Imagine for a moment that you’re on a flight from London to New York. You probably take It for granted that someone has charted an appropriate route at an appropriate altitude based on weather and air traffic patterns, and that departure, arrival, and flight time have all been carefully calculated based on past flights and current conditions. At the same time, no matter how much planning has gone into a flight, you probably also take it for granted that there is a pilot in the cockpit, measuring real-time information with her instruments and communicating with air traffic control to make necessary adjustments and course corrections as new scenarios emerge.
If you had walked onto a factory floor during the second or third industrial revolution, it would have been immediately obvious what was so modern about what you were witnessing. You would have seen raw parts being turned into complex products on a moving assembly line, or newly automated processes making use of modern industrial machinery and early computer networks. In the world of Industry 4.0, the so-called “fourth industrial revolution,” the differences in appearance might be more subtle. You might still see a mix of manual labor and automated, computerized systems carrying out various production tasks, while many of important innovation brought about by Industry 4.0 might remain invisible to you. You might even be prompted to ask, “what’s so modern about modern manufacturing?”
We discuss in great detail on this blog how integrated processes and optimized models result in enhanced operations, increased productivity, and more effective strategic vision. While these are certainly critical and worthy elements of discussion, they are part and parcel to a much larger concern we devote little conversation to: How these various planning and production techniques actually result in a more innovative way of doing business. Because, at the end of the day, a manufacturing company is a business, and a software solution or platform is only as valuable insofar as it helps a business develop and grow.
For example, take the idea of integrated production planning. Such a planning method is a core driver in helping today’s manufacturing companies (especially those in variant-rich industries such as automotive or packaging) not only reduce costs, but also create inroads for revenue generation and growth across the value stream.
Plenty has been written on the right way to choose the supply chain management technology that best fits your company’s needs, much of it focusing on broad organizational points like defining specific needs and long term business goals. Coming into the IT procurement process with intra-operational buy-in and a well-founded idea of how new technology should integrate into your workflows and key performance indicators (KPIs) is, of course, crucial to finding the right solution, but that’s not the end of the discussion. Once you’ve assessed your specific needs and your short- and long-term goals, how do you evaluate the technology itself?
Although automotive manufacturers have been hearing for years that Big Data is the next big thing, studies often show that executives, not just in automotive but across many different industries, fear that their organizations aren’t ready to take advantage of the new advancements in analytics. Big Data analytics can and will be a huge value-added proposition for companies hoping to stay competitive in the world of Industry 4.0, but it’s true that reaping the benefits of new technological insights often requires significant changes in workflows and IT infrastructure. Luckily, these changes are often not as daunting as they first appear. Here are a few suggestions for getting the most out of your advanced analytics.
Murphy’s Law states that whatever can go wrong, will go wrong—and nowhere is that more true than in the world of global supply chain management. Risk is simply a fact of life in almost all business spheres, but automotive industry manufacturers in particular frequently deal with incredibly complex supply streams that face a near-certainty of disruption. Managing complex relationships between suppliers, shippers, and production processes can lead planners to the brink of numerous potential pitfalls, but, luckily, in the era of Industry 4.0 there are more tools than ever designed to alleviate the pain points of the past.
Imagine for a moment that you’re an employee at an automotive manufacturing company. Every year of two, the owners create and share a strategic vision for the long-term future with management. Managers, in turn, create shorter-term plans of several months to put the longer-term vision into practice with Sales and Operations Planning (S&OP). As an employee, you manage your day-to-day tasks in accordance with those plans, responding the small crises of the workday with whatever resources and insights are available to you. Perhaps in responding to these situations, you find yourself wishing that there was something to bridge the gap between S&OP and those day-to-day processes. Sales and Operations Execution (S&OE) is that bridge, and it represents the path to the most responsive possible supply chain.
In a recent piece offering predictions for the state of supply chain management (SCM) in 2018, Gartner asserted that SCM was going to become increasingly technology-centric, with market forces putting tremendous pressure on manufacturers to adopt new and emerging technologies. When companies search for areas where their IT might be modernized, many may look to transport as a business process that can be further optimized through the adoption of modern logistics software. Once a new solution is adopted, however, it’s crucial that companies understand their technology well enough to get the most out of it, so that they can improve workflows and add value. To that end, here is a quick guide to putting transport logistics to work within your organization.
Imagine for a moment that your company is in the businesses of manufacturing parts for both conventional and hybrid vehicles. Based on the demand from your customers over the past year or multiple years, you develop a plan for allocating resources and person-hours to produce the right proportion of hybrid parts to conventional parts based on expected demand. Unexpectedly, a sharp increase in worldwide oil prices triggers a shift in demand away from hybrids and toward conventional automobiles that rely on gasoline. How will your production plans cope with the sudden change? Will your factory floors continue to produce a surplus of hybrid parts while orders for conventional parts go un-filled, or do you have the necessary planning agility to shift production to align with new demand paradigms?
Hopefully, you are in a position to safely assume the latter. But for many complex businesses, rapidly adjusting to demand is a perilously involved tasked, requiring the ability to assess and respond to new circumstances virtually instantaneously. One of the keys to building this level of agility into production processes is the integration of real-time and production planning.
Imagine you’re playing musical chairs. The music starts and stops and your instinct is to rush to the nearest seat before your competitors beat to you to it—but instead of a circle or a row of chairs, the chairs are scattered and hidden around the building at random. No one knows how many chairs there are, and no one is sure how to reset them before the next round begins. Surely this would be a confusing way to play the game, just as it would be a confusing way to run a business. And yet, many companies do just that, keeping real resource allocation hidden within planning siloes and mission critical data obscured by layers of disconnected IT infrastructure. The result is that long term cross-operational planning becomes impossible, with planners stuck in a reactive loop of constantly responding to roadblocks without the ability to be proactive. Integrated planning has long been touted as cost saving solution for complex businesses, one that specifically addresses the break-fix mentality that mires companies in minute-to-minute logistical snafus, but what is it, exactly, and how does it work?