Murphy’s Law states that whatever can go wrong, will go wrong—and nowhere is that more true than in the world of global supply chain management. Risk is simply a fact of life in almost all business spheres, but automotive industry manufacturers in particular frequently deal with incredibly complex supply streams that face a near-certainty of disruption. Managing complex relationships between suppliers, shippers, and production processes can lead planners to the brink of numerous potential pitfalls, but, luckily, in the era of Industry 4.0 there are more tools than ever designed to alleviate the pain points of the past.
Imagine for a moment that you’re an employee at an automotive manufacturing company. Every year of two, the owners create and share a strategic vision for the long-term future with management. Managers, in turn, create shorter-term plans of several months to put the longer-term vision into practice with Sales and Operations Planning (S&OP). As an employee, you manage your day-to-day tasks in accordance with those plans, responding the small crises of the workday with whatever resources and insights are available to you. Perhaps in responding to these situations, you find yourself wishing that there was something to bridge the gap between S&OP and those day-to-day processes. Sales and Operations Execution (S&OE) is that bridge, and it represents the path to the most responsive possible supply chain.
It’s been said that we should think of scientific revolutions not as revolutions per se, but as paradigm shifts—meaning that, rather than thinking of the great breakthroughs in 20th century physics or medicine as groundbreaking seismic shifts, we should consider them in terms of reorientations of method and changing understandings of old knowledge. The same might well be said of new developments in industry. The rise of automation, for instance, didn’t do away with the use of manpower overnight. Instead, it led us to reconsider the way we utilize people as resources and the way that we structure processes around manual intervention.
What does this way of thinking mean for how we discuss “the fourth industrial revolution,” i.e. Industry 4.0? Simply put, the tremendous potential benefits of Industry 4.0 won’t happen on their own. Yes, manufacturing as a field will change drastically and factories will become smarter and more reliant on sensors and internet of things (IoT) devices, but companies need to make an active engagement with these changes by learning to rethink their processes and their use of resources across the supply chain. This raises an important question: how can companies make the most of this new paradigm shift?
Even with the continuing rise of Industry 4.0, many companies treat transportation scheduling as something of an afterthought. Sure, many businesses have restocking rules and recurring transportation orders that are carried out on identical timetables every set number of weeks or months, but today relatively few manufacturers employ a truly robust solution for scheduling transportation. We’ve spent time on this blog touting the importance of transport logistics, but ours is obviously not the only opinion on the subject. Let’s take a few minutes to discuss some of the potential arguments used against it.
In chess, players are taught to think at least three moves ahead. Every action in the game has a reaction, which can be predicted only to a certain extent, and each possible reaction must be planned for in order to efficiently execute a winning strategy. If each piece on the board represents mission critical resources and manpower, then your short- and mid-term planning must take a holistic account of the board and the structure of the game into account in order to be certain that time and resources are not wasted.
It’s undeniable: the visibility and proliferation of Industry 4.0 in today’s modern manufacturing landscape is quickly reaching its apex. More and more planners and managers have not only embraced Industry 4.0 as a critical driver of manufacturing and logistics efficiency, but successful companies have implemented Industry 4.0 as a holistic reinvention of planning and production processes, especially given the push for end-to-end digitization.
This is particularly true for variant-rich industries with complex partner networks and value chains where supplier and customer relations often engage in highly individualized, specified productions and delivery methods. Industry 4.0 provides companies the ability to respond to customer demands, supplier fluctuations, and constantly changing restraints and rules in complex planning and production programs. This also results in enhanced levels of end-to-end (E2E) visibility, which is a critical driver for companies in understanding their overall supply situation and leveraging lean manufacturing principles - both of which are key in reducing operational and production costs and increasing revenue.
Topics: Industry 4.0
As the year draws to a close, we at flexis look forward to a new year's worth of innovation and insight as we renew our commitment to keeping readers informed on the new challenges and solutions that define the ever-changing world of supply chain management. 2018 promises to be even more exciting than its predecessor and we promise to help our readers stay up to date on the arising trends that may impact their businesses.
What comes to mind when you think about transport logistics? Streamlined product movement? Enhanced inventory management and monitoring? Better procurement processes? Or perhaps increased customer satisfaction or customer relations platform? While all these are certainly true, what less frequently comes to mind (perhaps incorrectly so) is enhanced business value. Though increasing business value usually comes into play earlier in the production lifecycle, increasing the efficacy of moving products from the production floor to the customer’s door has ripple effects across the entire value stream.
Because transportation relies on so many varying factors each with their own level of uncertainty or constantly shifting constraints (fuel economy, routing, obstacles in transport routes, and others), the capability to mitigate and respond to these moving targets is a crucial driver in helping manufacturing companies maintain delivery timelines, enhance the accuracy of their delivery dates and windows, and drive enhanced customer service. In addition, because transport networks can be varied and include a number of partners across a wide range of regions or locales, they can lead to even more complexity and nuance in facilitating a transport logistics strategy that drives business value.
The title of this blog says it all. Planning silos, even in today’s fairly integrated, optimized supply stream, are still a major challenge for manufacturing companies, especially in variant-rich industries with complex partner-networks. The prospect of cross-organizational communication and data-sharing in the planning stage of the production cycle remains for too many companies simply that: A prospect, a goal, rather than a standard mode of operation.
But for manufacturing companies who understand and realize its value, digitization can be a critical (or perhaps the critical) tool in eliminating these planning silos and fostering an atmosphere of communication and collaboration during the production planning process. Whether it’s constructing a more efficient, streamlined planning and production scheme or creating enhanced methods of procurement, inventory management, job allocation, and transport logistics, digitization is a supply chain management platform whereby companies can leverage greater efficacy to grow their business, create stronger partner networks, and leverage competitive advantages in an increasingly crowded marketplace.
Consider the idea of a hybrid car. A platform that combines elements of power via electricity and those of traditional gasoline. Each side of the coin provides its own set of benefits and liabilities for motorists, but when combined hybrid vehicles leverage the best of each fuel type to enhance both the driving experience and the benefits of green energy and technology.