We’ve all been there at one point or another: you’re scheduling production for a large, complex item like an automobile in a plant that produces multiple different models. Your materials and capacity are relatively well synced, and your plans for the rest of the week or month seem pretty stable. Then, all of a sudden, a huge rush order comes in from an important client. All of a sudden, you're scrambling to allocate the materials and capacity necessary to slot this order into your existing plans. You pull resources from one order to give this one the resources it needs, but that has a complex ripple effect through your ordering flows; by the time you’re done reworking the schedule, your production plans are confusing and far from optimal.
Let’s say that you’re a manufacturer creating widgets for large scale distribution in your region. Though the widgets are vitally important to your clients, they’re incredibly complex and difficult to produce, meaning that even when everything is going smoothly within your operations, the yield for any given production process has a high degree of variability. No matter how effectively you replicate your process each time, differences in source material quality and production conditions mean that some number of finished goods are going to have flaws that prevent them from going to market.
As the global scope of the modern supply chain continues to increase, there’s going to be more data available to supply chain planners than ever before. For some businesses, this data will likely just sit there collecting dust—but in point of fact it’s increasingly going to be an important source of value for planners. Why? Because modern analytics processes, powered by technologies like AI and machine learning, are making that data exponentially more valuable as a source of usable insights.
Topics: Advanced Analytics
The best laid plans of mice and men often go awry—and nowhere is that more true in the worlds of manufacturing and supply chain management. Sometimes it seems like even the most visible and adaptable supply stream is always one disruption away from chaos. For production planners in particular, you’re constantly battling the risk that new, unexpected orders will come in and you won’t know how to slot them into your existing flows, or that a machine on your production floor will break down and bring your whole operation grinding to a halt. To some extent, occurrences like these are just a fact of life. But that doesn’t mean planners can’t work to prevent them, just as it doesn’t mean that planners can’t work to gain more value from the processes that are already working smoothly.
Let’s talk about Sherlock Holmes for a second. When you think of this famous English detective, a few things probably come to mind: his iconic deerstalker cap, maybe his pipe or his violin, and his magnifying glass—that critical tool for finding clues that Scotland Yard might have missed. Though Holmes was a fictional construct, sprung from the mind of Sir Arthur Conan Doyle, the method he employed in his stories and novels actually had a real-world impact on how detective work and criminal investigations were conducted in the 20th century.
Supply chain management can often be a stressful task, sure, but so can planning a successful potluck. You often don’t know in advance who’s going to bring what dish to your event, which means that any meal-planning you do on your end is essentially guesswork. Though it’s not likely, you could end up with a party where everyone independently decided to bring potato salad, and no one brought any main dishes or desserts. Luckily, in the 21st century, there’s an app for that: party planners can let attendees specify what they plan to bring in advance, and that information can be displayed in real-time for other attendees who are still deciding. In this way, party planners reduce the likelihood of too many repeat items, while putting themselves in a position to fill in any gaps that may arise.
Most businesses in the manufacturing sphere have some form of sales and operations planning (S&OP) workflow that covers the monthly or quarterly timetable that’s often left unplanned in longer term business goals. In the Industry 4.0 era, a newer, even more granular level of planning has emerged to supplement S&OP by covering the daily, weekly, and monthly supply chain activities that might otherwise go without any cohesive planning structure. The name of this new level of planning? Sales and operations execution, or S&OE.
Let’s talk for a second about pattern recognition. The human brain is constantly searching the perceptible world for patterns, sometimes in order to make better decisions (in the case of, say, emerging traffic patterns while driving) and sometimes simply in order to pass the time (in the case of constellations). The thing is, while the search for patterns is an innately human pastime, it’s not something that we as a species are necessarily all that good at. Think about it: how often do we read or hear about people making the same mistakes over and over again without identifying the common factor? How often do we see businesses rolling out the same strategies over and over again without ever noticing the ways in which those strategies could be improved?
Often, when trying to advise their readers on the best ways to avoid supply chain disruptions, experts and other commentators will suggest increasing your buffer stock. No doubt this is effective when it comes to staving off shortages, but it’s still a deeply unsatisfying answer. Why? Because stockpiling goods is frequently costly, and doing so can bog down your operations in the long run. Sure, it can be useful insulation against the unexpected, but it’s also the antithesis of anything resembling an agile or lean supply chain.
Pop quiz: how many of you reading this are wearing a Fitbit right now? We’re willing to bet that at least a handful of you answered in the affirmative, maybe even a large percentage of you—and on some level that makes sense, because step-counters and other pieces of wearable technology give us insight into and control over our health in ways that simply weren’t available to previous generations. A mere couple of decades ago, most people presumed themselves healthy until they received some evidence to the contrary, whether that came in the form or new pain and discomfort or a stern talking to from a primary care physician. Now, with just a wristband and a smartphone you can monitor your sleep habits, your heart rate, and your physical activity in real time, meaning that if something changes in your health status you’ll notice early and take immediate action.