Playing in Perfect Harmony: The Importance of E2E Visibility
Nick Ostdick - June 23, 2016
Ever listen to a great orchestra or symphony perform a classic piece of music? If so, then you’ll know how crucial the balance and delicate interplay between each instrument is in creating a harmonious sound that achieves a certain artistic goal or elicits a desired emotional response.
Each part must be played with precision and an uncanny sense of timing, and the musicians must know the piece of music like the back of their hand in order to add complexity and depth to the overall piece of music rather than subtract.
Just like a great symphony, much of the precision, accuracy, efficiency, and insight is true for the automotive manufacturing and supply landscape in an effort to create end-to-end (E2E) visibility across a company’s entire value chain. Such visibility is critical in cutting through the complexity of today’s global supply network and leveraging best practices to ensure the right products arrive at the right place at the right time in the right quantities. Obviously, this is not only crucial to keep up with demand and planned production schedules, but it’s also integral in reducing waste, increasing efficiency, and enhancing communication and collaboration at each touch point in the supply chain.
But how do companies achieve E2E visibility in today’s production and supply industry? With multiple production facilities and hubs in new and emerging markets, how can companies navigate the intricate nature of optimizing and streamlining supply processes to create this visibility and operate a more agile and responsive supply stream?
In other words, how do companies make sure the right players are playing the right piece of music at the right time to create a harmonious, coherent sound? Here are a handful of strategies companies must deploy in order to achieve greater E2E visibility.
Define the Requirements
When a symphony’s conductor sets out to direct a piece of music, he must first define what his artistic aspirations and goals are in presenting the music to an audience. In much the same way, companies must define their goals, desired outcomes, and metrics for analytics in evaluation based on the needs and capabilities of their supply stream. A fundamental understanding of a manufacturer's partners - whether in distribution, transportation, or warehousing - and the ability of those partners to work cohesively with the manufacturer on planned productions is key in creating a supply stream that is capable of weathering potential disruptions or breakdowns.
How many facilities will be online in planned productions? What are the constraints at each of these facilities? What are the strategies in place to adapt to modifications in these rules or constraints? These are the questions companies must ask themselves in defining the architectural structure of their supply stream in order to fully optimize it and create value propositions at the demand planning, production, distribution, and delivery stages.
While no two value chains are alike, companies must identify, review, and execute a number of planning and production strategies such as Plan for Every Part (PFEP), BOM management, lean inventory optimization, and others, in conjunction with having E2E visibility, if they hope to succeed in creating the most efficient and optimal supply chain.
The Right Tools in the Right Tool Box
Two cellos. Four horns. Some woodwind instruments. A robust percussion section. Once a defined goal has been established, a conductor can move on to the task of establishing the right tools in order to create the sound he desires. And once a company has defined the parameters and needs to operate a cost-effective, efficient supply stream, the task becomes selecting the right tools in order to fulfill those needs.
In today’s market, the name of the game is speed and efficiency, and for many in the automotive or other variant-rich industries, this efficiency revolves around the capacity to execute and review actions in real-time. For example, say a production hub in Mexico is working to complete an order for distribution in Europe, however, last-minute alterations to that order based on demand forces significant increases in this production run to meet customer needs. Rather than simply rely on guess work or past data that is more than likely outdated, planners and managers need the capability to implement these modifications, create predictive models, access inventory levels, and review up-to-the-minute data in order to avoid a production or supply breakdown.
This is just one example, but you see the necessity for accurate, detailed, and accessible modeling, reporting, and actionable data in order to remain efficient and competitive. Integrating optimized, smart production and reporting solutions is a key driver in operating a responsive supply chain. Additionally, utilizing advanced supply management strategies such as BOM explosion, optimized PFEP, and in-transit monitoring will help bolster a company’s supply chain efficacy.
How did the orchestra function as a whole? What parts of the symphony lagged or were problematic? How can we adjust our arrangements to get the most resonance and impact out of each movement? For a number of reasons, pure evaluation and detailed analysis of executed actions within a company’s value chain are rarely reviewed in order to decipher how and why they impacted production and supply in the manner they did. As such, resources, capital, and workforce is often subject to waste, which can severely hamper a company’s ability to compete in an expanding manufacturing environment.
If we interpret supply chain agility as the ability to access accurate information in a timely manner and understand that demand planning in today’s world can be done on an hourly basis - think of it as the difference between a lone morning weather report and a weather app on your smartphone - then it’s easy to see the value in reviewing supply network performance on a daily basis rather than weeks or months after specific actions are executed. If a company’s supply stream is functioning in a way where real-time data is available - and as we just discussed, this is a core driver in striving for E2E visibility - then allocating time and resources to reviewing specific performance metrics is a no-brainer in modifying existing or engendering new strategies to deal with the complexity and nuance of production and demand planning.
You may have asked yourself at the beginning of the blog: What does a symphony have to do with supply chains? Well, as we’ve seen, the most crucial cross-over is synchronicity - the ability to orchestrate a myriad of disparate parts into one cohesive function. If companies look at supply logistics in that manner, it becomes much easier to understand the connectivity of the value chain and why E2E visibility is such an important factor.