Cracking Emerging Markets, Part 2: Getting the Job Done
Nick Ostdick - September 13, 2016
In the first part of our series on expanding into emerging markets, we discussed the challenges and opportunities OEMs experience when establishing production hubs in new regions across the globe. We also looked at a number of aspects of expansion to help highlight what OEMs need to consider as they create more dynamic, varied supply networks capable of responding to the pressures and complexities of a global supply stream.
But what happens when OEMs actually flip the switch on production and actually begin manufacturing products? How do they successfully integrate new production lines into their existing supply networks? What tools should they leverage to ensure entering these new and emerging markets creates a sustainable, growth-oriented business model?
In today’s entry, we’ll look at a handful of principles OEMs must deploy in order to successfully get the job done when it comes to operating and managing production in emerging markets.
Through intelligent software solutions for accurate planning, enhanced production visibility, and greater levels of reporting and analytics, companies can position themselves to integrate new supply and production hubs with existing facilities, but also create a significant footprint in new markets that will be a value-added proposition to their overall supply chain management architecture.
Intelligent Planning Solutions
One could argue an efficient, lean production and supply stream lives and dies by the accuracy of demand planning and how planners and managers implement planning strategies and solutions. If the major tenant of supply chain logistics is to provide the right amount of products at the right time in the right place, it makes sense manufacturers in emerging markets must leverage a number of intelligent, integrated planning solutions to eliminate the guesswork around demand planning. While certainly true for all companies in the automotive supply stream, static planning operations - usually relegated to Excel spreadsheets or some other mode of manual data input - are no longer powerful enough to handle the intricacies and complexities of production planning on a global level. Rather, automated planning systems, with their enhanced responsiveness and capacity to provide complete visibility and agility all the way down the supply stream, should be priority one for lean, streamlined planning.
Intelligent or automated planning solutions come in many forms, from BOM management, Plan for Every Part, and Every Part Every Interval. Through establishing a centralized hub for data storage and sharing, gaming out ‘what-if’ scenarios,’ and creating forecasting models, these platforms allow companies to optimize inventory for planned production programs to ensure timely production and delivery. Without deploying intelligent planning solutions, OEMs can find themselves essentially stumbling around in the dark as they attempt to manage a demand planning strategy.
Enhanced Production Visibility
End-to-end (E2E) visibility. It should be the mantra of the automotive manufacturing and supply industry. The ability to view the supply chain holistically and in great detail is perhaps the most crucial driver in allocating resources and determining appropriate production levels for any given facility or hub. This is especially true when managing complex production networks with lines operating in disparate parts of the world. This is where planners and managers need powerful solutions to gain real-time insight into the current supply situation in order to combat potential disruptions or bottlenecks, which can be particularly problematic when operating in emerging markets where resources, materials, and labor can be unstable factors in production.
In order to foster E2E visibility for the most efficient, streamlined production cycles, OEMs need solutions like job management systems, turbo transparency, and production control solutions in order to make good on the detailed demand planning and forecasting strategies created via intelligent planning. These systems offer OEMs a roadmap for efficiency and accuracy in scheduling production programs, determining accurate delivery dates, and leveraging best practices for transportation and distribution in order to ensure the customer receives the product on-time and in good order.
Detailed Reporting & Analytics
We’ve discussed in previous entries the importance of detailed, real-time reporting and analytics software in order to help manufacturers review performance, meet production benchmarks, and game out scenarios for future production based on defined goals. But how does OEMs deploy such strategies? And what kind of reporting solutions should companies in emerging markets leverage in order to achieve these insights? Of course platforms like Big Data and cloud computing are key drivers in enhanced reporting capabilities, but planners and managers should also deploy less macro-based solutions such as predictive analytics-based strategies which simulate complex ‘what-if’ scenarios to test the agility and responsiveness of a company’s supply architecture.
Let’s remember the automotive supply network is one with a certain amount of volatility and complexity built into it - as is the case with any variant rich industries in which success depends on a global value chain comprised of various partners and variables subject to the nuances of the regions in which they operate. With this in mind, imagine if an OEM could access real-time ordering and sales data and the associated costs by region and product type at any given time. Then, based on this and other external data, this OEM’s planners could create and execute a strategy of dynamic, responsive production schedules, inventory management, and transportation and yard management to best meet customer and market demands. This is where predictive analytics comes into play and provides planners the insight and visibility to foster supply streams like the one in this example capable of enhanced levels of responsiveness.
As you can see, operating a lean supply network in an emerging market is a complicated process. In a variant-rich industry like the automotive sector, companies must constantly be juggling a multitude of operations in order to ensure smooth production - and this is even more the case in emerging markets. Check back for the third part in our emerging market series where we’ll discuss what OEMs stand to gain from operating in emerging markets and how they can best position themselves for growth and opportunity.
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