21 July 2009

Manufacturers can reap rewards if they give careful thought to planning and scheduling, says Mike Novels of Preactor International.

Preactor International is an independent company focusing entirely on the creation of innovative tools to help organisations plan and schedule their demand against the finite capacity of plants or businesses. We asked president and CEO Mike Novels about the company and its work in the manufacturing industry.

Tell us about your area of expertise - is there a difference between planning and scheduling?
Absolutely. Planning systems typically plan in ‘buckets’ of time – such as a shift, day or week – and do not consider the sequence of operations on specific resources within a time bucket. Real scheduling systems take into account the sequence of loading on each resource and retain that sequence as part of the schedule. This can be very important for many if not all companies. For example, a company may want to give priority to one order over another within a time bucket to stop an order being delivered late. In other applications there may be sequence-dependent changeover times, so optimising the sequence of batches on resources can maximise efficiency and minimise non-value-added activities. An easy way to distinguish them is to ask the vendor to give you a work-to or dispatch list for each resource after running the system. If they can give you the start and finish time of each operation on each resource, then you have a detailed scheduling system.

We hear a lot about APS. What are your thoughts?
APS is a much maligned and badly used acronym. It should stand for ‘advanced planning and scheduling’, and was originally defined by APICS, which included generating a detailed schedule based on the simultaneous consideration of finite constraints and materials availability. Some vendors call it an advanced planning system, and most of these do not attempt detailed scheduling or offer the ability to use multiple constraints in their model.

How can you help manufacturing companies to optimise planning and scheduling?
Companies need the visibility to manage resources and orders more efficiently, so they can reduce costs and improve customer service levels. The Preactor family of products is aimed to help small, medium-sized and multinational businesses achieve this. They can run on a standalone basis, but are more typically integrated or linked to other legacy software packages such as enterprise resource planning (ERP), supply chain management (SCM), manufacturing execution systems (MES), accounting and shop floor data collection systems. The primary objective of these products is to provide planners with an interactive decision support tool to generate feasible schedules that meet the business goals of the company. Unlike spreadsheets, wall boards and other less capable software tools, Preactor can model any type of process to any level of detail to generate achievable schedules.

We have more than 100 case studies that demonstrate a very impressive return on investment. Obviously the benefits vary from one company to another, but central to them is the visibility that planners have when a schedule is generated days or weeks ahead, telling them where any problems will be – it’s like a crystal ball.

Companies need the visibility to manage resources and orders more efficiently, so they can reduce costs and improve customer service levels

Mike Novels, Preactor International The planner then runs ‘what if’ scenarios without touching the live schedule, to test possible solutions to problems such as changing priority of orders or adding further capacity. Once the new schedule has been decided upon, this can be used to synchronise materials delivery so you don’t have unwanted inventory absorbing capital in the stores.

It’s not untypical for companies to reduce inventory and work in progress by 50 per cent. Reducing non-value-added activities and bottlenecks has also produced a 25 per cent improvement in efficiency, increasing throughput using the same resources. And, just as important when competition is at its fiercest, on-time delivery performance is dramatically improved.

How do you use Microsoft technologies?
Preactor has been a Microsoft Gold Partner for many years, and Microsoft tools, databases and operating systems run like a thread through our cloth of products and culture. Our products run on Windows XP and Vista and have tested well on Windows 7. The database it runs on is SQL Server and the development tools and languages we use are all Microsoft. And of course, our products readily integrate with and add value to Microsoft Dynamics GP, NAV and AX. Many of our partners sell these products, and it enables them to differentiate against other ERP systems that do not have state-of-the-art advanced planning and scheduling capabilities.

We have many installations and reference stories to tell when it comes to Microsoft Dynamics ERP systems. We have standard links to GP, NAV and AX. Each of these has a different level of capability for scheduling but there is a place for Preactor in all of them.

How do you maximise market presence?
We sell mainly into the discrete manufacturing and process sectors though there are also ports, airports, maintenance operations and other logistics and service companies using Preactor. More than 2,500 companies have purchased Preactor since the first version came out in 1993, and our installed base is unrivalled in planning and scheduling business world.

We have a predominantly indirect model. As you can imagine, it would be hard for a company of our size to dominate the market and sell into 65 countries without help! We have a network of partners around the world who sell, implement and support Preactor. These companies range from small consultancies to mid-range ERP companies and their distributors. We train them and provide technical support where needed. Local support can be very important – not only is telephone support given in the local language, but also multinationals can roll out a Preactor solution to multiple plants with local expertise.

Are you seeing a slowdown now, and do you see one coming?
Not so far. In fact we had our best ever year in 2008. Companies tell us that they don’t want to commit at the moment to ‘big bang’ projects. They want smaller projects that attack specific pain points. Predictions from analysts suggest that shop floor operational software products like ours, which help companies both to become more agile in process execution and to respond effectively to a more unpredictable demand, will have the highest growth in the next five years.

We grew by 20 per cent last year, and we hope to maintain that even during the downturn. We have some exciting new developments coming through for our next release and we expect to maintain the number of new companies buying Preactor at 250-300 per year. We continually look for new partners to work with to open up new opportunities and markets, and many of them I am sure will come from the Microsoft ecosystem. 


This article first appeared in the Summer 2009 edition of Prime.

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