We’re surrounded by redundant expressions every day. Close proximity and basic fundamentals spring immediately to mind. Unintended mistake, past history, and plan ahead follow close behind. When hearing the phrase “advanced analytics,” many people jump to the conclusion that this is just another business-speak example of redundant word use. Aren’t all analytics advanced? In truth, the expression has a specific use, particularly in a discussion of data use in supply chain management.
Raise your hand if you’ve heard the story of William James giving a lecture on the structure of the galaxy. After the lecture, an old woman comes up to him and says that his theory (in which the sun is at the center of the solar system) is no good, because the world actually rests on the back of a giant turtle. When James asks his interlocutor what the turtle stands on, she responds: "You're a very clever man, Mr. James, and that's a very good question… but I have an answer to it. And it's this: The first turtle stands on the back of a second, far larger, turtle, who stands directly under him."
From 2018 to 2019, Gartner’s outlook on Industry 4.0 adoption seemingly became a little less sanguine. It’s certainly not the case that their opinion of the potential of this massive industrial paradigm shift has lessened in any way, but the focus of their Industry 4.0 predictions for 2018 was how CIOs could find useful models of successful digitization, while for 2019 their focus was on dealing with the gap between expectations and reality that numerous industrial businesses are encountering with new technology. Again, it’s not that the outlook on Industry 4.0 itself is any less rosy than it was a year ago, but it seems like we’re reaching the point where real implementation hurdles are beginning to show themselves.
Wouldn’t it be nice if supply chains could run themselves? Well, between automated scheduling, production machinery, and even logistics planning, you can achieve a fair approximation using the right tools. Even so, there are plenty of places along the value chain where things can go sideways. The headaches may be less frequent, but they are no less real. No matter how seemingly care-free your supply chain, there are aspects you’ll want to closely monitor to ensure that smooth running continues. Crucial to each of these is the visibility into your processes that comes with Industry 4.0 technology and a solid supply chain management solution.
They say that those who don’t learn from history are doomed to repeat it—but in point of fact, relying too heavily on historical knowledge can often be just as bad. History tells us a particular new innovation will never work, or a new strategy will never succeed, and as a result we’re often blindsided when something truly innovative or unusual comes around. This is particularly true in the logistics industry, where changes in the global economy and the nature of supply chain technology are causing an exponential increase in the number of paths that any given cargo might take from producer to consumer.
Have you ever headed out for a family picnic, only to arrive and find your favorite meadow has been dug up to make way for a new housing development? Or left the house for a walk, and had it start pouring rain once you were ½ mile away? Did you have a contingency plan for that picnic, a backup location already selected? Were you carrying a raincoat in your backpack on that walk? These are examples of real-time planning in the regular world, but the concept transfers directly into the manufacturing realm in the form of being able to adjust and pivot as necessary. This real-time planning ability relies on more accurate demand forecasts, better visibility into the production line, and greater reporting functionality. In order for your company’s APS (advanced planning and scheduling) to be effective, let alone real-time, there are some contingencies that you’ll need to take into account.
Is your ERP working for you? Or against you? Sometimes businesses can get so entrenched in “how we’ve always done things” that they don’t see how the old ways are actually hindering their forward progress. And when it comes to a smoothly functioning sales & operations planning (S&OP) process, this hinderance can become fatal. S&OP is a constantly evolving, cross-departmental, high-level set of processes that are deeply entwined in and around multiple business units. It focuses on developing a future outlook, using historical data as its source material. Being locked into an archaic ERP system can throw up a brick wall in front of that future vision. To be sure we’re all on the same page as we get started, here are brief summaries of the major terms we’re working with today, ERP and S&OP.
As of a 2017 survey, just 6% of companies felt they had reached supply chain visibility. Elsewhere, nearly a fifth of companies listed visibility as their number one operational challenge (it ranks the third highest priority overall), but more than 60% admitted that they didn’t use any technology for monitoring their supply chains. By the same token, more than 90% of businesses have listed digital transformation as a huge driving force in the evolution of the modern supply chain, but fewer than half of those businesses have an actual plan in place for managing that evolution.
Is your boss starting to ask uncomfortable questions? Like what your average order cycle time is? Or what the latest shrinkage numbers are? Sounds like it’s time to line up your metrics and develop a solid plan for tracking and reporting to management.
Depending on your background, when you were a child your parents might have told you that your Christmas presents came from Santa Claus. From a supply chain planning perspective, this would have made things difficult for you, since your only source of information was fairly opaque, and you had little insight into the distribution mechanisms for toys and gifts. As a result, you were stuck jumping through whatever holiday hoops were presented to you, whether that was mailing a letter to St. Nick or putting out milk and cookies the night before. Once you realized the truth, however, all bets were off. At that point, you knew that the things that wound up under the tree just came from the toy store, and if you were feeling enterprising you could change your supplier relations to arrive at more favorable terms.