The Perfect Play: Solutions for Enabling E2E Visibility
Nick Ostdick - October 25, 2016
Achieving end-to-end visibility (E2E) in today’s automotive supply chain is like creating the perfect play in an American football game. The right players have to be on the field at the right time and used in the right manner in order to move the ball down the field and give the team the best chance to score a touchdown. Players move strategically about the field, anticipating how the opposing team will react, and responding to those reactions in ways that allow for the best chance of putting points on the scoreboard. Coaches write the plays, players execute them, and the success of each play is then reviewed by both parties to create future successes.
For OEMs and supply chain planners and managers, E2E visibility is the game and the solutions and platforms available to them are the players. Deploying these solutions, platforms, or strategies is analogous to coaches creating and executing plays, and getting a score is similar to an OEM experiencing enhanced productivity, growth, and customer satisfaction due to the reliability of production programs and delivery.
But whereas an American football coach has a quarterback or wide receiver as their primary tool of scoring a touchdown, what tools do planners and managers have for achieving E2E visibility? What solutions or strategies are necessary for leveraging lean production and supply principles? We’ll examine a few of these solutions later, but before we discuss how to best enable E2E visibility, we must first understand its significance in today’s global supply network.
The Importance of E2E
Just like a well-conceived football play, precision, accuracy, efficiency, and insight is critical 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 key 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. 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.
As a coach would signal his players to conduct a certain play with a specific end-goal in mind, OEMs must, in a similar fashion, define their goals, desired outcomes, and metrics for analytics for 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 production is key in creating a supply stream that is capable of weathering potential disruptions or breakdowns.
How many facilities will be online for planned production? 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.
Making E2E a Reality
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.
The tools necessary to create these models, access inventory, and review data in real-time run the gamut from demand planning to container management to transportation/freight management. Some of these tools include:
BOM management. It used to be that BOM was simply a list of raw materials or components necessary for productions. The BOM adequately answered the question ‘What is the product made of?’ by providing manufacturers with a recipe in order to help them best source the materials, select assembly sites, and direct labor in a cost-effective and growth-oriented manner. But BOM strategy has evolved into a key driver in the enhanced digitization of the entire supply process. Through implosion or explosion of the BOM, manufacturers and planners now have the capacity to control the flow of a product from the assembly line to the customer. BOM explosion or implosion allows for changes in production on all levels - from materials to assembly sites to the overall structure of a product - and enhances a company’s ability to see and understand the links between each stage of a product’s production and distribution.
Plan for Every Part. PFEP solutions allow for manufacturers and suppliers to plan, monitor and manage the supply streams, inventories, and replenishment of parts and components across the entire span of the supply chain - inception to production to delivery. Each link in the supply stream is accounted for, evaluated, and recorded, providing the entire value chain with vital information about the product such as a description of the part; its facility or hub of origin; dimensions; packaging details; storage condition; location within a warehouse; manufacturing lead time; and much more. While many companies already have existing strategies to gather data and information comparable to that of PFEP solutions, the inability to curate, share, review, and analyze this data in real-time often creates cross-organizational silos that inhibit collaboration and stunt growth and profitability.
Every Part Every Interval. The goal of EPEI is to break daily production into the smallest lots possible and distribute these lots evenly throughout the day. The end result, if implemented correctly, is a lean, more efficient production and supply network capable of meeting demand without running overages on inventory, encountering breakdowns due to supply constraints, or putting undue stress on production facilities that aren’t capable of meeting certain production criteria. Leveraging accurate EPEI through a series of somewhat elementary calculations based on production quantities, facility capacity, inventory, and size of customer orders results in reduced lead times, shorter and more efficient production cycles, and reduced space constraints for planned productions.
While you may have thought comparing E2E in today’s variant-rich supply chain to an American football game was a bit of a stretch, it’s not hard to see the relationship between scoring a touchdown and creating a lean supply stream with enhanced visibility and agility. Leveraging these solutions and strategies will not only give OEMs a number of competitive advantages in successfully managing their production and supply networks, but successful execution will also provide them with valuable insights into their internal processes and supply situation - a key driver in promoting long-term, sustainable growth.