i2PMBusinessAnalysisHuaweiFPv5.0.doc

Huawei Technologies
Huawei APS Project

Business Analysis
Factory Planner

Revision 5.0
14-Aug-2002
© 2001 i2 Technologies, PROPRIETARY and CONFIDENTIAL
TABLE OF CONTENTS
PURPOSE 5
SCOPE OF THE IMPLEMENTATION 5
2003 Go Live 5
OVERVIEW OF OPERATIONS – AS IS PROCESS 6
Overview of business process 6
MDS 8
MPS 8
Purchasing 9
Manufacturing plan 10
BUSINESS SCENARIOS 11
In Scope Business Scenarios 11
Out Of Scope Business Requirements 12
BUSINESS SCENARIO DETAIL: FP-1. MATERIAL ASSIGNMENT ACCORDING TO DEMAND PRIORITY 13
BUSINESS SCENARIO DETAIL: FP-2. PLAN FOR TIER1 ORDERS WITH ORDER HOLD STATUS 14
BUSINESS SCENARIO DETAIL: FP-3. ASSIGN HIGHER DEMAND PRIORITY IF ONE OF ITS WORK ORDER HAS BEEN RELEASED. 15
BUSINESS SCENARIO DETAIL: FP-4 MATERIAL PLANNING FOR POC FORECAST 16
BUSINESS SCENARIO DETAIL: FP-5. R&D MATERIAL REQUIREMENT 17
BUSINESS SCENARIO DETAIL: FP-6. ACCOUNT FOR THE SHIPMENT TIME TO DELIVER TO CUSTOMER 18
BUSINESS SCENARIO DETAIL: FP-7. ASSEMBLY COORDINATE FOR (POC AND ATO) UNDER PTO 19
BUSINESS SCENARIO DETAIL: FP-8. PTO FROM THE SAME SHIPSET WILL COMPLETE TOGETHER 20
BUSINESS SCENARIO DETAIL: FP-9. SAFETY STOCK 21
BUSINESS SCENARIO DETAIL: FP-10. OPERATION LEVEL MATERIAL CONSUMPTIONS 22
BUSINESS SCENARIO DETAIL: FP-11. CONSUME FROM INVENTORY BUFFERS 23
BUSINESS SCENARIO DETAIL: FP-12. ALTERNATE PART FUNCTION 24
BUSINESS SCENARIO DETAIL: FP-13. ENGINEERING CHANGE ORDER 25
BUSINESS SCENARIO DETAIL: FP-14. COORDINATE WORK ORDERS FOR FINISHED AI AND SEMI-FINISHED AI 26
BUSINESS SCENARIO DETAIL: FP-15. AI WORK ORDER GENERATED BASED ON LOT SIZING RULE 28
BUSINESS SCENARIO DETAIL: FP-16 CHECK BOM, SUPPLIER DATA AND UNPLANNED ORDERS. 29
BUSINESS SCENARIO DETAIL: FP-17. RELEASE WORK-ORDER WITH MATERIAL SHORTAGE 30
BUSINESS SCENARIO DETAIL: FP-18 REVIEW LATE ORDERS AND MAERTAIL ASSIGNMENT 32
BUSINESS SCENARIO DETAIL: FP-19. WIP REPORTING AND PLANNING 33
BUSINESS SCENARIO DETAIL: FP-20. SCHEDULE FROZEN PERIOD 34
BUSINESS SCENARIO DETAIL: FP-21. RESOURCE GROUPING FOR PRODUCTION PLANNING 35
BUSINESS SCENARIO DETAIL: FP-22. MULTIPLE PARALLEL RESOURCE PLANNING 36
BUSINESS SCENARIO DETAIL: FP-23. FINITE CAPACITY BALANCING RULE 37
BUSINESS SCENARIO DETAIL: FP-24. MINIMUM UTILIZATION REQUIRED FOR SUBCONTRACTORS – MANUAL PROCESS 38
BUSINESS SCENARIO DETAIL: FP-.25 REVIEW CAPACITY PLAN 40
BUSINESS SCENARIO DETAIL: FP-26 REVISE CAPACITY PLAN 41
BUSINESS SCENARIO DETAIL: FP-27. SCHEDULING RULE 42
BUSINESS SCENARIO DETAIL: FP-.28 ADJUST SCHEDULE 43
BUSINESS SCENARIO DETAIL: FP-29. CONSOLIDATE PR BASED ON TIME AND LOT SIZING RULE 44
BUSINESS SCENARIO DETAIL: FP-30. PROCUREMENT SUGGESTION WITH BLANKET PO NUMBER 45
BUSINESS SCENARIO DETAIL: FP-31. VENDOR ALLOCATION 46
BUSINESS SCENARIO DETAIL: FP-32. FORECAST FOR VMI VENDORS 47
BUSINESS SCENARIO DETAIL: FP-33. DELIVERY SCHEDULE FOR JIT VENDORS 48
BUSINESS SCENARIO DETAIL: FP-34. EACH FACTORY BUILDING AT SHENZHEN SHOULD CONSUME INVENTORY FROM ITS OWN BUILDING FIRST, OUTPUT FACTORY LOCATION FOR PO FOR VENDOR DELIVERY INFORMATION 49
BUSINESS SCENARIO DETAIL: FP-35. OUTPUT PRODUCTION SCHEDULE 51
BUSINESS SCENARIO DETAIL: FP-36. REPORTING 52
OUT OF SCOPE BUSINESS REQUIREMENTS 54
FP-O-1 Manually Entering of BOM 54
FP-O-2 Different Attribute For Part in BOM 54
FP-O-3 Large Quantity Small Value Item Management 54
FP-O-4 AI Phase In and Phase out 54
FP-O-5 Adding Urgent Orders in FP directly 54
FP-O-6 Inventory Tracking Status 55
FP-O-7 Customize ATO Routing. 55
FP-O-8 Schedule Work Orders For Portion of AI Forecast 55
FP-O-9 Check Software and Documents Before Work Order Release 55
FP-O-10 Plan Change KPI 56
FP-O-11 Track Factory’s Execution Adherence to the Schedule 56
REVISION HISTORY 57
MAJOR CHANGES SINCE LAST REVISION 57
REQUIRED APPROVALS 58
Purpose
The Business Analysis document captures the As-Is Process, identifies improvement opportunities and defines the To-Be Process. It also documents business scenarios that describe the workflows and business processes that the software solution should address. It elaborates on the available inputs, required processing (including timing and frequency considerations) and the required outputs. Each scenario in turn helps in defining what solution features would be required.
The document is a supporting tool to decide on the features and functionality needed in the solution. The use case scenarios are later used to validate and accept resolved issues. The document should be used at the start of the Solution Architecture phase, and continually reviewed throughout the implementation as more information becomes available.
The To-Be Process Map is a separate document available in i2 Project Document Library for Huawei project.
Scope of the Implementation
2003 Go Live
As a module in the APS solution, FP perform material and capacity planning, as well as factory scheduling for HW. FP plans for all demands in HW, including customer orders, forecasts, R&D, as well as internal demands. The
The organization involved in the scope of Phase I is Huawei’s factory in ShenZhen for all the product divisions. This phase will enable the HW ShenZhen factory to:
· Provide material requirement forecast planning for all planned procured parts up to 12-18 month
· Plan material based on the feasible production plan up to 4-6 months, or the longest lead-time for non-critical material
· Improve demand due date performance by reviewing early warning of late orders and material shortage
· Plan for alternate component requirements
· Generate production plan over the planning horizon, and production schedule for the frozen period.
· Provide visibility into material and capacity problems
· Better supply to demand match to reduce inventory level
Planning horizon will be 6 months that starts with daily buckets for the first two weeks, followed by weekly buckets for the next 1.5 month, and then followed by monthly buckets. For the monthly run of FP to generate master material requirement planning, up to 18 months of forecast can be used. FP generates procurement plan only for non-critical components. MP generates the procurement plan for critical components. From MP, the constraint forecast demand (AI and POC) as well as the critical material supply would be the input to FP.
FP will perform the factory level detailed material planning for all components, as well as all the major bottleneck resources. Scheduling will also be performed on the bottleneck resources.
Use the FP schedule result as a base; factory will schedule other non-constraining resources as well as the operators. FP outputs the production plan including WIP back to MP as its supply.
Based on a feasible material and capacity, FP sends material requirement forecast, and procurement recommendation for all planned parts to SCC for collaboration. Exceptions such as material shortage and expedition recommendations are also provided to the buyer. FP also outputs JIT/VMI pull signal based on near term production schedule.
Overview of Operations – As Is Process
Overview of business process
At HUAWEI the planners of different department are in charge of materials planning. And the planners only plan the products for their own department. All the planning processes are separately. The whole process is:
a. Gathering and process all demands with MDS (M
b. Generate MPS
c. Run MRP and Scheduling
d. Process WO and PR
e. Execute WO and PR

The Bill-of-materials for a typical Huawei sales order item is as in the following figure:

Note that PTO at the top of the BOM is a packing process, and does not have any routing. The sales order line item will be at ATO level. SMT factory is in the MTS mode, producing according to forecast. There is a SMT inventory warehouse for SMT boards. ATO factory perform the final assembly and testing when Huawei receives the order.
In simple words, ‘Planning at the ATO level’ is ATO. The ‘Planning at the SMT level’ is MTS (Made To Stock). ATO’s are unique to customers whereas SMT’s are not. Thus, multiple unique ATO’s share common SMT.
MDS
In MDS phase, planners gather all the forecasts first. Then check and adjust the forecasts. After confirming the forecasts, the planners gather all the demands together, that mainly coming from the following four ways
a. Demands from marketing plan department
b. Demands from the business department (real sales orders)
c. Internal demands between different departments
d. Independent requirements from different departments
After this phase, planners know all the demands that needed to be planned.
MPS
To generate MPS, planners first generate a MPS plan and get the relation reports. Then they adjust the MPS result before sending to the planning manager for approval. After the planning manager confirmed the MPS result, the planners need to maintain the new MPS plan. Then the MRP scheduling plan is generated.
When adjusting the MPS plan, the planners consider the five factors below:
a. Version change
b. The capacity constraint of the key resources
c. The requirements change from the marketing, and changes in internal requirements
d. The planning percentage
e. Other things such as basic data not accurate, the planning attribute not correct and special orders etc.

Purchasing
Ø Purchasing forecast
There are two types of purchasing forecast, one is weekly forecast, and the other is monthly forecast.
Weekly forecast covers three months purchasing forecasts. The materials are mainly locally supplied. And the purchase lead time are relatively short. Some examples are packaging materials, PCB etc.
Monthly forecast covers nine months purchasing forecasts.
Special materials are only purchased when the real sales orders are received. They are manually managed and released.

Ø The MAX/MIN method allows MAX and MIN inventory for the materials. When the material’s inventory is lower than the MIN value, they will be purchased use the following formula:
Purchase quantity = MAX – Inventory – PO (time based) + Required quantity of sales order (time based)
R&D material planners manually plan and enter the PR of the material for R&D’s exclusive use.
Manufacturing plan
The planners generate the production reports using the manufacturing data of the first three weeks. Planner only releases the manufacturing orders that begin in the next two days in the manufacturing execution system.
Normally planners only release work orders when the materials of work order are all ready in the inventory. But in some urgent cases, they also release the work order even when not all the materials are all ready. The shortage material may be arriving within the following two days.
Work orders for special AI are released when the actual sales orders are received.

Business Scenarios
Introduction:

Based on the interview questions and discussions with Business Units process owners and factory schedulers, various business scenarios that represent FP’s business requirements have been compiled.
In Scope Business Scenarios
Serial Number
Categories of Scenarios
Target User Scenarios within Category/Comments
FP-1
ICP - Demands
Material assignment according to Demand priority
FP-2
Plan For Tier1 Orders With Order Hold Status
FP-3
Assign higher demand priority if one of its work order has been released
FP-4
Material planning for POC forecast
FP-5
R&D Material Requirement
FP-6
Account Shipment time to deliver to customer
FP-7
PTO From The Same Shipset Will Complete Together
FP-8
Assembly coordinate for (POC and ATO) under PTO
FP-9
Safety Stock Planning
FP-10
Operation Level Material Consumption
FP-11
ICP - Supplies
Consume From Inventory Buffers
FP-12
Alternate part Function
FP-13
Engineering Change Order
FP-14
Coordinate Work orders for finished AI and semi finished AI
FP-15
AI Work Order Generated Based On lot sizing rule
FP-16
Check BOM routing error
Check BOM, Supplier Data And Unplanned Orders.
FP-17
Review factory problems
Release Work-order with Material shortage
FP-18
Review late orders and material assignment
FP-19
Review frozen schedule
WIP Reporting And Planning
FP-20
Schedule frozen period
FP-21
Finite capacity balancing
Resource grouping for Production planning
FP-22
Multiple parallel resource planning
FP-23
Finite capacity balancing rule
FP-24
Minimum Utilization Required For Subcontractors – Manual Process
FP-25
Review capacity plan
Review Capacity Plan
FP-26
Revise capacity plan
Revise capacity plan
FP-27
Generate schedule
Scheduling Rule
FP-28
Adjust schedule
Adjust Schedule
FP-29
Procurement recommendation
Consolidate PR Based On Time And Lot Sizing Rule
FP-30
Procurement Suggestion With Blanket Po Number
FP-31
Vendor Allocation
FP-32
Forecast For VMI Vendors
FP-33
Delivery Schedule For JIT vendors
FP-34
Each Factory Building At Shenzhen Should Consume Inventory From Its Own Building First, Output Factory Location For PO For Vendor Delivery Information
FP-35
Output schedule
Output Production Schedule
FP-36
Reporting
Reporting
Out Of Scope Business Requirements
Serial Number
Categories of Scenarios
Target User Scenarios within Category/Comments
FP-O-1
BOM
Manually Entering of BOM
FP-O-2
Different Attribute For Part in BOM
FP-O-3
Large quantity small value item Management
FP-O-4
AI phase in and phase out
FP-O-5
Add demand
Adding Urgent Orders in FP Directly
FP-O-6
Inventory
Inventory Tracking Status
FP-O-7
Routing
Customize ATO routing
FP-O-8
Release schedule
Check software and documents before work order release
FP-O-9
Schedule work orders FOR PORTION OF AI forecast
FP-O-10
KPI
Plan Change KPI
FP-O-11
Track factory’s execution adherence to the schedule
Business Scenario Detail: FP-1. Material assignment according to Demand priority
User Scenario:
Order priority for all demands (sales, forecast, internal, etc) are assigned according to Huawei’s internal rule (e.g., priority based on customer tier). FP must assign material and allocate capacity based on the order priority.
Planners/Users Impacted: Planners

List of Causes/Triggers for Scenario:
Sales, forecast and internal demands entered from MP and ERP need to be prioritized and planned.
Related Scenarios:
None
Frequency: Demand priority logic is used every time the planner produces a plan. Currently the plan is produced once a day.
Decision to be Made/Action to be taken: The sequence of which the orders are being fulfilled.
Customer/Decision Maker: Planner
Time Allowed to Make Decision: Default Order Priorities set based on customer tier. Order Priorities changes handled in S&OP process.
Input Data Requirements: Every demand, as well as forecast, must have a priority.
Logic Requirements: Demand sort priority
In