Are You Asking the Right Questions for Supply Chain Optimization?
Nancy Sarpolis - May 16, 2023
Everyone seems to be looking for answers when it comes to supply chain optimization. But finding digital solutions to transform operations for improved efficiency is all about asking the right questions.
“It’s one thing to know where you aspire to be, and another to understand how to get there,” according to Harvard Business Week. “While the COVID-19 pandemic has made digital transformation an even more urgent need, companies must also morph iteratively to keep up with the speed of emerging technologies. It’s a process of continuous learning and pivoting to adapt to an evolving competitive landscape.”
Knowing the right questions to ask can lead to a deeper, more insightful discussion about digital technologies that can transform and optimize an organization’s supply chain. Here are a few conversation starters:
What’s the organization’s current state?
Make a candid assessment about the company’s existing manufacturing data and systems. Is data trapped inside spreadsheets, binders or file cabinets—or locked away inside workers’ institutional knowledge? Are the company’s operations a tangle of legacy or point solutions that don’t talk to each other?
For data to fuel an organization’s business initiatives, it must be readily available, of high quality and relevant. Performing data hygiene is an important first step because it helps the organization identify erroneous or incomplete data, reduces redundancies, and fixes or eliminates incorrect data. In some cases, it might mean standardizing so numerical data use the same unit of measurement—such as converting miles to kilometers.
Once information is gathered from shop floor devices and other systems, it still needs to be integrated. According to McKinsey, prioritization should be made with an eye toward cleansing the data that fuel the most valuable use cases. Clean data from IoT devices, RFID chips and other sources, for example, can be integrated into advanced planning and scheduling solutions. Importing large amounts of data from your infrastructure into a new software environment must be done in such a way that it can be extracted from multiple supply chain touchpoints quickly and easily anywhere on the supply chain.
Given the amount of data generated each day by machines, people and processes, it’s nearly impossible these days for one individual—or even a group of individuals—to manage, let alone synthesize. Only once your whole network has been effectively digitized can you begin to use advanced analytics and other technologies to optimize these structures for modern planning flows.
How should an organization prioritize its digital transformation investments?
Companies searching for the right technologies to optimize production often have limited resources and a myriad of choices and solutions. One of KPMG’s key 2023 actions for supply chains is prioritizing technology investments in supply chain planning capabilities, and end-to-end visibility enabled by real-time analytics, as these can help companies maintain operational stability.
“Picking the wrong operations element or business target for optimization diverts finite resources from what truly matters and represents the biggest risk of failure,” says McKinsey. “First, the overall decision space must be so large that an individual planner can’t explore and understand all the possibilities at once; second, the quality of outcomes must be objectively measured and assessed according to a well-defined and accepted target; and third, the potential for improvement must be measurable and ideally quantifiable.”
How can companies avoid blind spots in their supply chains?
Industry 4.0 solutions that optimize the planning, scheduling, and monitoring of the whole supply chain—from distribution to production to transportation—are becoming must-haves for supply chain planners. However, a common framework is essential for ensuring a cohesive process without data silos. Solutions that network together in a flexible, modular way give planners the support they need to better understand what is happening under the hood of the organization. For example, digital technologies that integrate transportation, Sales and Operations Planning (S&OP), Advanced Planning Solutions (APS), and Supply Chain Management (logistics) planning can continuously adjust planning across supply chain processes from sourcing through production and final distribution.
“Organizations need to enable a consistent flow of information among stakeholders,” says McKinsey. “Integrated supply chain planning tools already bring together information from multiple systems and business functions, creating transparency and empowering decision makers while enabling analytics tools. Optimization tools and processes can be added to improve decision making.”
Of course, these aren’t the only questions organizations need to ask in their digital transformation journey—but they’re a good first step in the dialogue that will lead to the successful optimization of production and better business results.
If you want to learn more get your Guide to Industry 4.0
In this Guide you will learn:
Key facts about Industry 4.0
Benefits of implementing the Industry 4.0 framework
How your company can move to the future of the supply chain industry
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- How to improve your Supply Chain Management: The Power of Control Towers
- Optimizing Human Resource Scheduling in Manufacturing: A Technological Approach
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