As industrial businesses in Europe slowly start to reopen, we’re guessing that a lot of businesses are having the same realization all at once: the old way of doing things isn’t necessarily going to cut it anymore. With production planning and scheduling, for instance, you might have been able to manage bills of materials from a consistent buffer stock of raw materials sourced from the same one or two suppliers for years. This would have resulted in stable, predictable workflows, but it also would have left you vulnerable to disruptions one rung up in the supply chain.
Though static and recurring plans like these have been increasingly risky from a supply chain perspective since the advent of digitization, they’re especially so now. Why? Because not everyone is going to be ramping up their manufacturing and logistics operations at the same rate (so say nothing of the rate at which demand will ramp up), and production planners will have to become more flexible and proactive in how they source raw goods and utilize capacity to meet demand. The question is: how can you best optimize your production plans for this new environment?
1. Improve Your Forecasts
First things first: in order to create the optimal production plan, especially in a volatile supply chain, you’re going to need data-driven, highly-visible demand and parts forecasts. In the past, you might have been able to eke by with just a pen and paper or an Excel spreadsheet, but to deal with the complexity of the modern supply chain, that kind of approach is no longer an option. Instead, you need to be able to gather data from every relevant touchpoint on the supply chain in order to create rolling forecasts based on advanced analytics. This is the type of process that might be powered most effectively by an S&OP (sales and operations planning) solution—particularly one that gives you the ability to instantly visualize different planning scenarios and horizons based on specified restrictions and other parameters. At the end of the day, the accuracy of your forecasts—combined with your ability to create planned production programs that match up with those forecasts—will determine your ability to optimize successfully.
2. Standardize Your Production Planning and Scheduling
If you’re using S&OP software, you’re probably also utilizing an overarching S&OP process to create alignment between demand expectations and capacity utilization. This can be a real help, in large part because it formalizes the balancing act that’s forever taking place between demand and capacity. As it happens, this kind of formalization can also be a boon to your production planning and scheduling processes. This starts with process mapping to ensure that you know not just how long each stage of production actually takes, but how long it takes to move raw goods from inventory onto the production floor, and then how long it takes to get finished products off the production lines and into containers or trucks for shipping. Once these parameters are established effectively, your advanced planning and scheduling solution can actually provide you with the insight you need to minimize downtime and maximize throughput.
3. Utilize Digital Twins and Prescriptive Analytics
With a strong forecast in place and high visibility into the actual production floor operations, you’re on track to create solid production plans. At this stage in the process, however, you should also be considering any tweaks and adjustments that might make the whole process more efficient. This can be anything from adjusting the arrangement of stations in your job shop to stacking containers differently in a particular yard to arranging for planned machine downtime to stave off costly breakdowns. And how do you figure out which of those options will actually be more optimal? Again, you can turn to advanced analytics—this time prescriptive, rather than predictive. Similar technology can also help you power digital twins, which are digitized representations of your factory floor or other parts of your value chain. With these digital twins, you can run any number of sandbox simulations and visualize the expected results. In doing so, you can get a sense of the range of possibilities that any particular decision might yield, putting you in a position to choose the best options even in rapidly unfolding situations.
4. Integrate Your Supply Chain
We mentioned above that the supply chain is going to be slow and tenuous as it restarts, and it’s easy to imagine the impact that could have on your ability to consistently have the right materials on hand for a given production run. Sure, you may have optimized your expected throughput based on your advanced analytics, but if your suppliers are having issues on their end and you can’t get a necessary shipment of raw materials in time, you’re production run will still be delayed—leading to reduced throughput that could easily eat into your margins. In order to truly optimize your production plans, then, you have to have some way to reduce the likelihood of this particular kind of disruption. The best way to do so? Supply chain integration. Now more than ever, there’s a tremendous amount of value to be gained from integrating your IT ecosystem with that of your suppliers, in order to share data in real time. With this kind of integration in place, you can use your supply chain partners’ data to improve your own predictions and optimizations.
5. Aspire to Turbo Transparency
Hopefully it’s obvious from the preceding that transparency is going to be of the utmost importance going forward. In order to thrive under these new and emerging conditions, planners are going to have to ditch the spreadsheets and start relying on real-time planning modules that give an overview of the entire supply chain. This means getting visibility into transport times, parts availability, and other information, such that you can create a rolling planning horizon for expected demand and capacity. This way, when there are delays you can be as responsive as possible, adjusting your production plans to maintain value and keep things moving—no matter what unexpected event might occur.