What is backward scheduling in SAP SD?

Forward scheduling and backward scheduling are key concepts in production planning. What are the differences between the two approaches and which one should you choose for your manufacturing business?

• Why is production scheduling important?
• What is Forward Scheduling?
  • Benefits of Forward Scheduling
• What is Backward Scheduling?
  • Benefits of Backward Scheduling
• Which method should you use?
• Key takeaways

Why is production scheduling important?

It is hard to overestimate the role production scheduling plays in the proper functioning of a manufacturing company.

Every business has to ensure that it uses its resources reasonably while completing orders in time. Material assets, workers’ time, and production equipment have to be well managed to ensure that costs do not eat away the profits and that customer expectations are met.

Production schedules are created to detail when specific workers should use specific equipment and materials to make a specific product. Companies can use either forward or backward scheduling to allocate resources, plan production, and make the necessary purchases that go into fulfilling customer orders.

Read more about Production Scheduling.

What is Forward Scheduling?

Forward scheduling means fulfilling production orders as soon as possible, according to the availability of the necessary resources. In a forward production schedule, tasks are scheduled in a row, in the order that they come in. The manufacturer provides the customer with a possible delivery time as a prediction that accounts for resource availability.

Basically, forward scheduling answers the question “When, at the earliest, can production start?”

Forward scheduling makes perfect sense, especially in serial production. When an order comes in, add it on top of the pile. It is easy to make sure that your workstations are loaded airtight. This is a simple approach to planning: the customer tells you what they need, and you tell them when the possible delivery time is.

However straightforward this approach is, it might not work very effectively if you make to order or produce according to a sales forecast. It might happen that a lot of orders are filled long before they need to be shipped – they take up storage and keep assets standing –, and other orders go overdue because the requested delivery date was not considered while planning.

Also read about Lead Time 101 – Definitions, Tips, and Tools for Manufacturers.

Benefits of Forward Scheduling

The clear-cut and simple premise of forward scheduling offers some convincing benefits, but it may also become a disadvantage in some environments.

The benefits of forward scheduling are:

• Easy to schedule manually.
• High rate of labor and machinery utilization as jobs are piled on top of each other.

The disadvantages of forward scheduling are:

• Higher inventory holding costs due to jobs being completed earlier than necessary, with finished products requiring handling and storage space.
• Longer lead times as production is always scheduled to capacity which cannot be increased when new orders come in.
• Risk of material stock-outs due to materials being consumed in advance. When an unexpected high-priority order comes in, there might not be enough of the necessary materials available to fulfill the order.
• There is little room for rush orders – a rush order could derail the current production, procurement, and delivery schedule.

Read more about Make-to-Stock Process Flow and Best Practices.

What is Backward Scheduling?

Backward scheduling, also referred to as reverse scheduling or just-in-time manufacturing, means that production orders are scheduled according to the clients’ requested delivery dates. When a customer puts in an order and requests a specific deadline, production is scheduled so that the order is fulfilled precisely by its due time.

Simply put, backward scheduling answers the question “When, at the latest, can production start in order to fulfill the order in time?”

Manually done, it is a cumbersome task to make sure that every single operation gets planned correctly – considering workstation loading, planned maintenances, holidays, and much more. That is why companies that want to employ this scheduling approach need to make use of a manufacturing ERP system that makes sure that all orders are scheduled so that they are filled just in time. When a requested delivery date is not attainable, i.e. when resources are not available in the necessary quantity in the timeframe the customer provides, the software will notify you instantly.

Benefits of Backward Scheduling

Although backward scheduling is much more complex than forward scheduling due to accounting for many moving parts, there are some substantial advantages to using it. These include:

• Lower inventory levels thanks to orders being completed just in time, resulting in lower inventory holding costs.
• Increased production efficiency thanks to optimal use of capacity.
• Shorter lead times.
• More flexible delivery time from the customer’s perspective, which increases customer satisfaction.

Some of the disadvantages are:

• Little buffer time when something unexpected occurs, which may result in missed deadlines.
• Bottlenecking when suppliers are unavailable (yet the JIT method has dictated there should be minimal safety stock). Production cannot resume until there are materials available.

Read more about Just-in-Time Manufacturing.

Which method should you use?

Both scheduling methods have their benefits. But which one should you choose? Well, that depends entirely on what and how you manufacture. Generally, make-to-stock manufacturers use forward scheduling while make-to-order manufacturers (but also those that make to stock according to a sales forecast) can opt for backward scheduling.

However, these two methods of scheduling can also be mixed. Companies can use different methods for different situations. For example, when a large number of orders come in unexpectedly, you can use backward scheduling to sort them out by their due dates. Then, when orders dry up for a while, you can again turn to forward scheduling to better utilize your production capacity and available resources.

The best way to make sense of scheduling would be to use MRP software. Using an MRP or manufacturing ERP system allows you to use both approaches concurrently, ensuring optimal scheduling at all times. The software accounts for all of the moving parts in the process so you would not have to, providing you with accurate lead times and tightly woven schedules.

Also read about the Top Six Manufacturing ERPSystems for Small Manufacturers.

Key takeaways

• Forward scheduling means fulfilling production orders as soon as possible, according to the availability of the necessary resources.
• The benefits of forward scheduling are high capacity utilization and ease of use.
• Backward scheduling (also known as reverse scheduling or Just-in-Time manufacturing) means that production orders are scheduled according to the clients’ requested delivery dates.
• The benefits of backward scheduling are lower holding costs, increased production efficiency, and shorter lead times.
• Whether forward or backward scheduling is a better option, depends entirely on the situation: when there are a lot of orders coming in, backward scheduling helps make sense of them without stretching lead times longer than they should be; when there are fewer orders, forward scheduling offers a straightforward way to schedule production.
• The best way to approach scheduling is to use an ERP system that allows you to use both methods at the same time.

You may also like: Periodic vs. Perpetual Inventory System – Definitions, Benefits, Examples

What is backwards scheduling?

What is the difference between forward and backward scheduling in SAP SD?

What is forward and backward scheduling?

What is the advantage to backward scheduling?