Have you ever headed out for a family picnic, only to arrive and find your favorite meadow has been dug up to make way for a new housing development? Or left the house for a walk, and had it start pouring rain once you were ½ mile away? Did you have a contingency plan for that picnic, a backup location already selected? Were you carrying a raincoat in your backpack on that walk? These are examples of real-time planning in the regular world, but the concept transfers directly into the manufacturing realm in the form of being able to adjust and pivot as necessary. This real-time planning ability relies on more accurate demand forecasts, better visibility into the production line, and greater reporting functionality. In order for your company’s APS (advanced planning and scheduling) to be effective, let alone real-time, there are some contingencies that you’ll need to take into account.
Has your supply chain management situation changed recently? We’d wager it has. With the introduction of Industry 4.0 technologies to the value chain over the last few years, things have been changing at an ever-increasing pace. Where once there were information silos, spreadsheets, and clipboards, now there are SCMS solutions, AI-powered advanced analytics, and IoT sensors. Rather than being the purview of autonomous managers acting in their own departments’ best interests, there are CSOs (chief supply chain officers) acting in the best interest of the whole company. And along with that shift has come a renewed understanding that the company’s best interest is generally synonymous with the customer’s.
How are you using your ERP software? Strictly for resource planning, as intended? Or are you stretching that definition to include aspects of your supply chain management needs as well? ERP solutions are an offshoot of financial software, and most of it functions as such and can be clunky when pressed into alternative uses. A dedicated SCM software solution, on the other hand, is as flexible and multifunctional as your supply chain itself. Think of it like this: would you rather build your personal daily calendar out of an Excel spreadsheet, which is totally doable, or just use a ready-made calendar tool like Google Calendar? Yes, both are workable solutions, but only one is actually made to help you keep track of lunch dates and offer reminders for those important meetings you just can’t miss.
Whether you're creating a more synergistic relationship with a supplier of raw materials as an auto manufacturer or developing special relationships with retailers to improve the performance of your packaged consumer goods, collaborative supply chain partnerships often feel like the holy grails of the modern value stream. This is with good reason: a strong partnership in which information, risk, and benefits are shared equitably can add real value on both sides of the relationship in the form of reduced costs, smarter forecasting, or any number of other benefits. It's easy to see why people are willing to devote time and mental energy to it.
Imagine you’re hosting the family reunion this year. 75 people are going to be expecting a great venue, amazing food, and some planned activities. But you’re just one person, with some help from your girlfriend. Are you going to cook all the food, decorate the community hall, schedule and set up for the band, AND be there to greet everyone as they arrive? I certainly hope not. You’re going to hire a caterer for the food, be sure the band brings their own crew to set up and tear down the stage, and rope your girlfriend into being the greeter so you can still supervise the proceedings. On the other hand, if you’ve got a wife, 3 grown kids with their own significant others, and a circle of close friends, maybe you can do it all in-house. This is the power of outsourcing, it keeps the playing field even for even the smaller players. The question is—how do you maintain control over the cooks, musicians, crew, and cousins?
Consumer financial technology has reached a tipping point where pretty much everything you need to do on a regular basis can be done electronically. You can pay the rent, make a car payment, and even lend your friend $20 all from the convenience of an app on your smartphone. Then there’s that one payment, you know the one, when you have to dig around in your desk drawer to find your checkbook. At its core, supply chain integration does for you, the production planner, what eliminating the checkbook does for the general population, speeds up transactions and allows every relevant stakeholder access to the information they need. It’s about enabling your entire end-to-end supply chain to interact and interconnect via Industry 4.0 technologies. Because no matter how much of that tech you have deployed internally, if your supplier is still presenting you with a handwritten invoice—well, it just doesn’t add up.
You know that one product that seems to be in every outgoing order? The one kept all the way in the corner of warehouse 2, opposite from the loading dock? How much is it costing you to keep sending the forklift across 10,000 square feet of warehouse, multiple times per day? What if you moved that item to an empty bay 2 rows away from the docks? How much time, energy, and money would that save your logistics budget? If you don’t know the answer to any of these questions, it’s time to take a good, hard look at the logistics end of your supply chain to weed out the wasteful spending and tighten things up a bit. To get you started, we’ve pulled together a list of our top 5 areas of waste in supply chain logistics. If you can get these under control, you’ll be well on your way to a streamlined value chain and much-improved logistics ROI.
Are you ready for a digital supply chain? Industry 4.0 is revolutionizing the manufacturing end, while its offshoot Logistics 4.0 is doing the same for the shipping end of the chain. But what about all the connecting pieces in the middle? Is your company ready to adopt the technologies and techniques that will fully digitize your end-to-end supply chain, or are you still using pen and paper to track your warehouse inventory? With the continued adoption of these technologies, the future of the supply chain is going digital, and there are a number of reasons digital will rule. Already, we’re seeing major inroads on the part of IoT sensors, RFID tags, smart pallets and GPS tracking leading the charge. Is your company ready to adopt and adapt? Or will you find yourself left behind as your competitors step into the digital gap?
One of the most common metaphors you hear for forecasting in supply chain management is that it’s like the rear-view mirror in your car: you need to understand what’s happening behind you, but it’s not necessarily enough information to keep you slamming into the car in front of you. As the supply chain has evolved, however, forecasting has evolved along with it. So, for that matter, have cars: in the modern supply chain, forecasting can encompass not just the rear-view mirror, but the back-up camera, and even the smart sensors that alert you when you’re getting too close to another car.
These new processes that move beyond the scope of the rear view mirror use technology to take in additional information, and then spit out new insights for the driver to use—from immediate course-correct notifications to more granular data about when you’re going to hit the curb while parallel parking. In each case, digitization has played a big role in giving you a more comprehensive overview of events that are about to take place. In an industrial context, we might think of these digital enhancements as things like IoT (internet of things) devices and other smart sensors that provide live information to planners. In this way, forecasting becomes more thoroughly integrated into the way that businesses make decisions and optimize their supply chain management. And it’s lucky for us that it does so, because accurate forecasts are becoming more important than ever in the world of supply chain planning.
The automotive industry is no stranger to technology. It’s also no stranger to the rapid pace of change that’s overtaken global manufacturing in the early 21st-century. And when it comes to planning and organizing your entire automotive supply chain, advanced planning and scheduling (APS) is the key that will unlock increased ROI and decreased lag times. APS represents a sea change from traditional methods that looked at materials and production capacity as separate things, a view that often led to incompatible plans. Adoption rates of APS in the automotive sector are on the rise, paralleling the rise of make-to-order and additive manufacturing; and the increasing complexity of the automotive manufacturing world as a whole. And it’s that last factor that we’re going to focus on today, the increasing complexity of the automotive world and how APS can help. Whether by assisting with inventory leveling or by helping planners better schedule materials deliveries, APS can be a boon at every stage of the automotive manufacturing supply chain.