Imagine you’re hosting the family reunion this year. 75 people are going to be expecting a great venue, amazing food, and some planned activities. But you’re just one person, with some help from your girlfriend. Are you going to cook all the food, decorate the community hall, schedule and set up for the band, AND be there to greet everyone as they arrive? I certainly hope not. You’re going to hire a caterer for the food, be sure the band brings their own crew to set up and tear down the stage, and rope your girlfriend into being the greeter so you can still supervise the proceedings. On the other hand, if you’ve got a wife, 3 grown kids with their own significant others, and a circle of close friends, maybe you can do it all in-house. This is the power of outsourcing, it keeps the playing field even for even the smaller players. The question is—how do you maintain control over the cooks, musicians, crew, and cousins?
The manufacturing industry is in a bit of a pickle. Emerging technologies are coming at it from every direction, as digital transformation and integrated supply chains are being touted as the solution to all their woes. Industry 4.0, Logistics 4.0, AI, IoT, RFID, there are enough buzzwords and acronyms to make even the most seasoned production planner’s head spin. What’s a planner to do? As with so many areas of life, the key is to move one step at a time. See if any of the following five challenges apply to you, and if so, start by addressing them. Then, when you can see your way clear of that challenge, you’ll have a better understanding of what to address next for the greatest impact.
Consumer financial technology has reached a tipping point where pretty much everything you need to do on a regular basis can be done electronically. You can pay the rent, make a car payment, and even lend your friend $20 all from the convenience of an app on your smartphone. Then there’s that one payment, you know the one, when you have to dig around in your desk drawer to find your checkbook. At its core, supply chain integration does for you, the production planner, what eliminating the checkbook does for the general population, speeds up transactions and allows every relevant stakeholder access to the information they need. It’s about enabling your entire end-to-end supply chain to interact and interconnect via Industry 4.0 technologies. Because no matter how much of that tech you have deployed internally, if your supplier is still presenting you with a handwritten invoice—well, it just doesn’t add up.
Right now, even if your factory is relatively well equipped with IoT devices and RFID chips that can send production information back to your control tower, there’s a good chance that you’re still relying heavily on time-triggered events as your products make their way across the production floor. Sure, you’re gathering data at various stages of the production process, but that data isn’t automatically causing anything to happen. If something seems to be going catastrophically wrong, a production planner might get an alert and perform some manual triage, but most of the time the data functions as something of a post-mortem.
Do you check the weather report before leaving for work? What about for the upcoming weekend, to be sure your plans for a hike won’t be washed out? OK, how about paying attention to the long-range outlook, like how much snow is expected next winter and how that will affect the prospects of a drought the following summer? Weather forecasting shares many aspects with demand forecasting for your supply chain. You need to be able to look at the near term—say the upcoming few weeks—as well as the next 3-18 months and beyond. This is equivalent to checking the weather for tomorrow, the next two weekends, and the upcoming few seasons. If you want the whole picture, you need to gather as much information as you can on all three time frames.
Remember the “paperless office?” Back in the early days of computing for the masses, and particularly after the invention of the public internet, it was all any of the pundits could talk about. They expounded on the wonders of digital this and online that, with the underlying theme being the elimination of physical copies of paperwork. It’s been well over two decades, and I don’t know about you, but my last office had a 30’ run of filing cabinets that certainly weren’t empty. Today, those same pundits are going into great detail about the “disruption” of the automotive industry that electric vehicles (EVs) signal. But is the shift to EVs really going to have that much of an impact? As with so many things, the answer is a resounding “it depends.”
Life in the digital age is meant to be easier for manufacturers: rather than using spreadsheets to plot out potential production and logistics plans that attempt to meet customer needs within existing constraints, you’re supposed to be able to plan digitally—arriving automatically at the optimal route for your fleet to take from the factory floor to the distribution center, or the right production ratio to minimize downtime. This is where things like advanced planning and scheduling come in. They offer digital planning processes for the digital era, helping manufacturers to boost efficiency and limit disruptions.
Remember that one part of The Wizard of Oz? The one where the wiz comes out from behind the curtains? How was that one little guy able to control everything from his perch back there, without anyone being any the wiser? That I can’t tell you, but I can tell you we’re getting closer to a 21st-century version with the continuing maturation of the Internet of Things (IoT). The emerging technology that powers the 4th industrial revolution, Industry 4.0, is giving us a glimpse of what it would have been like sitting back there, with a view into all the goings-on of our realm.
You know that one product that seems to be in every outgoing order? The one kept all the way in the corner of warehouse 2, opposite from the loading dock? How much is it costing you to keep sending the forklift across 10,000 square feet of warehouse, multiple times per day? What if you moved that item to an empty bay 2 rows away from the docks? How much time, energy, and money would that save your logistics budget? If you don’t know the answer to any of these questions, it’s time to take a good, hard look at the logistics end of your supply chain to weed out the wasteful spending and tighten things up a bit. To get you started, we’ve pulled together a list of our top 5 areas of waste in supply chain logistics. If you can get these under control, you’ll be well on your way to a streamlined value chain and much-improved logistics ROI.
People say that the only constant is change. When they say that, they’re usually not talking about sales and operations planning (S&OP). And yet, what could be more relevant? If you’re an automaker, for instance, your business constantly needs to adapt to changing market conditions, customer expectations, technological realities, and other factors that can have a big impact on the success of your production plans, supply chain, and profits. There are any number of strategies that decision-makers use to try and address these constant internal and external changes, but one of the most commonly talked about (in some circles, anyway) is S&OP.