There’s a coffee shop down the road known for ham & cheese croissants. So you stop by one morning only to discover that they’re out. The barista says they only get 3-4 each day and that they’re generally gone before 8:00 AM. The 2 people behind you sighed and said they were looking for the same thing. This is the best (and smallest scale) analogy I’ve ever seen for poor demand capacity planning. The shop knows there is a demand for the item, and they know the bakery makes more than they order, yet they never have enough to even come close to meeting demand. Leaving many unhappy, and unsatisfied, customers debating the breakfast options down the street. For you, the demand capacity planner, this is the scenario you dread more than anything—being unable to meet your customers’ demands and losing them to competitors as a result. Follow along with the following steps, and you’ll be on your way to avoiding this situation by keeping production and demand evenly matched.
In the past few years, the industrial world has seen an increase in the use of so-called digital twins, i.e. digital representations of physical factories. Maybe you’ve heard about technology that makes use of this concept—maybe you’ve even wondered why and how this concept could theoretically be applied to your own operations. If you have, then you’ve come to the right blog. Today, we’ll give a quick rundown of the top 5 uses for factory simulations, and how those uses can drive value and reduce disruptions for modern manufacturers.
How are you using your ERP software? Strictly for resource planning, as intended? Or are you stretching that definition to include aspects of your supply chain management needs as well? ERP solutions are an offshoot of financial software, and most of it functions as such and can be clunky when pressed into alternative uses. A dedicated SCM software solution, on the other hand, is as flexible and multifunctional as your supply chain itself. Think of it like this: would you rather build your personal daily calendar out of an Excel spreadsheet, which is totally doable, or just use a ready-made calendar tool like Google Calendar? Yes, both are workable solutions, but only one is actually made to help you keep track of lunch dates and offer reminders for those important meetings you just can’t miss.
Artificial Intelligence (AI) can refer to a number of things, from machine learning to computer vision, but in general the phrase is used to indicate computer programs that can reason, learn, and problem-solve from data in a way that’s reminiscent of human intelligence. This takes any number of forms, from digital personal assistants like Siri and Alexa to competitive chess playing to autonomous vehicles—each of which involves a slightly different understanding of what AI is and does. For manufacturers, the most pertinent uses of AI are likely going to be the ones that are most heavily focused on gathering insights from large quantities of data—simply because of the sheer amount of information collected and stored by most industrial and supply chain planning platforms. The question still remains, however, of what manufacturers in general and production planners in particular should expect from AI in the coming months and years.
Whether you're creating a more synergistic relationship with a supplier of raw materials as an auto manufacturer or developing special relationships with retailers to improve the performance of your packaged consumer goods, collaborative supply chain partnerships often feel like the holy grails of the modern value stream. This is with good reason: a strong partnership in which information, risk, and benefits are shared equitably can add real value on both sides of the relationship in the form of reduced costs, smarter forecasting, or any number of other benefits. It's easy to see why people are willing to devote time and mental energy to it.
Imagine you’re hosting the family reunion this year. 75 people are going to be expecting a great venue, amazing food, and some planned activities. But you’re just one person, with some help from your girlfriend. Are you going to cook all the food, decorate the community hall, schedule and set up for the band, AND be there to greet everyone as they arrive? I certainly hope not. You’re going to hire a caterer for the food, be sure the band brings their own crew to set up and tear down the stage, and rope your girlfriend into being the greeter so you can still supervise the proceedings. On the other hand, if you’ve got a wife, 3 grown kids with their own significant others, and a circle of close friends, maybe you can do it all in-house. This is the power of outsourcing, it keeps the playing field even for even the smaller players. The question is—how do you maintain control over the cooks, musicians, crew, and cousins?
The manufacturing industry is in a bit of a pickle. Emerging technologies are coming at it from every direction, as digital transformation and integrated supply chains are being touted as the solution to all their woes. Industry 4.0, Logistics 4.0, AI, IoT, RFID, there are enough buzzwords and acronyms to make even the most seasoned production planner’s head spin. What’s a planner to do? As with so many areas of life, the key is to move one step at a time. See if any of the following five challenges apply to you, and if so, start by addressing them. Then, when you can see your way clear of that challenge, you’ll have a better understanding of what to address next for the greatest impact.
Consumer financial technology has reached a tipping point where pretty much everything you need to do on a regular basis can be done electronically. You can pay the rent, make a car payment, and even lend your friend $20 all from the convenience of an app on your smartphone. Then there’s that one payment, you know the one, when you have to dig around in your desk drawer to find your checkbook. At its core, supply chain integration does for you, the production planner, what eliminating the checkbook does for the general population, speeds up transactions and allows every relevant stakeholder access to the information they need. It’s about enabling your entire end-to-end supply chain to interact and interconnect via Industry 4.0 technologies. Because no matter how much of that tech you have deployed internally, if your supplier is still presenting you with a handwritten invoice—well, it just doesn’t add up.
Right now, even if your factory is relatively well equipped with IoT devices and RFID chips that can send production information back to your control tower, there’s a good chance that you’re still relying heavily on time-triggered events as your products make their way across the production floor. Sure, you’re gathering data at various stages of the production process, but that data isn’t automatically causing anything to happen. If something seems to be going catastrophically wrong, a production planner might get an alert and perform some manual triage, but most of the time the data functions as something of a post-mortem.
Do you check the weather report before leaving for work? What about for the upcoming weekend, to be sure your plans for a hike won’t be washed out? OK, how about paying attention to the long-range outlook, like how much snow is expected next winter and how that will affect the prospects of a drought the following summer? Weather forecasting shares many aspects with demand forecasting for your supply chain. You need to be able to look at the near term—say the upcoming few weeks—as well as the next 3-18 months and beyond. This is equivalent to checking the weather for tomorrow, the next two weekends, and the upcoming few seasons. If you want the whole picture, you need to gather as much information as you can on all three time frames.