Going Online: Why Companies Should Embrace Digitized Manufacturing
Nick Ostdick - June 28, 2016
Call it a revolution. Call it a renaissance. Call it a reimagination. Call it whatever you’d like, but it’s undeniable how digitization has truly overhauled nearly every aspect of the automotive value chain. From planning to distribution, sales to reporting, digital technology has streamlined and made more efficient the way manufacturers receive and process orders, plan production programs for those orders, and deliver the final product to customers. And this enhanced efficiency has resulted in more cost-effective and productive business models across a company’s entire value stream.
But until now, there has been one touch point that’s been slow to adopt digitization: manufacturing.
However, with the proliferation of digital technology and advancements as to how it can be applied to the manufacturing link of the supply chain, OEMs now have the tools to implement digital elements into their production processes and facilities in order to reap the same benefits other portions of the value chain have been experiencing for years.
Leaner principles and practices. Greater visibility and transparency. Enhanced agility. Increased productivity. These may seem like buzzwords, but in fact they’re real value propositions manufacturers can achieve by leveraging the digitization of production and the incorporation of intelligent systems and software into manufacturing cycles.
Why Bother with Digital Manufacturing?
It might seem strange that OEMs and other automotive manufacturers have been somewhat slow to embrace digital manufacturing, especially given the value added in all other production and supply arenas where digital tech has been integrated - demand capacity planning, yard and dock management, transportation management, inventory management, sales, and data analysis and reporting. Overhauling a company’s entire production platform and strategy - which can include multiple facilities in disparate locations across the globe - can be a daunting process, but the benefits of implementing digital tech into a manufacturing scheme far outweigh the cost, particularly in variant-rich production streams where shorter lead times, fewer changeovers, and enhanced visibility are key to growth and profitability.
With this in mind, here’s a few reasons why companies should bother - and strive to incorporate - digital manufacturing processes.
1). A greater understanding of demand planning procedures. Planning and the ability to create accurate demand planning programs and forecasts depends largely upon the current situation of at-hand production constraints and capabilities - current volume of orders, sequencing of these orders, inventory, facility capacity, and the potential for breakdowns or bottlenecks. Digitized manufacturing allows planners to see simultaneously a local and global view of production streams in order to leverage the best possible decisions when it comes to scheduling these streams and allocating resources to fulfill orders in conjunction with expected delivery dates. In addition, digital manufacturing solutions allow planners to alter, modify, or adjust production in real-time based on new rules and constraints encountered during the production cycle.
2). Merging planning and execution. We discussed in a recent entry how merging demand planning and execution into one action - or at least one mindset - carries a significant value when shortening lead times, increasing productivity of production cycles, and providing greater visibility in the production stream to combat disruptions and breakdowns. Digitizing manufacturing processes such as Plan for Every Part and Every Part Every Interval, order-slotting, BOM explosion with Part Availability and Monitoring, and Sequencing allows planners to take actions based on real-time data and reporting and allows for replanning both in the short and mid-term based on changes to current conditions and restrictions. Planners also have the capability to leverage production reassignments - such as build-to-order to build-to-stock or vice-versa - based on customer needs and production constraints while at the same time maintaining both a global and local view of the production stream for greater efficiency and agility.
3). Manufacturing philosophy is shifting from value chain production to entire value stream networks. As the global supply chain becomes complex and interconnected, so goes the culture of production. No longer is production simply relegated to what happens on the facility floor - in today’s landscape production is now part of a larger value network with ripple effects and consequences across all points of the value stream. The increased movement of parts and production between various hubs and the consolidation of production facilities and manufacturing networks under one umbrella makes it increasingly critical for communication and collaboration between planned programs - actions that can only take place with digitized production systems and software. As opposed to several different tributaries all feeding into one massive river, today’s production environment is essentially an ocean of information, processes, and outcomes whereby disparate cycles and hubs must function synergistically for maximum productivity and growth.
Is Digital Manufacturing for Real?
The short answer is, of course, yes - digital manufacturing and the complete digitization of manufacturing processes and platforms is here and here to stay, and OEMs who lag in leveraging this new direction in production may find themselves struggling to compete in today’s complex, global marketplace. But beyond the notion of whether digital manufacturing is ‘real’ or not, the value proposition it provides to manufacturers rivals that of other digital movements across the value stream - planning, production, distribution, and transportation. With all of these various touch-points operating via digital means, it only makes sense for companies to incorporate digital production solutions to keep pace with other operational platforms within their organization.
Think of it this way: Does it make sense to have a smartphone without the ability to access the internet or utilize mobile apps? The same philosophy goes for digitizing manufacturing for companies to remain relevant and prosperous in the short to long-term future.