It’s the holiday season. You’re planning a big meal for friends and family. You’ve decided on the menu, selected recipes, made a list of ingredients, and identified the tools you need to actually prepare the meal. You’ve made a prep list, blocked off time in your day to actually put the ingredients together and cook. And in completing all these tasks ahead of time, you’ve given yourself enough of a base to finish the meal on-time, within budget, and in the most pleasurable way possible.
There’s a saying when it comes to American football: Games are won during the prep time between Monday and Saturday, not on the field Sunday. Understanding the opponent and creating a strategy or scheme to combat that opponent actually has more value than how the players perform or the events that happen during the game. And the same is true for today’s manufacturing landscape and how planning and production strategy are the most important aspects of a successful production cycle.
There are a number of tools manufacturing companies have at their disposal to help solidify planning and production strategy at the front end of the production cycle. Procurement. Resource allocation. Job allocation. These are valuable in helping companies chart an accurate course for efficient production based on market and customer demands. But while these safeguards in demand planning give manufacturing companies some level of insight and maneuverability in responding to alterations in rules or restraints in production programs, many of the most significant events or occurrences in today’s global manufacturing supply chain happen in the moment and without much warning or advance notice.
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.
It’s a question each and every manufacturing company grapples with: How can we reduce our transport costs and attempt to normalize our transportation strategy given the number variables associated with shipping our products? In an industry like manufacturing where so much of how efficiency a company functions is dependent on getting the right product to the right customer at the right time in the right condition, transport logistics cannot be overlooked as a critical part of the value chain.
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.
Because of the global nature of today’s automotive supply chain, slowdowns or valleys in production programs are constantly on the minds of OEMs and others across the supply stream. With so many disparate parts of the world now in play with production, distribution, warehousing, or transportation hubs, holidays, seasonal lulls, and other brands of disruption in terms of productivity can not only be frustrating for various players in the automotive landscape, but they can also be significant pain points for companies who do not utilize this time effectively.
For example, take a recent article in the commerce publication MarketWatch suggested this past summer was atypical in terms of production levels - at least throughout Europe, primarily in Germany - with manufacturing continuing at a brisk pace throughout the usual summer slow season, many within the global automotive supply chain still experienced lulls in orders and planned production programs. With so many employees on vacation and crucial parts of the supply stream in something of a holding pattern as the industry prepares for the busy fall season, it’s tempting to view the summer months as nothing more than downtime - a breather from the harried spring ramp-up in production. Given the 24/7, 365-nature of today's automotive industry, this summer slowdown instance is just one example of periods when production can slow and productivity can wain.
In any business, the right proportion of personnel and resources are critical drivers in fostering productivity, efficiency, and success in both the short and long-term. Companies must have the right people in the right positions with access to the right tools in order to ensure tasks are completed effectively, on-schedule, and with a high-degree of accuracy and quality. Shortcomings or misallocations in either personnel or resources can spell disaster for companies, particularly those competing in variant-rich industries on a large, global scale.
Much the same can be said for OEMs in the automotive supply chain especially when it comes to allocating machines and resources within a given hub for planned production programs. Planners and managers must leverage a finely-tuned strategy of available machines and resources in order to create effective short and mid-term planning platforms. Such platforms are then critical in ensuring on-time delivery, combating potential bottlenecks or breakdowns, and fostering robust, efficient production programs with the visibility and agility necessary in today’s ever-evolving supply stream.
Principles like machine and resource scheduling - along with intelligent, integrated planning solutions like job shop scheduling - provide planners and managers with the insights necessary to properly assign production programs based on a number of defined parameters, restraints, and rules.
It may as well be a four-letter word in the automotive supply chain: Disruption.
Each year, OEMs and manufacturers dedicate thousands of man hours and resources to avoiding supply chain disruptions in an effort to maintain productivity, reliability, and on-time delivery for customers. But even with the amount of time and effort manufacturers put into combating the potential for disruptions, the nature of a global supply chain is that disruptions will happen at some point along a company’s value chain, and what will determine a company’s resiliency is how said company responds and adjusts to these disruptions.
Be it large or small scale, the ability to react and correct disruptions at the production, inventory, or transportation level depends largely on understanding the kinds of disruptions and how at-risk an OEM is to experiencing each type. Given the interconnected nature of today’s global supply chain and expansive network of production facilities, warehouses, and transportation hubs, it would appear there is more opportunity than ever before for OEMs to encounter disruptions or breakdowns at more touch points across their supply network.
For OEMs, expansion into new or emerging markets can be both a blessing and a curse. While expansion into new pools of customers means growth, increased profitability, and an enhanced global footprint, it also means great uncertainty and complexity in terms of navigating the nuances and needs of each new market. No two markets are the same and manufacturers must devote time, resources, and talent to understanding what differentiates each new market - this means not only understanding the benefits of expansion, but also the challenges.