Let’s say you’re a freelance writer. You’re trying to grow out your list of clients and get some more work, but you don’t want to commit to doing more work than you can actually handle. So, you sit down to analyze your previous work habits. How many words did you write per hour on average? Did the number of words vary by project type or industry? How many hours are you willing to work each week? How much overtime can you work before you become burned out? With these considerations, you’re able to figure out roughly how much demand you can meet. In this way, you optimize your earning potential and utilize your work hours in the most efficient way.
Topics: Demand Capacity Planning
In baseball, the pitcher and the catcher must communicate via signs in order to implement a strategy to get the batter out. Depending on the strategy, the various fielders may need to position themselves closer to or farther away from home plate (if the pitcher is trying to induce a ground ball out or a fly ball out, for instance), which means that the strategy must be agreed upon beforehand and disseminated amongst the entire squad—not just the pitcher and the catcher. Picture the alternative: the pitcher decides on his own what approach to take, and the catcher is stuck trying to catch whatever is thrown at him without any advanced notice; meanwhile, the fielders don’t know what to expect, so they’re not able to position themselves appropriately. As a result, a batted ball is likely to result in chaos.
Let’s say you’re trying to optimize your morning commute. Each day, you leave your house in the morning and walk to the train station, stopping by one of a few nearby coffee shops on the way to get your requisite dose of caffeine. This system works okay as it is, but because the coffee shops are sometimes crowded and the trains are sometimes late there is an overly-high level of variability in the length of time it takes to get from your front door to your office—meaning that you sometimes arrive earlier or later than you intended. To combat this variability, you download an app that gives you real-time notifications about train arrival times (so that you can adjust accordingly if a particular train is running late) and another app that approximates how crowded any given coffee shop is based on online check-ins. In this way, you can avoid the most crowded coffee shops and try to work around late trains, leading to a more stable commute time.
In 1963 the National Council of Physical Distribution Management was created to help give visibility to the emerging field of supply chain management. In the following decades, records keeping and other traditionally manual processes would become the province of newly-emerging computer technology, leading to significant changes in the industry. In the ‘80s, the council changed its name to the Council of Logistics Management to reflect the industry’s increasingly nuanced view of the complex process of sourcing raw materials for production and distributing finished products to customers. Supply chain management as a field went through plenty of change during that span, including the continued rise of computers as a tool, just as it's going through big changes now with the advent of Industry 4.0. Below, you’ll find our predictions for what might change about supply chain management in the coming year.
Let’s say you have to schedule a medium-sized meeting with some of your coworkers. If you’re a traditionalist who likes to do this kind of scheduling by hand, you’ll first need to brainstorm a list of which people (i.e. which creative and organizational resources) will need to be in attendance. Then, you’ll have to pick a time that works for you, and check with each person on the list to see if that time also works with their schedules. In the extremely likely event that the time does not work for everyone, you’ll need a master list of everyone’s availabilities so that you can find a time slot that works for everyone. Or, if not everyone, then at least the largest possible number of vital attendees.
If you sat down to compare the experience of taking a cross country road trip now vs. thirty years ago, what might come to mind? Probably, your first thought would be about how the rise of GPS systems (and, relatedly, smartphones) had made navigation much easier. Gone are the days when drivers need to purchase physical maps and chart their courses by hand. You might also think about the ways in which modern cars are better suited to this kind of journey, often featuring built-in GPS systems, Bluetooth hookups for playing music or receiving navigational instructions from your iPhone, and improved safety features like alerts if you're drifting out of your lane. All of this is undoubtedly true, but do all of these convenience-adding features also make traveling cheaper?
Over the course of human history, many of our most critical technological advances have been put to use in helping people and goods get from Point A to Point B more effectively. Take air travel, for instance: only a few years ago, most travelers needed travel agents in order to cut through the complexity involved in bundling together connections and return flights in the most sensible manner. Cut to the modern day, and a simple Google search can give you the times, connections, and prices for your various options based on your desired travel dates and destinations. Not only that, but once you’ve booked your travel itinerary, you can check in online (rather than at the airport), receive your boarding passes via e-mail, and receive alerts about your flight on your phone. All of sudden, life as a traveler is about connectivity and convenient digital workflows.
As the era of Industry 4.0 continues to ramp up, new corners throughout the world of industry will continue to see rapid growth and changes—for which they may or may not be prepared! Certainly, the general trend of increasing cyber-physical systems, big data and analytics integration, autonomous machine decision-making, and increased product customization will be apparent to some degree in every Industry 4.0-enabled factory, but the particulars of the Fourth Industry Revolution’s effect will vary widely from industry to industry based on products, product lifecycles, and customer expectations. This means that the picture of Industry 4.0 readiness will look very different in different fields. In furniture manufacturing, for instance, production planners and IT staff may encounter a very different set of challenges than, say, automotive manufacturers.
Let’s pretend that you and a friend are both mixologists at an upscale cocktail lounge. On weekends, there tends to be a rush of patrons late in the evening who ask for drinks faster than you can produce them. As a supply chain or logistics manager in real life, in this scenario you might be tempted to suggest that you and your fellow bartender start creating a buffer stock of drinks before the big rush, so that people can receive their drinks as soon as they order them. Unfortunately, you can’t really know what drinks people will order in advance (to say nothing of the fact that the ice will melt), so creating a buffer stock is impractical. You can, however, do some prep in advance, like preparing garnishes and simple syrup. When the rush comes, you’re still slammed, but you’re able to create drinks more efficiently.
In the past few years, sustainability has become a topic of considerable importance throughout the automotive industry. As the automotive supply chain becomes increasingly globalized, businesses are now more than ever faced with the Herculean task of managing not just the logistics and costs associated with a complex web of global suppliers, but with the environmental impact and long term sustainability of the associated businesses practices. While this process is often daunting, it has grown in importance to the point where manufacturers ignore it at their own peril. Even beyond supply chain considerations, many businesses are finding that discussions of sustainability bring up questions and dilemmas that they’ve never faced before, from deciding on acceptable trade offs between sustainability and profitability and uncovering areas where sustainability increases profitability, to developing new KPIs for managing vendors and suppliers.