It is possible to use the LLMs as an alternative user interface to the tools, which thus become usable even by those who have not been trained on how to use the tools and how to read their screens. For example, we can ask an LLM for a delivery date for a possible new customer order. The LLM does not have bills of materials, cycles and our current production plan inside it to respond autonomously, but it can send the request to our APS, have the response processed and then present it to us verbally without us needing to know how to find our way through the APS screens. With different systems this can be easily achieved, as long as they allow their functions to be invoked from outside the application and as long as they provide realistic answers and in times compatible with the user’s patience in waiting for an answer. The LLM can also be used for non-preconfigured requests such as dating requests (any question regarding the plan) if the planning software is able to execute code (for example SQL or Python) dynamically generated by the LLM. If the planning tool is not able to execute dynamically generated code then the only possible approach is to define a set of questions that the tool can answer, implement the functions that provide the answers to those questions and accept that the tool, via LLM, cannot answer different questions

LLM becomes an agent

When we talk about agents it means enabling an LLM to act, that is to use external tools (other software in general) both to retrieve information, that is as a user interface, but also to perform activities. For example, in your planning process the LLM could have the purchasing and production plan updated by the external tool (APS for example) when certain events occur (or with a defined periodicity) and transmit the new orders to the ERP, suppliers and the production department if in a position to interoperate with ERP, e-mail and MES respectively. Or directly request the delivery of an order that is now overdue from the supplier. In this context the advantage of having the Cowry APS instead of other software is decisive because it can execute Python code dynamically generated by the LLM and practically every LLM already knows how to create Python code. With APS that only use SQL or proprietary languages ​​to perform operations in the application, the configuration activity is much more onerous both for the APS manufacturer and for the companies that use them

 

Sooner or later, every company will undertake a project to adopt an LLM internally to support different processes. For example, using an LLM to support its customers means providing it with the knowledge to answer questions about products, return procedures or payments. Enabling this LLM to also answer questions about delivery dates of products and spare parts is an added value if you have tools, such as the advanced planning system Cowry, that can be easily integrated with LLMs and existing systems in the company.

20 January 2025 Uncategorized No comments yet

2 reasons that make ERP unusable for production plans

Generally, the company ERP provides an MRP module for production planning that has been developed and sold by those who do not prepare production plans on a daily basis and purchased by those who never use it: the company’s IT department. There are mainly two reasons that induce planners to overcome the limits of ERP and to seek alternative or at least complementary solutions to allow an adequate production flow to respect deliveries to customers: the difficulty in recognizing the feasibility of orders and the dating of the same, and consequently of customer orders, at finite capacity.

A plan is a plan if it is feasible, otherwise it is a wish list

In manufacturing companies of a certain complexity, the planning system can propose thousands of new production orders over the time horizon. Some of these must be released in the department quickly to avoid delivery delays to customers and it is essential that the department is certain that these are feasible orders, that is, have components available. Otherwise we are not dealing with a production plan but with a wish list submitted to production, which in turn should skim off the feasible orders and monitor the feasibility of the other ones along time. Understanding which orders are feasible and which components should be solicited with the MRP module of the ERP is a difficult task: either we analyze the proposals one by one with the availability of their components or we try to re-elaborate the MRP output on a spreadsheet coarse method. Looking for the solution is even more frustrating if you think that with each new planning session you have to deal with new customer orders and production proposals that can call into question what was verified and decided in the previous session.

Resources have limited production capacity

The other reason that makes a production plan proposed by ERP unusable as it is is that it considers only some production resources and considers them to have infinite capacity. That is, it does not take into account the fact that:

  • several orders cannot be carried out simultaneously on a certain machine: that is, the resource actually works at finite capacity
  • an order is feasible at a certain date if the orders of its components are also likely to be feasible in time

It can be done

The solution to both limits of ERPs is to adopt adequate tools, capable of:

  • simultaneously elaborate all the constraints relevant to the production plan (machines, personnel and equipment with finite capacity, sequencing rules),
  • allow to preserve what has already been decided by the planner in previous sessions,
  • propose an output for immediate consultation regarding feasible orders and full of significant details (distinction between feasible, not feasible, feasible orders for partial quantities or which only require a transfer of components between warehouses to be feasible, etc.)

APS are generally the most suitable tools to overcome the limits of ERPs in the context of production planning but even among them the characteristics are different and the flexibility in managing the particularities of the company is not always guaranteed. Also for this reason Cowry is often called upon to replace previous APS in the company.

8 January 2021 aps, erp, planning No comments yet

The value of simulation in crisis scenarios

Supply chains of companies are getting complex and extended: this increases risks and their management has become essential. If something unexpected happens in the market or to some supplier that interrupts normal flow of materials and resources, it is important to take prompt decisions, based on reliable scenarios. In these cases being able to make simulations is very useful: it can reduce immediate economic damages to the company and, indirectly, keeping customers trust. In many area making simulations is an established practice. In supply chain management the situation is a bit different: planning modules of ERP systems don’t allow simulations because they are anchored to current purchase and productiona plans. And also if they permit simulations, these are limited and simplified. The great usage of spreadsheets witnesses this situation. Also many APS systems lack in supporting simulations, especially if they are based on transactional technologies of ERP or MES, not well suited for massive computations. Unexpected situations for which would be usefule to make simulations can have different origins:

  • a supplier is having problems and the impact of its deliveries to our customers must be evaluated. How long will last our stocks of its components? for how long can we feed our production before finding other suppliers of the same materials?
  • our competitors in other countries have been damaged by catastrophic events: what will be the impact on our demand and how to fullfill it?
  • new norms are threating the demand for certain products (e.g.: plastic bags or some kind of food): which is the obsolescence risk of our stocks? what is the impact on our demand and production plants? how much time is needed to convert materials flows?
  • British customers foresee Brexit and want to increase stocks of our products: in the short term we have to manage an increase on plant saturation but future demand must not be overrated

Simulations are useful also without crisis or external exceptional events but for evaluating decisions:

  • phase-in/out of products and components
  • evaluation of new manufacturing arrangements or changes in the supply chain
  • comparison of the impact of different management techniques (kanban, rythm-wheel, etc)

In any case, to have effective answers for new scenarios is important to have simulation tools that are able to:

  • model adequately constraints and flows
  • represent the future effectively
  • elaborate scenarios quickly
  • mix real situations and hypothetical parameters, also exploiting unstructured data sources

It does not make sense to wait for crisis before adopting suitable tools to manage it.

24 August 2020 operations-management No comments yet

Lean integration – part 2

The problem of integration is related not only to in house applications and processes but also to the ones of the company and its supply chain. In the previous post
we have described a lean and flexible solution for the internal integration and in this post we suggest one for integrating with suppliers. On the suppliers side
is increasing the number of relationships where, also without a formal blanket order, suppliers produce more than requested for a confirmed order, being aware
that the surplus quantity will be consumed by future orders. For the customer, the purchase lead time for surplus quantities of previous orders can be very different
from the lead time for new productions and conditions production plans and delivery dates to customers very much. An agile solution in this situations is modeling in
the APS the stock in the warehouse of the supplier and using the multi-warehouse MRP to manage distinct lead times for stock transfer and new production runs. The data
source to be used by the APS for the stock at the supplier site can be a spreadsheet, periodically updated by the supplier with the quantities for every item supplied.
This spreadsheet can be sent by e-mail by the supplier to the customer and put by the planner at the customer site in a folder of the internal network, where is
read directly by the APS. Or we can use a folder, shared between customer and supplier, containing the spreadsheet and automatically synced with Dropbox.

7 March 2012 Uncategorized No comments yet
Paneido
Paneido has twenty years of experience with planning and scheduling systems. Our philosophy is making easy and fast the activities of every day and feasible the solutions to less recurring problems: phase in/out of products, rearrangements of production capacity, optimizations, etc.

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