Recently I upgraded to a new smartphone because the operating system on my old phone was no longer supported by my phone carrier, but also because many of apps and other integrations stopped functioning properly on my outdated system. These apps had undergone significant updates and evolutions, and my operating system could no longer keep up.
As a result, many of these apps would crash or experience severe glitches when I attempted to use them because of the static nature of my operating system and the lack of computing power to cut through the complexities of these advanced apps and programs.
A similar problem exists in the automotive manufacturing and supply chain industry when it comes to static versus automated planning systems.
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. Planners and managers who continue to deploy these static strategies often lack the visibility necessary to make cost-effective, productivity-based decisions about planned production, inventory, transportation, and other factors that can significantly impact all points of the value chain.
In a sense, static planning principles are similar to my previous smartphone situation in the sense that static planning was my old smartphone in that it lacked the tools to engage on a meaningful, productive level with new technologies and solutions for efficient, cost-effective functionality.
On the other hand, automated planning systems, with their enhanced responsiveness and capacity to provide complete visibility and agility all the way down the supply stream, are just the ticket for planners and managers to succeed in today’s complex manufacturing and supply network.
The Problems with Static Planning
Even in today’s connected, increasingly digitized world, too many supply planners and managers still rely on spreadsheet-based planning as the basis for production and supply stream strategies. The reasons for this ranges from comfort in current processes of key personnel to the fear of increased costs of automated planning to reliance on familiar modes of operation. But no matter the reason, static planning principles are immensely problematic for companies in variant-rich industries looking to compete on a global level.
First, static planning creates communication and data-sharing silos across all points of the supply chain. Because static planning, more often than not, exists in a vacuum - spreadsheets and other methods are not easily distributable to the right personnel in an expedient manner - it’s difficult to foster effective communication and collaboration about planned production programs, production capacity at various facilities, management of containers and supply, inventory and more. Without an automated, centralized hub of actionable data, key performance indicators cannot be reviewed at various touch points of the value chain, which can result in poor supply management and the potential for bottlenecks.
Second, static planning is a time-consuming task that can detract a planner or manager from higher-priority concerns within the supply chain. The time and resources needed to manually enter data points is a value-lost proposition and can often result in an increase in human error - incorrectly entered and processed data about the production capacity of a facility or current inventory in a given warehouse can have a ripple effect that induces severe disruptions at the production and supply level.
Lastly, the ability to analyze data and execute production decisions and strategy in real-time is a key driver in leveraging the value-added proposition of lean supply chain principles. Static planning by its very nature lacks the capability to provide companies with the instantaneous insight and end-to-end (E2E) visibility required to execute sound supply decisions. In addition, what reviewable data provided via static planning strategies is often not available until weeks or months after production and is difficult to utilize in any manner of collaborative fashion across multiple channels.
The Move to Automated Planning
Now that we understand the liabilities of static planning, let’s look at the concept and benefits of automated planning. Again, think about my smartphone experience: With a new operating system, my smartphone is now able to run and communicate with multiple apps at once without freezing, experiencing slow downs, or crashing altogether. This allows me to complete more complex tasks and navigate the nuances and intricacies of some of today’s most exciting and valuable apps.
The same can be said for automated planning software. Of course, applying an automated planning software solution does require a holistic reimagining of your planning process, which includes:
- Establishing a centralized hub for production data.
- Transferring planning data into this centralized system.
- Direct linking of planning data with other existing software solutions - i.e. other planning, inventory, or transportation management systems.
- Transferring planning functions and tasks into the centralized database for distribution across the value chain.
However, once companies make this transition, the benefits of automated planning systems are numerous and offer manufacturers and suppliers a stronger foothold in the automotive industry and insight into their supply practices. Some of the benefits include:
- The ability for multiple users to work simultaneously in the centralized planning system which can engender enhanced collaboration and communication around key data points and performance indicators.
- The integration of existing decentralized planning solutions into centralized systems in order to create a more robust, intelligent solution capable of handling short, mid, and long-term production and supply planning strategies - solutions such as order-slotting, Plan for Every Part (PFEP), and others.
- The capacity to run ‘what-if’ scenarios and other modes of simulations to create accurate, detailed forecasts that can assist with future production planning, inventory levels, warehousing, and transportation concerns.