Production planning system optimization – reducing calculations from 16 hours to 30 minutes
Area of collaboration
System implementation
Industry
Manufacturing
Tools
Implementation benefits
Reduction of production calculation time by 97%
Precise production cost calculations for every product
Real-time modeling of various production scenarios
Elimination of manual work through automatic synchronization with SAP
Effective budget management across 350 cost centers
About the Client
A European leader among comprehensive furniture solution manufacturers headquartered in Poland, specializing in the production of office furniture and public space furnishings – from conference rooms to stadiums and airports.
Key Organizational Challenge
- Inefficient production planning system – lack of IT tools for analyzing large data volumes
- Extremely long calculation times – calculating machine hours and labor requirements took up to 16 hours
- Lack of planning flexibility – inability to respond quickly to changes in orders
- Resource waste – difficulties in employment planning and optimal machinery utilization
- Timeliness issues – order fulfillment delays due to inaccurate planning
Implementation objective
- Access to precise manufacturing costs (COGM) for every product
- Capability to analyze large data volumes in real-time
- Dramatic reduction in machine hours and labor requirement calculation time
- Optimization of workforce planning at production facilities and machinery utilization
- Ensuring on-time order fulfillment
COLLABORATION PROCESS
How did we solve the Client's challenges?
The implementation of an advanced production planning system in IBM Planning Analytics began with analyzing the specifics of the furniture industry and designing a data flow model. A key element was creating sales budget allocation algorithms and a manufacturing cost calculation system.
Step 1
Analysis and model design – We designed a system architecture that takes into account the specifics of office furniture production and key business processes that translate into on-time order fulfillment and workforce planning.
Step 2
Sales budget allocation system implementation – We implemented a system that automatically breaks down the sales budget into a detailed production plan for specific products. Historical sales data served as the key to precise forecasting.
Step 3
Cost of Goods Manufactured (COGM) module implementation and calculation optimization – We implemented a system for calculating Technical Manufacturing Cost and machinery load. We reduced calculation time from 16 hours to just 30 minutes!
RESULTS
Implementation benefits
Calculation time reduction by 97%
Thanks to advanced production planning system algorithms, calculating machine hours and labor requirements now takes 30 minutes instead of 16 hours.
Comprehensive production planning system
We automated the entire planning process – from sales budgeting, through allocation to individual products, to detailed production schedules taking into account machinery and workforce availability.
"What-if" scenario analysis
We enabled real-time modeling of various production scenarios – from testing product mix changes, through machinery utilization optimization, to analyzing the impact of raw material price fluctuations on profitability.
Full SAP BW integration
Two-way integration ensured automatic export of production plans to SAP BW and import of execution data and system metadata, eliminating manual data entry and synchronization.
A 12-month contract evolved into a multi-year partnership
Budget planning across 350 cost centers
The spectacular success in production planning led to system implementation across remaining cost centers, covering areas from production lines to IT and HR departments.
Automated organizational cost accounting
The system automatically allocates shared costs (energy, rent, depreciation) across all departments and projects in seven precise phases, ensuring complete financial control over the organization.
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