Think about the concept of an air traffic control tower: a centralized location where a multitude of aircraft are monitored, directed, and communicated with during both takeoff and landing. Those working in the control tower are responsible for coordinating and managing which planes utilize which runways and when, as well as overseeing when and where flights move while on the ground - from the gate to the taxiway and so on. It’s a very complex process involving multiple air traffic controllers working in harmony to ensure flights depart and arrive safely and on-schedule to avoid delays and backups both on the ground and in the air.
Now, think about the task OEMs have in managing multiple production sites - or a network of production facilities in disparate locations.
To avoid bottlenecks, production stoppages, and ensure cost-efficient production strategies across what are often expansive networks - many of which are in new and emerging markets with varied and unique production challenges - manufacturers have to juggle a wealth of production and supply elements from planning to inventory to transportation and distribution.
Much like working in a control tower, production managers and planners have to consider and coordinate a multitude of factors to successfully ensure production moves safely and on-schedule. This process transformation and overall standardization of production and supply chain management strategies allows OEMs to act their own control tower and successfully manage a network of production sites and facilities in today's increasingly complex global supply stream.
With that in mind, here are 4 strategies OEMs can leverage to manage varied production networks and create lean, responsive value chains.
Optimize Your Inventory
Inventory optimization (IO) is a critical driver in production and supply visibility and transparency when looking at a single production site let alone an entire network. IO is the process by which planners and managers ensure the right materials are in the right place at the right time to leverage the best in production capabilities and efficiency. Lean supply chain principles are all about eliminating as much waste as possible across all points of the supply stream, and inventory overages, shortages, or disruptions are a big part of that reduction in wasted or misallocated resources. This of course is crucial when coordinating supply and inventory between multiple facilities with multiple suppliers, especially in markets where certain supplies may be harder to attain than others.
IO also fosters enhanced communication across all touch points of the supply stream - which, in this case, includes each production site in the network. With such a diverse production network, the left hand has to know what the right hand is doing, and IO allows for real-time, instantaneous communication, coordination, and sharing of various data points within the network. This single source of data allows those within the network to make accurate, informed decisions to increase efficiencies and avoid production disruptions or bottlenecks.
To keep with our control tower metaphor, no two airline flights are the same. Final destination, number of passengers, flight time, aircraft capacity, fuel costs, and departure and arrival schedules all dictate how and when the control tower decides to move aircraft around while on the ground or in the air. The same can be said for how planners and managers should approach demand capacity planning strategy and solutions for each production site within the network. Facility capacity, inventory, product lifecycles, volume of orders, and production sequencing all require OEMs to leverage unique, specified planning solutions for each production site to combat the possibility of bottlenecks or breakdowns in the production stream.
Companies can create and execute individualized productions and programs by utilizing a number of intelligent planning solutions such as BOM management, Plan for Every Part, and Every Part Every Interval, each of which are designed to cut through the complexities of production management by providing planners a step-by-step view of planned production programs - including order status and fulfillment, inventory and supply, the right parts in the right place at the right time, and overall capacity to maintain delivery schedules.
Eliminate Functional Silos
The ramifications of functional silos in today’s global supply chain market are numerous and wide-ranging. In a time when supply methods need to be visible and agile to even keep pace with competition, functional silos can hamper baseline efforts to remain profitable and competitive - and this is even more true when it comes to managing a complex production network. Fully integrated supply chain management software solutions are a good first step to eliminate silos across the network and providing avenues for real-time reporting, in-depth analytics, and ease of communication across all supply points.
However, even with the implementation of such software, functional silos can persist. To combat this, companies must leverage a holistic reimagination of the entire production and supply chain as one entity - each production site, from planning to production to freight, as one function within the supply stream. This type of rethinking will help expose pain points throughout the entire value chain and identify areas where more cost-effective and productivity-minded decisions can be executed to create more lean production cycles.
Put the Data to Work
Even with the proliferation of cloud computing, Big Data, and Industry 4.0, it’s easy for OEMs to overlook massive data pools and analytics as a way to help refine processes and determine value propositions for short and mid-term planning. This kind of oversight is even easier when dealing with multiple production sites across all corners of the globe, particularly in variant-rich production streams. But OEMs need to focus on reviewing, analyzing, and putting this data to work to streamline processes and make any necessary course corrections in regards to production levels and capacities.
If an OEM operates six different production sites across the world, then they have access to six different pools of data representing a myriad of different manufacturing environments and schemes. As we said earlier, no two production sites are the same and they shouldn’t be viewed as such, but at the same time planners and managers can gleam great insight into production strategies by reviewing, sharing, comparing, and collaborating on data from each individual production facility. This type of collaboration can result in more creative, cost-effective methodologies OEMs can leverage into company-wide best practices to ensure growth and competitiveness in today’s market.
As we’ve discussed before, the ultimate endgame for efficient, productive supply chain management is visibility - E2E visibility in which planners and managers have the data and information necessary to create, implement, and modify strategies that will ensure lean production and fluid movement of supply. But as markets emerge, production streams become more varied, and supply custody turns more and more complex, OEMs increasingly must leverage solutions to maintain transparency into the innerworkings of, quite simply, where and how their parts and products move and when. Process transformation of this sort, especially in managing multiple production sites or facilities, is the answer for companies looking for methods of cutting through complexity, enhancing visibility, and better understanding how each link of the production and supply stream works with the next.