If our goal on the flexis AG blog to educate our readers about the pressing issues in global manufacturing and supply chain management, then today’s entry is right on par with that mission. Transport logistics, though a critical element to a manufacturing supply chain management strategy, is perhaps one of the least discussed aspects of SCM. While an underutilized element of administering a successful value chain, transport logistics (or the manner in which companies move finished products from the production room floor to the customer’s door) is the last crucial link in fulfilling customer expectations and ensuring production programs are executed to their fullest extent.

It’s somewhat difficult to understand why transport logistics often gets lost in the fray of global supply chain management. Perhaps it’s because more emphasis is placed on operations at earlier stages in the value chain such as planning and procurement. Or perhaps it’s because the facilitating of effective production programs is often at the forefront of the minds of planners and managers. Either way, transport logistics, though often neglected, can either be a significant boon or detriment to how effective a manufacturing company conducts itself.

One of the greatest challenges manufacturing companies face in today’s global, competitive landscape is generating and sustaining growth of revenue. Because the manufacturing industry is variant-rich and often reliant on complex partner networks spread across the globe, manufacturing companies often operate in a ‘lean and mean’ context where profits can be fairly small and margins for error in terms of investment and return are razor thin. As a result, companies must deploy a number of concepts, platforms, and campaigns to help bolster revenue, optimize processes, and eliminate instances of waste or redundancy.

There’s one thing that pops to mind when you ask people about artificial intelligence in the manufacturing industry, particularly in the automotive landscape: Autonomous or driver-assisted cars. And the future of driverless vehicles may in fact arrive sooner than many people think, there’s actually more concrete contexts for artificial intelligence (AI) in today’s manufacturing sphere. AI has the potential to impact the automotive manufacturing supply chain in equally profound and interesting ways beyond the idea of the driverless car. In fact, AI has the potential to be a truly disruptive force in the way automotive manufacturing companies produce vehicles and how the consumer interacts with the end product. 

With AI as an increasingly common technology platform, the manufacturing industry — automotive sector in particular — is set to experience significant changes in the coming years in terms of production and supply chain management. As vehicles become more integrated, individualized, and complex, manufacturing companies will have to leverage more lean methods of production and supply chain logistics to keep pace with the demands of such a variant-rich industry.

Administering an integrated supply chain in today’s manufacturing industry is a tricky proposition. No matter how carefully and thoroughly planners and managers work to reduce volatility and uncertainty in any number of variant-rich industries, the complexity of a global manufacturing and supply stream means companies must work harder than ever to ensure their value streams are responsive enough to weather potential breakdowns, disruptions, shortages, and other obstacles in facilitating effective supply chain management.  

While Big Data has certainly permeated nearly every aspect of today’s manufacturing and supply pipeline, some industry analysts still question the validity, value proposition, and staying power of Big Data for companies as they strive to streamline their operational platforms and leverage lean manufacturing principles for optimal productivity and profitability.

Consider this question: Is simply doing enough actually enough? Should the status quo be an appropriate goal? Or, in the sphere of today’s global manufacturing pipeline, is merely administering an adequate supply stream sufficient enough to compete in a complex, variant-rich marketplace? In each of these questions, the answer is no, and manufacturing companies are quickly realizing their supply streams have to do more than simply move products from the production floor to the customer’s door. Instead, supply logistics have to be drivers of growth at each touch point of a company’s value chain.

A 2014 survey released by professional services group Deloitte showed 79 percent of companies with high-performing supply chains achieved revenue growth greater than other companies within their same industry. If nothing else, this clearly illustrates the connection between a well-structured, highly-functioning supply chain and business growth and profitability.

What’s one of the most undervalued elements in creating E2E supply chain visibility? It might surprise you, but this overlooked aspect of supply chain management is perhaps one of the most critical ingredients in how companies successfully move material supply to the production floor and finished products to the customer’s door. Of course, we’re talking about transportation.

That’s right, transport logistics, while perhaps underutilized, is a significant driver in how manufacturing companies administer, oversee, and evaluate the overall health, sustainability, and efficiency of their supply situation. It’s somewhat difficult to understand why transport logistics often gets lost in the fray of global supply chain management. Perhaps it’s because more emphasis is placed on operations at earlier stages in the value chain such as planning and procurement. Or perhaps it’s because the facilitating of effective production programs is often at the forefront of the minds of planners and managers. Either way, transport logistics, though often neglected, can either be a significant boon or detriment to how effective a manufacturing company conducts itself.

Today’s manufacturing and supply chain planners and managers are inundated with concepts and strategies purporting to add value to their overall value chain. Whether it’s integrating intelligent planning systems or working to streamline their manufacturing processes from procurement to production, manufacturing companies must seek value in any number of ways in order to remain competitive and agile in an increasingly global marketplace.

One place where manufacturing companies have been comparatively slow in realizing and leveraging value is enterprise resource planning (ERP), or more specifically, adopting a postmodern ERP mindset. Whether it’s because the lack of visibility surrounding these concepts or a failure to fully embrace them as part of lean manufacturing and supply chain management, postmodern ERP is perhaps one of the most least understood or realized element of manufacturing and supply logistics. Not only does postmodern ERP have the potential to transform a company’s manufacturing and supply logistics, but it’s a key element in cutting the complexity of global supply chain management and leveraging enhanced operational functionality.

Let’s play a game: Imagine a genie appeared before you and granted you five wishes for helping your manufacturing company improve and strengthen your supply chain. While you can’t wishes for more wishes, you can wish for anything and everything from enhancing the efficacy of your sales and operations planning platform to your transport logistics strategy. The trick question is: What do you wish for? What actions can you take that would holistically improve your overall supply management and logistics scheme while at the same time bolstering your productivity from procurement of materials to the delivery of the final product?

The genie element of the exercise is of course completely impractical, but the real-world implications of this exercise are something production planners and managers grapple with on a daily basis. In a such a growing, competitive industry, there’s so many voices, opinions, and recommendations companies must sift through in deciding how to enhance their supply and production processes and where they can afford to take value-added steps and where they cannot.

The more chatter within a certain community about any given subject, the greater likelihood misinformation will creep into the conversation, thus distorting the truth or value about any given topic. This is especially true in global supply chain management when it comes to advanced analytics and how manufacturing view advanced analytics as part of their supply chain logistics.

As discussed in previous entries, today’s manufacturing insiders and analysts define advanced analytics as as the ability to glimpse into the future to cut the complexities of the global supply chain is key to unlocking the value of this reporting model. Operating in two distinct categories — predictive (risk management, planning) and prescriptive analytics (transportation routes, inventory management) — advanced analytics removes much of the guesswork that was at one time associated with making informed decisions about demand planning and production programs.