“If you’re not growing, you’re dying.”

While a little hyperbolic, this is an old saying often at the heart of discussion for so many of today’s manufacturing companies when it comes to expansion, increasing their market footprint, and raising their visibility in a very competitive field of play. The expectations and realities for manufacturing companies to create long-term, sustainable growth while at the same time showing signs of robust, short-term success is a delicate balancing act planners and managers are faced with executing at each touch point of the value chain. Because so much of today’s production cycle is connected through the integration and digitization of the supply stream, various process must work in tandem in order to achieve growth opportunities and propel companies into a prosperous future.

Ask anyone in the manufacturing industry: No matter how hard you try, disruptions, exceptions, and bottlenecks are just part of the business. In today’s global, complex automotive supply chain where demand planning and production programs often shift and change depending on a wide range of variables and elements - everything from the availability of component parts to labor to facility capacity and job scheduling - the ability of manufacturing companies to respond and weather these variables is critical to remain competitive in an increasingly crowded landscape.

But to help mitigate the risks associated with global manufacturing, companies have a new tool at their disposal:  sales and operations execution (S&OE). Coined in the last few years by supply chain industry publication Gartner, S&OE acts as a demand planning supplement or safety net to detect the possibility of bottlenecks or breakdowns in larger-scale planning platforms. This in turn allows planners and managers to create and deploy solutions to these disruptions to enhance each touchpoint of a company’s overall value chain. 

Every year, today’s manufacturing companies dedicate time, resources, and personnel to devising planning and production strategies designed to reduce the likelihood of disruptions across each touch point of the value chain. Whether we’re discussing integrated planning platforms, intelligent production sequences, or transport logistics, the ability to react and correct disruptions at the production, inventory, or transportation level depends largely on understanding the kinds of disruptions and how at-risk a manufacturing company is to experiencing each type. Given the interconnected nature of today’s global supply chain and expansive network of production facilities, warehouses, and transportation hubs, there is more opportunity than ever before for manufacturing companies to encounter disruptions or breakdowns at more touch points across their supply network.

However, this also means there is more information available for companies than ever before about the different breeds of supply chain disruptions and the methods companies can pursue to reduce the risk of these disruptions.

Take a television set from the 1980’s and one from 2017. Sure, both devices will function appropriately and allow you to view your favorite television show or movie, but the set from the 1980’s will clearly have a very limited set of capabilities compared with the one from 2017. The 1980’s set may not even have a remote. The picture will likely be much less clear, more grainy, and ultimately compromised. It may take a few minutes of running before the set functions properly. And odds are the set will be much more prone to malfunctions or breakdowns. On the other hand, the television from 2017 will have a much cleaner, crisper picture, allow for synergy with other applications such as a streaming device, and likely have a much longer lifespan.

In short, the 2017 television set will operate at a much higher level with a more streamlined operational platform for a much longer amount of time. The probability for error will be quite low and the 2017 will work in conjunction with other modern technology.

For so many companies in today’s digital manufacturing landscape, so much of transport logistics is still shrouded in mystery. Because a majority of manufacturing companies place a greater emphasis on earlier stages of the production cycle (planning, procurement, inventory management, and job allocation), little attention is often paid to successfully administering a transport management system or structure that effectively helps companies reduce transport costs and optimize transit processes.

This lack of visibility, as with almost every other aspect of global supply chain management, allows for misinformation or inaccurate understandings of just how and why an integrated transport logistics strategy is a critical value proposition for today’s manufacturing companies. Moving finished products from the production floor to the customer’s front door on-schedule and in good order is part and parcel of what effective production programs are all about, and transport logistics are a key driver in helping manufacturing companies achieve this ever-important goal.

When talking about creating and adding business value, much of the discussion surrounds planning and production programs — essentially, earlier stages of the production cycle where decisions and actions are executed based on such critical elements as procurement, resource allocation, facility and job management, and inventory optimization. But business value and important business moments can take place further down the line in the production cycle, especially in such a complex, variable-rich function as transport logistics.

Because transportation relies on so many varying factors each with their own level of uncertainty or constantly shifting constraints (fuel economy, routing, obstacles in transport routes, and others), the capability to mitigate and respond to these moving targets is a crucial driver in helping manufacturing companies maintain delivery timelines, enhance the accuracy of their delivery dates and windows, and drive enhanced customer service. In addition, because transport networks can be varied and include a number of partners across a wide range of regions or locales, which can lend to even more complexity and nuance in facilitating a transport logistics strategy that drives business value.

It’s a question each and every manufacturing company grapples with: How can we reduce our transport costs and attempt to normalize our transportation strategy given the number variables associated with shipping our products? In an industry like manufacturing where so much of how efficiency a company functions is dependent on getting the right product to the right customer at the right time in the right condition, transport logistics cannot be overlooked as a critical part of the value chain.

If our goal on the flexis AG blog to educate our readers about the pressing issues in global manufacturing and supply chain management, then today’s entry is right on par with that mission. Transport logistics, though a critical element to a manufacturing supply chain management strategy, is perhaps one of the least discussed aspects of SCM. While an underutilized element of administering a successful value chain, transport logistics (or the manner in which companies move finished products from the production room floor to the customer’s door) is the last crucial link in fulfilling customer expectations and ensuring production programs are executed to their fullest extent.

It’s somewhat difficult to understand why transport logistics often gets lost in the fray of global supply chain management. Perhaps it’s because more emphasis is placed on operations at earlier stages in the value chain such as planning and procurement. Or perhaps it’s because the facilitating of effective production programs is often at the forefront of the minds of planners and managers. Either way, transport logistics, though often neglected, can either be a significant boon or detriment to how effective a manufacturing company conducts itself.

One of the greatest challenges manufacturing companies face in today’s global, competitive landscape is generating and sustaining growth of revenue. Because the manufacturing industry is variant-rich and often reliant on complex partner networks spread across the globe, manufacturing companies often operate in a ‘lean and mean’ context where profits can be fairly small and margins for error in terms of investment and return are razor thin. As a result, companies must deploy a number of concepts, platforms, and campaigns to help bolster revenue, optimize processes, and eliminate instances of waste or redundancy.

There’s one thing that pops to mind when you ask people about artificial intelligence in the manufacturing industry, particularly in the automotive landscape: Autonomous or driver-assisted cars. And the future of driverless vehicles may in fact arrive sooner than many people think, there’s actually more concrete contexts for artificial intelligence (AI) in today’s manufacturing sphere. AI has the potential to impact the automotive manufacturing supply chain in equally profound and interesting ways beyond the idea of the driverless car. In fact, AI has the potential to be a truly disruptive force in the way automotive manufacturing companies produce vehicles and how the consumer interacts with the end product. 

With AI as an increasingly common technology platform, the manufacturing industry — automotive sector in particular — is set to experience significant changes in the coming years in terms of production and supply chain management. As vehicles become more integrated, individualized, and complex, manufacturing companies will have to leverage more lean methods of production and supply chain logistics to keep pace with the demands of such a variant-rich industry.