Operational transport planning in today’s automotive supply chain is like that one junk drawer or cupboard everyone has in their house. It’s a chaotic collection of seemingly unrelated items that you often forget about until a certain item goes missing. The drawer or cupboard lacks any kind of organization and you often have little idea as to the volume, quantity, and nature of items inside. Similarly, operational transport planning and its lack of transparency and visibility into the overall supply situation means increases in unnecessary costs and resources, missing or lost parts and deliveries, and more complex logistics that detract from the clarity necessary to leverage lean supply chain management principles.
In short, operational transport planning can be a significant stumbling block for OEMs and Suppliers in transporting, monitoring, and reviewing how their parts move from production facilities to the customer, both in terms of speed and condition.
But much like a closet or cupboard organizer, a tactical transport planning strategy provides planners with a clear, organized method of transport planning and management where OEMs can create, monitor, and adjust transportation platforms and systems based on real-time data analysis and customer demand. These capabilities provide planners with the agility and transparency necessary to leverage cost-effective decisions about how to best move and monitor parts from one side of the globe to the other.
With this in mind, here are 4 facts about tactical transport planning, its impact on the global supply stream, and the benefits companies can experience by incorporating this method of planning into their supply management strategy.
Fact #1: The primary task of tactical transport planning is to define the parameters, conditions, and variables of operational transport planning. Tactical transport planning is perhaps the most effective strategy whereby planners and managers can direct, monitor, and adjust the allocation of part and part families within the value stream to help determine and ensure delivery frequency and reliability. By taking into account a number of critical considerations such as the type of transportation, the delivery route, and frequency with which materials and component parts are collected and distributed. With these conditions accounted for, planners and managers can create systems of classifications and an organizational architecture to ensure planned production programs are successful via on-time, reliable delivery.
Fact #2: Tactical transport planning is not simply a one-time operation; rather, tactical transport planning is a continuous, cyclical process that needs to be implemented on a frequent basis for optimal results. Perhaps the biggest misconception about tactical transport planning is that planners and managers only need to address the issue when problems within the supply network occur - and that once the disruption is corrected, there’s no need to review operational transport planning on any kind of regular basis. Yet tactical transport planning needs to be deployed, reviewed, and adjusted on a monthly or even weekly basis for each part and part family to ensure allocated quantities and frequencies still meet the demands of the larger supply situation. As we’ve discussed in previous blog entries, today’s automotive supply network is variant-rich and ever-changing. Production demands shift often when parts are in transit, so the ability to review and adjust a company’s tactical transport planning platform on a continuous basis is key in leveraging the great competitive advantages possible.
Fact #3: Without a robust tactical transport planning strategy in place, transportation and supply disruptions or bottlenecks have the potential to occur again on larger and larger scales, which is damaging for OEMs in competing in a global automotive landscape. As we discussed a few moments ago, tactical transport planning is not usually carried out regularly or systematically, but only when problems arise. These problem areas are identified and managed, however, little or no oversight is deployed to ensure the same problem doesn’t arise in the future, resulting in wasted costs and resources. Troubleshooting disruptions or bottlenecks on a case-by-case basis is often a very time-consuming process where companies without intelligent demand planning systems often rely on spreadsheets and other manual data entry processes to analyze and correct bottlenecks or disruptions. A robust tactical planning strategy that is executed frequently and regularly significantly reduces the time and resources planners must allocate in spot-correcting production and supply issues.
Fact #4: Tactical transport planning accounts for a wide range of transportation variables and parameters in helping planners create effective, sustainable transportation platforms. Based on demand and the best method of transport - LTL, FTL, rail, or other modes - tactical transport planning allows planners to account for the weight, volume, size, orientation, and status of parts or part families to optimize transportation and leverage lean principles in ensuring products arrive on time and in good order. In addition, part lot sizes and placement within containers can also be considered to further ensure the right parts are at the right place at the right time within the value stream. Pre-determined criteria and classifications based on part families help planners achieve greater visibility and transparency into a company’s holistic transportation scheme to make any necessary modifications in service of a more reliable, agile transportation platform.