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.
Remember the “paperless office?” Back in the early days of computing for the masses, and particularly after the invention of the public internet, it was all any of the pundits could talk about. They expounded on the wonders of digital this and online that, with the underlying theme being the elimination of physical copies of paperwork. It’s been well over two decades, and I don’t know about you, but my last office had a 30’ run of filing cabinets that certainly weren’t empty. Today, those same pundits are going into great detail about the “disruption” of the automotive industry that electric vehicles (EVs) signal. But is the shift to EVs really going to have that much of an impact? As with so many things, the answer is a resounding “it depends.”
Life in the digital age is meant to be easier for manufacturers: rather than using spreadsheets to plot out potential production and logistics plans that attempt to meet customer needs within existing constraints, you’re supposed to be able to plan digitally—arriving automatically at the optimal route for your fleet to take from the factory floor to the distribution center, or the right production ratio to minimize downtime. This is where things like advanced planning and scheduling come in. They offer digital planning processes for the digital era, helping manufacturers to boost efficiency and limit disruptions.
Remember that one part of The Wizard of Oz? The one where the wiz comes out from behind the curtains? How was that one little guy able to control everything from his perch back there, without anyone being any the wiser? That I can’t tell you, but I can tell you we’re getting closer to a 21st-century version with the continuing maturation of the Internet of Things (IoT). The emerging technology that powers the 4th industrial revolution, Industry 4.0, is giving us a glimpse of what it would have been like sitting back there, with a view into all the goings-on of our realm.
You know that one product that seems to be in every outgoing order? The one kept all the way in the corner of warehouse 2, opposite from the loading dock? How much is it costing you to keep sending the forklift across 10,000 square feet of warehouse, multiple times per day? What if you moved that item to an empty bay 2 rows away from the docks? How much time, energy, and money would that save your logistics budget? If you don’t know the answer to any of these questions, it’s time to take a good, hard look at the logistics end of your supply chain to weed out the wasteful spending and tighten things up a bit. To get you started, we’ve pulled together a list of our top 5 areas of waste in supply chain logistics. If you can get these under control, you’ll be well on your way to a streamlined value chain and much-improved logistics ROI.
People say that the only constant is change. When they say that, they’re usually not talking about sales and operations planning (S&OP). And yet, what could be more relevant? If you’re an automaker, for instance, your business constantly needs to adapt to changing market conditions, customer expectations, technological realities, and other factors that can have a big impact on the success of your production plans, supply chain, and profits. There are any number of strategies that decision-makers use to try and address these constant internal and external changes, but one of the most commonly talked about (in some circles, anyway) is S&OP.
A friend of mine once told me he wouldn’t eat in any restaurant where he couldn’t see into the kitchen. What he was getting at is that you never know what’s going on behind closed doors, and he doesn’t want to eat anything he can’t see being prepared. Now imagine your supply chain is that restaurant kitchen, do you know what’s going on behind the closed doors of your manufacturing, business, and logistics processes? Visibility into the end-to-end supply chain is something that every production planner and logistics manager wants, yet few seem to achieve. And like that restaurant kitchen, what’s lurking behind the scenes can impact your customer’s satisfaction and therefore your bottom line.
Are you ready for a digital supply chain? Industry 4.0 is revolutionizing the manufacturing end, while its offshoot Logistics 4.0 is doing the same for the shipping end of the chain. But what about all the connecting pieces in the middle? Is your company ready to adopt the technologies and techniques that will fully digitize your end-to-end supply chain, or are you still using pen and paper to track your warehouse inventory? With the continued adoption of these technologies, the future of the supply chain is going digital, and there are a number of reasons digital will rule. Already, we’re seeing major inroads on the part of IoT sensors, RFID tags, smart pallets and GPS tracking leading the charge. Is your company ready to adopt and adapt? Or will you find yourself left behind as your competitors step into the digital gap?
If you could see the future, what would you do? Well, first off you would probably buy a bunch of winning lottery tickets—but you might also attempt to optimize your day to a certain extent. Instead of being taken off guard and having to scramble to make arrangements when you get an unexpected call from school that your kid is sick, for instance, you’re already on the road, having made arrangements to work from home for the day so you can tend to him or her. On the way home, you know that your child’s going to want their favorite comfort food, so you’ve already called in a pizza order.
Today we’re dusting off our supply chain crystal ball and are going to give you a glimpse of what inventory management may very well look like ten years from now given the advancements made in just the last five years or so. Logistics 4.0 is combining with Industry 4.0 to lead to massive disruptions in how the manufacturing value chain is run. IoT sensors, RFID tags, and AI are allowing for more automation, and advanced analytics are giving planners unparalleled transparency into the supply chain. This combination is potent in its ability to allow for more accurate forecasting and planning adjustments down to the day or even hour. In the future, these practices will eventually reach even wider adoption, becoming ubiquitous across sectors and allowing inventory management to ditch the pen and spreadsheet once and for all.