Imagine you’re at the grocery buying cooking supplies for the coming week. You see that tomatoes are on sale if you buy them in quantities of ten. Hoping to make use of the savings, you do some quick calculations in your head: the ripe tomatoes will remain fresh for about a week; you cook roughly one meal a day; your favorite dish requires two tomatoes. You determine that you could easily utilize ten tomatoes before they go bad, but you would have to commit to making the same dish five nights out of seven, and you might not be in the mood for it later in the week. 

If there’s one thing today’s planners and managers wish they had to ensure their planning and production strategies, it would be a crystal ball. A magical ability to glimpse into the future in order cut the complexity and uncertainty of modern manufacturing and provide a path of stability and certainty in a variant-rich value stream. While a crystal ball is obviously an impossibility, planners and managers do have a critical tool to help predict future planning and production needs while at the same time managing inventory levels and job allocation strategies for maximum efficiency and productivity.  

We discuss in great detail on this blog how integrated processes and optimized models result in enhanced operations, increased productivity, and more effective strategic vision. While these are certainly critical and worthy elements of discussion, they are part and parcel to a much larger concern we devote little conversation to: How these various planning and production techniques actually result in a more innovative way of doing business. Because, at the end of the day, a manufacturing company is a business, and a software solution or platform is only as valuable insofar as it helps a business develop and grow.

For example, take the idea of integrated production planning. Such a planning method is a core driver in helping today’s manufacturing companies (especially those in variant-rich industries such as automotive or packaging) not only reduce costs, but also create inroads for revenue generation and growth across the value stream.

Imagine trying to walk a tightrope. You must have incredible balance, be extraordinary nimble, and understand the nuances of each step as you complete your journey from one side to other. You also have to account for the context in which you’re walking the tightrope: weather or climate conditions, barriers or impediments along the wire, or other significant hurdles along the way. In short, to successfully negotiate such a challenge, the tightrope walker has to execute a number of tasks in quick succession (or sometimes simultaneously) to make it from Point A to Point B.

The same is true for demand capacity planning in today’s manufacturing and logistics landscape.  Particularly in variant-rich industries, the proposition of balancing demand and capacity - the amount of product or component parts needed to successfully fill orders and maintain efficient production schedules versus the sheer volume of components and parts required on-hand at all times - is intricate and complex. Many supply chain analysts and manufacturing industry insiders believe, even given today’s technology via integrated planning systems, that this issue is at the core of supply network logistics, especially given expansion and growth into emerging markets in new parts of the world.

To understand the importance of aligning planning and execution, think about the task of writing a memo or some kind of office communication. What’s the best strategy for effectively communicating ideas to peers? Do you compose the email in one session without filtering what you want to say or the information you want to convey, only then to go back and reread and edit the email at some later date? Or (and perhaps mostly likely, at least for many people), do you compose the email and edit as you go, deleting phrases, substituting words, or changing ideas and adapting the information in the moment as necessary for the best possible communication?

Odds are the most common method of emailing is the latter where edits and alterations are made in real-time as thoughts, ideas, and information hits you during the composing process. Where the first example may be a relic of the past when typewriters or handwritten correspondence was the norm, digital communication and the capacity to edit, rewrite, and revise in the moment means greater maneuverability in creating moments for effective, streamlined, and more productive communication. Where writing and editing/revising were at one time two distinct processes, today these functions are more or less integrated into one function with a greater level of process efficacy.

Take a television set from the 1980’s and one from 2017. Sure, both devices will function appropriately and allow you to view your favorite television show or movie, but the set from the 1980’s will clearly have a very limited set of capabilities compared with the one from 2017. The 1980’s set may not even have a remote. The picture will likely be much less clear, more grainy, and ultimately compromised. It may take a few minutes of running before the set functions properly. And odds are the set will be much more prone to malfunctions or breakdowns. On the other hand, the television from 2017 will have a much cleaner, crisper picture, allow for synergy with other applications such as a streaming device, and likely have a much longer lifespan.

In short, the 2017 television set will operate at a much higher level with a more streamlined operational platform for a much longer amount of time. The probability for error will be quite low and the 2017 will work in conjunction with other modern technology.

Think about the process of writing an email for a moment. How do you go about this task? Do you compose the email in one session without filtering what you want to say or the information you want to convey, only then to go back and reread and edit the email at some later date? Or (and perhaps mostly likely, at least for many people), do you compose the email and edit as you go, deleting phrases, substituting words, or changing ideas and adapting the information in the moment as necessary for the best possible communication?

Odds are the most common method of emailing is the latter where edits and alterations are made in real-time as thoughts, ideas, and information hits you during the composing process. Where the first example may be a relic of the past when typewriters or handwritten correspondence was the norm, digital communication and the capacity to edit, rewrite, and revise in the moment means greater maneuverability in creating moments for effective, streamlined, and more productive communication. Where writing and editing/revising were at one time two distinct processes, today these functions are more or less integrated into one function with a greater level of process efficacy.

Let’s think about the idea of bifocals moment. Essentially, bifocals combine two different focal lengths or intensities into one cohesive line or path of vision. Whether you have difficulty seeing great distances or difficulty seeing images up close, bifocals allow you to experience an enhanced visibility by bringing two seemingly disparate functions into one harmonious operation.

Now, what do bifocals have to do with production scheduling? Well, just like how bifocals combine two distinct modes of vision, production scheduling combines two distinct elements of the manufacturing cycle into one optimized function: sales forecasting and production planning. By combining these two elements of the production process, companies can not only increase their internal visibility, but they also have the ability increase productivity, accuracy, and agility, each of which is a core driver in enhancing customer service and client relations. 

Because production scheduling brings together so many aspects of the production process under one umbrella (everything from the procurement of raw materials to job allocation to monitoring the movement and transport of finished product to ensure on-time delivery), the traditional silo structure often found in global supply chain logistics is broken down and manufacturing companies can better integrate all parts of the manufacturing cycle to better equip themselves to address disruptions or breakdowns in variant-rich industries.

Today’s OEMs often find themselves at an interesting and confusing crossroads: The need or opportunity to increase sales by increasing production volumes without significantly altering short and mid-term planning strategies, which can result in severe bottlenecks or disruptions across a company’s entire value chain from dealer to customer. It’s a Catch 22 - how to grow and expand without overextending an OEMs resources, production programs, facilities, personnel, and planning platforms - and it’s a problem more and more companies face in a complex, diversifying industry.  

The automotive supply chain is already a variant-rich industry with the potential for serious pitfalls in production shortages, overages, and disruptions, especially with entry in new and emerging markets in disparate parts of the globe. Unforeseen events or fluctuations in demand or planned production programs are at the front of planners’ and managers’ minds as they strive to cut through the complexity of the global supply stream and leverage enhanced visibility and transparency into their supply situation. It makes sense then that the opportunity for volume increases adds another layer of complication onto an already delicate balancing act of demand and capacity.

Order planning in aggregate and component plants is a complex process, especially in today’s global supply landscape. Planners and managers have to take a number of factors into account when engaging in order planning on this level to ensure smooth, continued production programs that meet customer demand, delivery dates and quality control benchmarks.

Streamlining and enhancing the efficiency of order planning as part of lean manufacturing principles is a core driver for OEMs and manufacturers in fostering a responsive, transparent, and agile supply stream — all of which result in increased E2E visibility across a company’s entire value chain.