We’ve talked in a great length on this blog about the elements of effective global supply chain management and the implications thereof. But while these are important discussions to have as manufacturing companies work to expand their footprint and growth their customer base, at the end of the day the developments in supply chain management only really matter insofar as they add business value for these manufacturing companies. Advancements in procurement, production planning, job allocation, and transportation management must equal enhanced business value for each partner stage in a production network or else these aspects are simply window dressing designed to give the appearance of lean production principles.

One of the most valuable assets manufacturing companies can utilize to increase business value is the idea of sales and operations execution (S&OE). Though something of a recent concept in global supply chain logistics, S&OE is a powerful piece of planning capability planners and managers can deploy to increase the efficacy of their planning and production programs, as well as enhance a number of other critical functions across the value stream such as resource and material procurement, optimized inventory management, and even job shop scheduling and job allocation. 

It’s a big concept both in terms of importance and how many elements of global supply chain management under which it encompasses. We’re talking about risk and the factors manufacturing companies must address and combat to ensure stability and reduce the amount of uncertainty in a globally-competitive, variant-rich landscape. No matter how diligently planners and managers work to curtail this uncertainty, risk in a variety of forms can plague companies across the entire value chain, everything from planning and procurement to production and transport logistics.

All this being said, there are a number of strategies, solutions, and principles manufacturing companies can deploy and integrate to reduce the level of risk in a cross-organizational manner that also helps to increase productivity and enhance efficiencies.

Today’s blog entry features a fascinating conversation with flexis AG Vice President of Manufacturing and Logistics Robert Recknagel. As a thought-leader in the supply chain landscape with more than 10 years of experience in operational supply chain management, software concepts and optimization design, Recknagel provided us a glimpse into the key conversations, discussions, and concerns manufacturing companies are addressing in today’s global manufacturing landscape. Recknagel’s work with flexis has largely focussed on helping companies administer their supply networks as efficiently and productivity as possible, which uniquely positions him to shed light on the challenges and opportunities today’s manufacturers see each and every day.

Nick Ostdick: There’s a lot of information in today’s supply chain about Industry 4.0. Can you clarify a little bit about what Industry 4.0 means for the manufacturing supply chain and how companies should be looking to implement this technology platform?

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.

If there’s one fear shared by nearly all manufacturing supply chain planners and managers, it’s disruption. Small or large-scale breakdowns in the movement and flow of products or component parts from Point A to Point B. Every year, manufacturing companies 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.

No matter the size or impact of the disruption,  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 a manufacturing company 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 manufacturing companies to encounter disruptions or breakdowns at more touch points across their supply network.

Planning. Replanning. Forecasting. What-if scenarios. Data gathering and analysis.

These are the tools, strategies, and methods modern manufacturing companies have at their disposal to ensure production facilities optimize their inventory, allocate jobs efficiently, pull component parts from containers, and move finished products from the production floor to the customer’s door on-time and within delivery windows. 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.

Competition. More so than ever before, today’s manufacturing companies are facing increasingly intense competition in an ever-expanding global marketplace. With new and emerging markets coming online in disparate parts of the globe, today’s manufacturing and supply network is growing more diverse, complex, and intertwined, and manufacturing companies need more powerful, integrated, and intelligent solutions to cut this complexity and maintain the efficacy of their planning and production programs.

Enter advanced analytics and its ability to give manufacturing companies the insight and visibility into their overall supply and production platforms. With an endgame of helping manufacturing companies analyze and sort data, streamline processes, and increase the efficiency of planning and production programs, advanced analytics is a critical value proposition in a variant-rich industry where network partners operate at numerous disparate points across the globe. Because advanced analytics relies in large part on the adoption of intelligent technologies or solutions like Industry 4.0, Big Data, and The Internet of Things (IOT), planners and managers have the ability to put large amounts of data and reporting to work to leverage lean manufacturing principles for greater derived value.

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.

Overhauling your global supply chain management and logistical platform can sure seem like a daunting concept. A holistic rethinking of how and why your planning and production programs function can not only be costly and time-consuming, but it can also reveal new pain points previously unrealized that can pose significant hurdles for planners and managers in executing daily, weekly, and monthly operations.

However, as digitization across the global supply network becomes more of a necessity, it is important for planners and managers to assess the challenges and risks associated with overhauling their supply pipelines to conform to a more digital platform. Digitizing your supply chain can be challenging, especially for manufacturing companies still reliant on manual inputs and spreadsheet models, but the benefits far outweigh the cost, time, and resources required to bring your supply chain into the digital age.

Today’s integrated supply chain is based on data. Big Data, advanced analytics, S&OE reporting, and other forms of information are the vehicle which drives planners and managers to execute planning strategies and platforms for the best overall results both in productivity and profitability. But heaps of data without any real concrete plan for analysis or evaluation is essentially like having a detailed map without any real sense of where you need to go. Without any sense of direction or end destination, even the most advanced map will be of no use in helping you complete your journey.

As such, one of the key differentiators for manufacturing companies in today’s global manufacturing landscape is data analysis and how companies leverage insights from this analysis to drive more efficient planning and production and create stronger links between various parts of the production sequence. Especially for manufacturing companies in variant-rich fields like the automotive industry, data analysis not only gives companies a 360 degree view of their overall production and supply situation, but it also helps foster three of the most important factors in global supply chain management: visibility, agility, and flexibility.