When new trends are introduced, there seems to be a tendency to rethink the name every now and then. Thinking about names is important, and I must confess, I am obsessed by using correct names for things. During my career of designing planning systems, there have been countless moments where I have asked myself: what is this for? Why did we introduce this screen? What logic is behind this attribute? Using the right name can be of great help in understanding planning – and other – systems years after they have been implemented. Normally I would not count on the documentation being easily accessible, up-to-date nor complete.

Please be warned there is a bit of hair splitting in this article – but I also believe that naming is about making choices on the actual meaning of things. So when you are not bothered by an allergy to discuss fundamentals, feel free to read on.


Why change the name for a class of systems when the current name is known and understood? Take for example Material Requirements Planning (MRP), which evolved from MRP to MRP II to ERP. When MRP was introduced, somewhere in the 1960s, it became clear quickly that it was not very good at managing finite capacity. Hence, some bells and whistles were added to MRP-based computer systems, such as CRP (Capacity Requirements Planning) and RCCP (Rough Cut Capacity Planning). The term MRP II – Manufacturing Resource Planning – was introduced in the 1980s to capture these ‘extended’ MRP (I) systems. And later even, when other functional domains were added to MRP (II) systems – such as human resource management, maintenance, quality management – these systems were renamed to ERP – Enterprise Resource Planning.

From the extending scope, these name changes might seem logical. However, there are a number of problems that I see with MRP evolving into ERP. Firstly, ERP systems are not only about planning resources – in the sense of allocating tasks to resources in time. Hence, the R and P in ERP might as well be omitted – this leaves us with the E, which then would become Enterprise Systems. Second, Enterprise refers to a for-profit business run by an entrepreneur, and I believe the scope of ERP is wider than that. A better name would therefore be Business, although that seems to exclude certain categories of organizations, such as government. An even better term would be Value Chain Systems, as ERP’s are systems used by organizations that have some kind of value chain. They produce something, whether it be physical goods or services. And these systems claim to cover most elements of business processes, so we do not need to be more specific than this.

Let me also note a side effect of this renaming exercise: what seems to have been forgotten is that the planning ‘algorithm’ in ERP still is based on MRP. So, the core element of planning in ERP systems has not changed. And MRP is basically two things: material explosion and leadtime offsetting. Necessary, but not sufficient, and still suffering from many deficiencies (explained here), that go beyond finite capacity planning.

For that reason, systems were designed to close the gap between MRP and reality. Not surprisingly, such systems were initially referred to as FCP – Finite Capacity Planning. The first known versions of these were computerized Gantt charts – in Germany they were called Leitstands – visualizing jobs assigned to resources. It should be mentioned that the oldschool Leitstands were probably part of Manufacturing Execution Systems (MES) and even today, there is a functional overlap between planning systems and execution systems, as both can offer support to assign jobs to resources in a visual manner.

The birth of APS

Thanks to computer technology, global developments in supply chains and the data backbone provided by ERP and MES systems, the FCP systems developed further and their name changed to APS – Advanced Planning and Scheduling. It is not clear where and how this name was conceived, but the adjective ‘advanced’ is probably intended to set such systems apart from MRP – the ‘basic’ planning technique. Although not being very descriptive, APS is not a bad name, and generic enough to avoid lengthy discussions about what is included or excluded from this class of systems.

However, the geniuses predicting trends have not faltered, and in the meantime a new name for APS systems has been coined: Supply Chain Planning & Optimization. Unlike the evolution that we have seen in the MRP to ERP renaming, it seems to refer to the same class of systems – only the name is new. So what would justify renaming APS to SCP&O? Should we include the term Supply Chain in the name? Some APSses are not so much used to plan supply chains, but for example, a group of people doing something, like planning air traffic. With some fantasy, one could argue that also air traffic controllers are a supply chain by themselves. However, it requires some extended view on what a supply chain is, and therefore it does not make the system class name clearer. Some people might assume, by reading the name, that SCP&O systems are ‘only’ about physical supply chains – the ones where you see stuff moving about in a kind of ordered fashion.

Another striking element of SCP&O is the inclusion of both Planning and Optimization. The term Scheduling seems to have been dropped, perhaps to reduce some of the clutter again. One could argue that APS systems are not only about planning, but also about scheduling. However, I see planning as the more generic term that encompasses scheduling – although in detail, there is a clear separation between the two. So I am actually fine with dropping the S. However, to have both Planning and Optimization in the name confuses me. Isn’t planning also about optimization, when reading ‘optimization’ as ‘improving with some clear objective’? Why create a plan if there is no intention to optimize (read: improve) at all?

Alternatively, SCP&O suggests there are two types of systems, united in one class – supply chain planning and supply chain optimization. Would it be possible to optimize supply chains without doing any planning? Perhaps, for example by making improvements in the execution itself. For example, when quality is improved, or downtimes of machines are reduced, the supply chain is further optimized. However, I believe that the systems captured by the term SCP&O are not intended to be used for that – instead, there is always a link between the planning and the optimization. As a consequence, I believe the term optimization (ambiguous as it can be) can be dropped from the name.

Planning Systems

This leaves us with the P from planning, and I believe this is enough to define the class of systems that do exactly this – planning. And let us make one exception here: systems that are used to forecast demand are often part of the offering from APS vendors, although demand ‘planning’ strictly spoken is not planning, as there are no resources involved – and hence no assignment to resources. However, because we like demand planning, as it is an important function to feed the ‘real’ planning functions of APS, we allow it to be called APS as well.

From my perspective, the term SCP&O can be skipped – may be the next name will be a better one. Ideally, I would propose to use the term Planning Systems, if we were able to start from scratch now. However, to keep consistent with previous names, I prefer APS – or TAFKAPS – the Application Formerly Known as APS.

also published on LinkedIn