To truly understand the holistic benefits of real-time information in today’s automotive supply chain, let’s quickly look at the concept of instant replay in sports. Instant replay allows referees and fans to rewatch any given play sheer seconds after it’s taken place, rather than after the game is completed via traditional game film. The ability to instantly review each moment of the game as it unfolds helps determine if the call was correct, which team might have violated game rules, and whether any penalties should be assessed to either team for potential violations. This results in more accurate policing of the rules, better insight into each team’s strategy or strength and weaknesses, and provides a more enjoyable viewing experience for fans who can watch with confidence in how the game is being called by the officials.
The same is true for real-time information sourcing in the automotive supply chain, particularly with such technologies and concepts as Big Data, cloud computing, and Industry 4.0. Because today’s supply chain is a global concern where rules or restraints on demand planning, production programs, transportation management, and customer relations can change quickly and without much notice, OEMs must be more agile than ever before to adapt to these modifications and continue smooth, efficient workflows.
We’ve talked in great deal in previous posts about the need for end-to-end visibility (E2E) across each touch point of the value chain to ensure companies are operating at maximum efficiency. The ability to view and analyze data in the moment — the moment it’s being collected — is a value-added proposition for manufacturers in leveraging E2E visibility and transparency.
But what are some of the concrete benefits? What competitive advantages can OEMs expect by deploying real-time information and data sourcing? Here are four benefits of real-time information in today’s automotive supply stream.
Insight into Demand
Real-time information not only allows OEMs to view up-to-the-minute needs from customers around the world, but it also helps them plan or combat any potential slowdowns or bottlenecks across the supply stream. In addition, real-time windows into overall demand can help companies identify trends or fluctuations in the need for component parts and adjust production programs or facility allocations before these fluctuations significantly impact productivity. For example, an OEM in Europe, through the use of real-time information, can recognize a downward trend in demand for parts with a customer in Mexico and reallocate materials and resources to adapt to that trend rather keeping production at current levels with the risk of severe overages in inventory or supply.
Greater Planning Capabilities
On a similar note as insight into demand, real-time information fosters more accurate, detailed planning capabilities in both the short and mid-term. Because insights into current demand can be viewed and analyzed as they unfold, planners and managers can then use these insights to create better production plans and projects in the near future based on current trend lines. As we’ve discussed in previous entries, better overall planning strategies reverberate through all touch points of the supply stream from transportation management to customer relations. This is why greater planning capability is one of the most important competitive advantages via real-time information platforms.
Better Reporting and Data Analysis Potential
With real-time information gathering, gone are the days when planners and managers had to wait until the end of the month or quarter to review data critical to a manufacturer’s productivity and efficiency. Instead, real-time information allows planners and managers to analyze up-to-the-minute data as it becomes available and distribute this data in a cross-organizational way to promote better communication and collaboration. In addition, this real-time information stems from the use of integrated, intelligent solutions and platforms, which eliminates the need for spreadsheets and other manual methods of data entry and management.
Enhanced Customer Experience
If a manufacturer has the ability to review the current state of their supply situation as it’s unfolding, make adjustments to strategies and planning platforms in the moment, and react to sudden changes in the supply stream at a moment’s notice, it stands to reason this will result in enhanced customer relations and satisfaction. Real-time information provides companies with the ability to create more accurate production timetables and delivery schedules, which in turn drives a more positive outcome when it comes to acquiring and retaining customers.
Imagine a sporting event in today’s world without the potential for instant replay. The game would most likely be bogged down as officials struggled to make the right calls, and the outcomes of games could be significantly altered by inaccurate rulings on the field. The same is true for OEMs lacking the capability of real-time information. Without real-time information sourcing, companies will be forced to combat a greater wealth of productivity-based issues like bottlenecks and disruptions, which can be the deathknell in today’s fast-paced, global market.