Control over all Eventualities

The logistics network at the Swiss company Novartis is a multi-faceted system. The pharmaceutical company, one of the five largest in the sector, has production facilities at 15 specialized locations worldwide. Novartis produces active ingredients, various interim stages and final preparations, for example the heart drug Diovan or the pain relief cream Voltaren. All branches also work with external suppliers. Partners take on a wide variety of tasks, from the production of active ingredients right through to product sales.

Accurate global production planning with the help of SAP Supply Chain Management (SAP SCM) ensures that these complex interrelations function smoothly. With the planning solution, the group always has an overview of its international supply chain.

Combining numerous factors

The interfaces between global planning and production are the detailed planners in the various plants. They define when the various orders are produced, and on what equipment. They not only have to take account of the availability of materials, machines and employees, they must also be able to react flexibly to changes at short notice, for example requirement dates that have been brought forward or operational disruptions caused by malfunctioning equipment.

This demanding task cannot be performed without a graphical representation of orders and resources. Because manual planning boards display free equipment capacities at a glance, they continue to be a standard tool for many production planners. However, they have one big disadvantage, namely that if sales orders are moved, there is no way of simulating alternatives and taking account of the numerous dependent factors.

One solution for all plants

Novartis was therefore looking for a detailed planning tool that connected the graphical representation with the advantages of modern IT systems. The company chose the SAP SCM component SAP Advanced Planning & Optimization (SAP APO). The software not only offered the required functionality, it also enabled the planning process to be standardized across the whole enterprise.

In April 2007, Novartis developed a prototype for the detailed planning of a production facility in the Stein plant in Switzerland. The pharmaceuticals manufacturer was supported in this project by AWISDO GmbH & Co.KG, which had already implemented SAP SCM in the enterprise. In December, eight months after the project start date, the solution was in productive operation for the first product group in the Stein plant.

Novartis now wants to introduce detailed planning with SAP APO step by step in the other production locations. As the template largely takes account of the requirements of the other plants, only the local factors need to be mapped in the rollout.

Central “cockpit”…

At Novartis, SAP APO acts as a central planning cockpit. Users personalize the solution in their profile by defining their own criteria, such as products, equipment or planning horizon, and can therefore always access orders in their “worklist”. With the integrated detailed planning board, they can see which equipment is fully utilized and which orders need to be scheduled.

The color coding shows at a glance whether the orders are planning orders or process orders. A planning order is generated by materials planning and is later converted to a process order, which then controls production. It is also immediately clear whether an order has already been scheduled and fixed, and as a result can only be moved manually.

Planning orders can be accessed directly from the detailed planning board with a mouse click. The most important information is displayed, for example material components, production steps, and resources. At the touch of a button, the tool converts the planning order into a process order. This triggers information to SAP ERP in the background, causing a process order to be created there too. This is used among other things as a reference document for picking the material components in the ERP solution.

…provides an overview

Unplanned order operations, which SAP APO indicates with a colored bar, are selected with the mouse and moved to free equipment times with the “Drag and Drop” function. They are therefore scheduled and the color highlighting disappears. SAP APO automatically generates the required setup and cleaning times for the order. The changed status information also is immediately available in SAP ERP.

If operations are moved, the solution reschedules all the dependent orders. The planner can tell by the color in the system whether constraints or dependencies have been violated. For example, the solution indicates whether material components are available or the order deadline has been overrun. An alert monitor also notifies the planner about exceptional situations.

Handling exceptional situations

Alongside the day-to-day planning that SAP APO carries out based on a defined strategy, the tool also handles exceptional situations. If an order has to be brought forward, for example, the planning strategy can be changed with ease. The planner schedules the order for the required date using “Drag & Drop” and in doing so, also moves the preceding or subsequent production orders. If conflicts arise, SAP APO informs the planner of this.

Production equipment experiencing disruptions can be blocked in the planning board. This equipment is then temporarily unavailable for detailed planning. Operations that were already earmarked for this equipment are moved using “Drag and Drop”. In these exceptional situations, SAP APO recalculates the complete planning situation and provides information on problems relating to capacity, deadlines, or quantities.

The detailed planning board is largely intuitive for users and can be adapted with personalized settings and individual working methods. The right mouse button or other special buttons can be used to access all the key functions. These include the complete range of order processing options, zooming, or the display of detailed information, for example.

Globally standardized processes

Novartis benefits in numerous ways from the new detailed planning tool in SAP SCM. “We have a powerful yet easy-to-use tool that provides planners with all the information and processing options they need,” says project manager Philippe Gerwill.

The seamless integration with SAP ERP has also had a positive effect for Novartis. The planner transfers the customer and product data from the ERP software and can create, change, and convert orders in SAP APO. Material requirements planning can be carried out in either SAP APO or SAP ERP. “All changes are available in real time in both solutions. As a result, the detailed planning and order processing applications always have access to the same information,” states Gerwill. This saves time and reduces the need for coordination in the event of changes.

With the 16 SAP ERP clients that the pharmaceuticals group runs globally, SAP APO enables processes in detailed planning to be standardized to a large extent. Over the medium term, Novartis aims to introduce the solution in other European plants, including those in France, Germany, Italy, and Spain.