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. 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, but 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 required a demand forecast, which is managed by Entalysis Extensions. Global EPP has hundreds of thousands of active part numbers, with near-infinite length and width variations, 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. The parent product of each 'child' product was identified programmatically using the product dimension data within their ERP system, and the amalgamated demand of the parent products calculated, excluding any exceptional demand. These parent products would be 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 to build both the cast and extruded products' forecast. Demand splits as a percentage between rod outside diameter and plate thickness were combined with market research on polymer type, imperial vs. metric dimensions, and colour to give a detailed percentage forecast which Extensions then mapped programmatically onto the correct parent part. The demand forecast could then be aligned to plant capacity as it increased, 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 stockholding 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 were being manufactured and that existing customer orders were yielded from stock where suitable. Extensions was 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 stockholding.

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

Vendor-Managed Inventory

A key part of Global EPP's marketing mix was its vendor-managed inventory service. The distributor's demand was recorded via hand-held terminals, which scanned the product sales and sent the data back to the ERP system. Extensions analysed each distributor's demand and, in conjunction with the polymer, profile and size splits of the main forecast, calculated optimal minimum and maximum stock levels which were agreed with the distributor. Extensions then calculated the distributor replenishements, based on the minimum and maximum stock levels and the demand.

Other Solutions

Extensions provided many analyses for Global EPP, including:

• Accounts - outstanding debtors, weighted according to invoice age, size and payment history, which determined department focus.
• 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 desired product unavailable.

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