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.
In our most recent entry, we discussed build-to-order (BTO) planning and production strategies and when it makes sense for OEMs to leverage BTO principles to ensure streamlined production programs and enhanced customer relations through timely order fulfillment. We also briefly addressed how BTO is not the only production planning strategy available to OEMs and how build-to-stock (BTS) has its place and function in a company’s demand planning platform.
Whereas BTO strategy is based solely on incoming customer orders, BTS functions on forecasting and demand history in terms of scheduling production programs and inventory management. Essentially, BTO functions like an elevator in that the elevator car only operates when a rider pushes a button to be transported to a certain floor - or when a customer order is created. On the other hand, BTS operates more like a commuter train where the number of train cars and daily routes is based on past ticket sales and ridership - past demand and history is used to forecast future demand in order to schedule the right number of production programs to meet this anticipated demand.
Today’s blog entry features a brief Q&A with flexis Vice President of Research Hansjörg Tutsch about flexis’ job shop management and scheduling solution.
In today’s global, automotive supply chain, end-to-end (E2E) visibility is a core driver in promoting growth and profitability, and flexis JSS platform is a key value proposition for companies in leveraging a lean, streamlined supply stream. With its flexibility in medium and short term planning, flexis JSS ensures transparency and agility for production programs and allows planners to take control of their planning strategies for increased customer satisfaction.
As such, Tutsch believes flexis’ JSS solution should be a top priority for companies to enhance productivity in a competitive industry. We began our discussion about JSS solutions with Tutsch discussing the status of digitalization and production in today’s automotive supply chain and how JSS solutions fit into that conversation.
It’s summer and that means my family is preparing for a week-long road trip we take each year to relax, unwind, and visit parts of the country we have yet to experience. As part of the planning, we all gather around a table with a map, chart a course, discuss the pros and cons of the route, and the places we want to visit, as well as our budget, time constraints, and other resource-based concerns like fuel, food, and lodging. In doing this, we’re able to ensure the easiest, most pleasurable experience for the whole family, as well as troubleshoot any potential issues that may arise as we complete our journey.
What does road trip preparation have to do with the automotive supply chain? Well, the ability to create stable and efficient planned production programs to meet customer demand in a timely manner is not unlike planning my family’s trip. Particularly in short and mid-term planning, OEMs have to account for the ability to receive orders, allocate resources and production sites, ensure inventory, and meet delivery timetables, all based on a number of rules and restraints in the production cycle.
Job shop scheduling solutions, much like the map my family uses to create our route, allow planners and managers to plot out parameters for optimized production programs ahead of time to combat bottlenecks and disruptions and ensure lean, efficient production cycles for on-time delivery.
Think about the concept of an air traffic control tower: a centralized location where a multitude of aircraft are monitored, directed, and communicated with during both takeoff and landing. Those working in the control tower are responsible for coordinating and managing which planes utilize which runways and when, as well as overseeing when and where flights move while on the ground - from the gate to the taxiway and so on. It’s a very complex process involving multiple air traffic controllers working in harmony to ensure flights depart and arrive safely and on-schedule to avoid delays and backups both on the ground and in the air.
Now, think about the task OEMs have in managing multiple production sites - or a network of production facilities in disparate locations.