Most businesses in the manufacturing sphere have some form of sales and operations planning (S&OP) workflow that covers the monthly or quarterly timetable that’s often left unplanned in longer term business goals. In the Industry 4.0 era, a newer, even more granular level of planning has emerged to supplement S&OP by covering the daily, weekly, and monthly supply chain activities that might otherwise go without any cohesive planning structure. The name of this new level of planning? Sales and operations execution, or S&OE.
Baseball may not be the most popular sport in many parts of the world, but when one considers all of the analytical and statistical breakthroughs the game has made in the past two decades, it really deserves to be a favorite of supply chain managers in the Industry 4.0 era. Since the dawn of the “Moneyball” era, scouts, commentators, and prognosticators have developed new, increasingly complex ways of measuring past performance and forecasting future outcomes. Because everything that happens in the game of baseball, from a stolen base to an outfielder dropping the ball, can be represented numerically, entire seasons can be simulated in granular detail, and insights can be gained from those simulations. By integrating these systems with real-time game data, we can now make an ongoing estimate of the win probability of each team in the middle of each contest.
For many decades, baseball statistics barely changed. People counted hits, batting average (the number of hits per at bats), and runs batted in and measured the value of their players based on those statistics. In the late twentieth century that all changed. With the advent of Sabermetrics and what would eventually be known as Moneyball, statisticians, baseball executives, scouts, and even casual fans entered a period of statistical renaissance. Old-fashioned stats took a backseat to complex new creations like OPS (on-base percentage plus slugging percentage) and Wins Above Replacement (a complex, GDP-like formula meant to distill value into a single statistic).
Imagine you’re packing up supplies for a backpacking trip across Tuscany. You’re limited by how much you can comfortably carry for many miles of walking, and you have to decide which items and in what quantities you’ll need in order to make it the entire length of the trail. You start with clothing and a first aid kit—but how much food do you bring? You want to pack light, and you think that you’ll reach the next town (where more food could potentially be acquired) within a day or two, but if you’re forced to slow down for some reason you don’t want to run out of things to eat. Bringing more food, however, means leaving behind one or two of the books you planned to read in your more leisurely moments.
In the past five to 10 years, real-time information has become a key value-added proposition for bolstering efficiency and decreasing waste in modern, digital supply chains. Businesses have used it to power more agile, responsive processes within their own value streams, creating environments that are primed for improved data-quality and easier analytics integration. The question remains, however, is this technology being utilized to its maximum effect, or are there still use-cases for real-time information that most businesses are failing to fully leverage? The answer is resoundingly the latter, as evidenced by these four surprising uses for real-time supply chain data.
Think about some of the biggest supply chain risks for a moment: unexpected weather events or natural disasters; price fluctuation for oil or other transport factors; inaccurate forecasts—all things that require an immediate response in order to prevent complete supply chain shutdowns. Now, think about most sales & operations planning (S&OP) workflows: focused on mid-term, quarterly or yearly cycles; designed to support longer-term goals like new product launches—quite simply, the opposite of immediate. Of course, S&OP is crucial to shaping a business’ mid-term strategy, but when disruptions hit there’s rarely time to wait for the next quarterly planning meeting in order to respond. As a result, without a secondary workflow to cover the weekly or monthly planning timeframe, the inherent risks in longer-term planning processes are significantly amplified.
Let’s say you and a coworker are attempting to find areas of waste in your supply chain. You have a large conference table on which you’ve laid a file that contains all of the transport plans utilized by the company for the past few years. When your coworker hypothesizes that a different grouping of goods would improve fuel efficiency, you need new documents with additional information, meaning that you have to leave the conference room and descend to the basement level where the files are kept. By the time you’ve returned, a new idea has occurred to your coworker, and you have to make a new trip to wherever your files are stored in order to retrieve the necessary information. The result of all this walking to and from the files? Some good cardio, but no plan to speak of.
Imagine for a moment that you’re planning to do some small renovations to expand your house. They’re straightforward enough that you can do all of the work yourself, but since you have a day job, you can only do the work at night. What’s the first thing you buy? If you answered floodlights, flashlights, or any other light-emitting piece of equipment, then you have the right mentality for success in the modern supply chain. After all, doing work on a house that you can’t see can be dangerous and inefficient. In the same way, trying to grow your business in spite of low visibility can prove not just difficult, but risky. To prove it, here are five way that end-to-end (E2E) supply chain visibility plays an important role in building a smarter, more efficient business.
In order to remain competitive in the world of modern manufacturing, production planners are constantly searching for new ways to derive more value from their operations. This impulse takes many forms, but one of the most common is striving to improve operational capacities, usually by either reducing makespan or improving machine utilization. Though the obvious benefits of increasing your throughput may seem tantalizing, the process of actually doing so is not as simple as ratcheting up production speed or buying new machines. Rather, it is a complex process that requires a high degree of visibility into your value stream. To help you tackle these complexities, here are 5 key strategies for improving operational capacities.
There’s no denying it: the pace of the global supply chain is getting quicker every day. Broad increases in connectivity have led to equally broad increases in customer expectations, meaning that when things inevitably diverge from expectations, it’s imperative that supply chain managers react swiftly and decisively. This growing need for lightning fast response times comes with increased pressure to build a value stream that is visible and connected enough to provide planners with the information that they need about existing operational plans and potential plan b’s—including inventory levels, transport routing information, and delivery requirements.