Managing complex supply chains in uncertain times

By Luca Ianniello

A growing risk for manufacturers as they strive to maintain production schedules and on-time deliveries is the impact of supply chain volatility. Adverse regional and global events have caused unprecedented disruptions. Planners and managers must assume that, far from being singular once-in-a-lifetime events, such unpredictable disruptions are likely to recur. More common supply chain issues, like a supplier’s production suddenly going offline, make such predicaments inevitable. How can a manufacturing company manage its supply chain in a way that enables methodical and well-informed decision-making, leading to an optimized resolution of each disruptive event?

Achieving productivity and delivery goals even in the midst of such supply chain challenges is the subject of a new Siemens Digital Industries Software white paper titled, “Planning for a more resilient supply chain.” The paper explains the importance of a holistic approach to supply chain management and describes one such holistic model known as the control tower approach. It then lays out the role of advanced planning and scheduling (APS) and supply chain management (SCM) software in a holistic approach and details several opportunities to accelerate planning re-optimization through cross-functional collaboration of these two software solutions.

Where APS and SCM intersect

Any manufacturing company that operates within a supply chain has two powerful digital systems available to support holistic supply chain management and help to create a more resilient supply chain. These two systems offer complementary functionality. Advanced planning and scheduling (APS) helps manufacturers to optimize long and midterm planning and track and make informed decisions about the enterprise’s short-term and day-to-day production schedules. Supply chain management (SCM) orchestrates logistics, from planning and optimizing procurement and executing pickup and transport to performing analytics.

The SCM domain comprises most production-related activities that occur beyond the primary manufacturing floor: movement and storage of raw materials; inventory of supplied parts, components and subassemblies; outbound supply and distribution networks and movement of finished goods to the customer. Meanwhile, the APS plans and schedules actual manufacturing activities, accounting for production forecasts, long-term orders, availability and capacity of manufacturing resources, and sequencing of operations for efficient production and order fulfillment. With APS focused on the manufacturing floor and SCM focused on movement to and from the manufacturing floor, the complementary nature of these two systems is clear.

In holistic supply chain management, APS and SCM can be more than complementary. They can interact and perform cross-functional collaboration. By integrating the functionality of these two systems, manufacturers can expect to achieve entirely new levels of productivity, delivery speed and operational consistency even during adverse supply chain events.

A resilient supply chain is within reach

Collaborative application of APS and SCM produces the robust digital continuity between supply chain management and production planning and scheduling that is needed to successfully implement a holistic supply chain strategy. Read the white paper to learn more about five capabilities enabled by the synergies and advantages of an integrated APS-SCM digital ecosystem:

  1. Integrating manufacturing order planning with transport changes – When a change in supply transportation occurs, the SCM in an integrated system not only provides the new supply date to the APS but also maintains and updates it digitally.
  2. Integrating production planning with procurement optimization – When the APS defines a supply campaign with optimal supply dates for each material, instead of providing this information to the SCM in static snapshot form, the integrated planning and logistics system synchronizes capacity and supply planning. With this capability, a manufacturer is able to identify emerging synergies and exploit untapped saving potential.
  3. Integrating analysis of expediting existing requests and alternative procurement scenarios – When a request is received (such as an order expedition) after the production plan or schedule is already being executed, both APS and SCM can perform what-if scenarios with domain-specific variables. An integrated system enables faster optimization as data from one system is digitally communicated to the other.
  4. Integrating holistic supply chain visibility with days-of-cover management – Rather than leaving the APS to work with a fixed value for days-of-cover (DOC), an integrated SCM is able to communicate live DOC data directly to the APS – initially as configuration data for production planning, then on a periodic basis to support a continuous refining process.
  5. Integrating optimization and what-if capabilities – While an unintegrated APS or SCM must treat parameters determined by the other system as fixed values, full integration of the systems provides the opportunity to extend optimization and what-if capabilities across both domains.

Want to learn more about APS and Supply Chain Management? Try these Resources:

Supply chain management planning – challenges and opportunities

Supply chain disruptions are incredibly stressful for manufacturers. Without visibility into all levels of the supply chain, production planning can be difficult and disjointed. There are so many complexities and dependencies that need to be balanced. That is where supply chain management planning becomes crucial, and an advanced planning and scheduling (APS) solution can help manufacturers stay in control.

Planning for a more resilient supply chain

When manufacturers are asked to characterize their supply chain today, resilient is rarely the word that comes to mind. They are much more likely to call it complex or uncertain. Yet achieving a resilient supply chain has become increasingly critical in nearly every manufacturing sector.

The role of a holistic supply chain strategy and digitalisation

What do you need to make your supply chain less vulnerable? Siemens explains why a holistic approach to supply chain management is imperative.

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This article first appeared on the Siemens Digital Industries Software blog at