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?

Understanding the relationship between S&OP and S&OE is akin to the novel versus the short story. With the novel, an author more often than not takes the long view of the narrative, spanning large swatches of time with a multitude of characters in order to tell a fully-realized, fleshed-out, and satisfying story. On the other hand, a short story is a much more compressed form of narrative where the author focuses on one, two, or maybe three characters in a more narrow window of time with a specific set of themes, tropes, or conceits in order to give the reader a mere glimpse into the lives of those inhabiting the story.

Both of these narrative modes rely on similar principles of storytelling, but they deploy those principles in slightly different ways for a desired impact - the novel a more long-term, wide-ranging look at a world, and the short story a more compact, micro view of characters, situations, and contexts. The similarities and differences between the novel and the short story mirrors essentially the relationship between S&OP and S&OE in today’s global manufacturing and supply chain. S&OP allows manufacturing companies to create integrated demand planning between sales and production teams for the short to mid-term (the novel game) while S&OE gives planners and managers the capacity to examine their supply situation on a more micro level (the short story).

In today’s global, interconnected supply chain, the technology and software solutions a manufacturer deploys are just as important as a company’s supply logistics and management strategies. Because so many of the critical actions and decisions in the supply stream take place in a digital environment, the right technology can either propel a manufacturer toward robust growth and productivity or relegate them to a static position of efficiency. In short, identifying the right supply chain technology for a specific supply network model can be a make or break decision for companies competing on a global stage.

The right people. The right time. The right resources. The right place.

In today’s global automotive industry, supply chains function most efficiently when all the major elements are integrated from end-to-end. Because so much of the modern supply stream consists of disparate production networks, complex partnerships, and markets and customer pools spread out across the globe, the ability to coordinate the people, processes, and products critical to effective supply chain management is key in such a variant-rich industry.

Whether it’s the sourcing of raw materials, assignment of planned production programs, transportation and warehousing, or delivery and customer management, companies in today’s automotive industry have realized the value-added proposition in integrating their supply chain across all touch points in order to fully control their overall supply situation and gain valuable insight into the functionality and efficiency of their value chain.

Blink and you might miss it. That’s the sentiment about the evolution of today’s global manufacturing supply chain during the last decade. With a seemingly constant introduction of new technological platforms, supply chain management strategies, and major players in the supply stream, some could argue the supply chain landscape barely resembles that of the field of play a mere ten years ago. Perhaps this is one of the core drivers for why speed and agility are two of the most prized abilities for manufacturing companies in today’s supply pipeline.

But with so much progress so quickly, it can be easy to lose sight of the major advancements in supply chain management during the last ten years that have led us to where we are today. Industry analysts and experts advise the supply chain of the very near future might resemble very little the supply stream of today, and in order to successfully get where you’re going, you have to have a comprehensive knowledge of where you’ve been.

The introduction of advanced analytics into today’s global manufacturing pipeline has provided planners and managers with a number of critical value propositions in leveraging enhanced reporting and metrics for reaching business outcomes and goals. Yet one of the most valuable applications of advanced analytics exists not on the side of revenue and profitability, but in the realm of reducing the risks involved with administering a global supply network.

Because so much of today’s manufacturing industry exists in a variant-rich environment with network partners spread over disparate parts of the globe, the likelihood for significant disruptions or bottlenecks in the supply stream is ever-increasing. With a reliance on intelligent, integrated technology platforms and movements like Industry 4.0 and Big Data, advanced analytics gives manufacturing companies the capacity to review large pools of data in real-time to make critical adjustments to planning and production programs to avoid costly breakdowns across key areas of the value chain.

There are some terms or concepts in today’s modern supply chain management landscape that even industry insiders have difficulty defining or understanding. Whether it’s because the lack of visibility surrounding these concepts or a failure to fully embrace them as part of lean manufacturing and supply chain management, postmodern ERP is perhaps one of the most least understood or realized element of manufacturing and supply logistics. Not only does postmodern ERP have the potential to transform a company’s manufacturing and supply logistics, but it’s a key element in cutting the complexity of global supply chain management and leveraging enhanced operational functionality.

The question becomes: Why is postmodern ERP such an important value proposition for global manufacturing companies lacking visibility and understanding? What is it about postmodern ERP that proves difficult for planners and managers to embrace? What do we mean when we use the term postmodern ERP?

In today’s modern manufacturing landscape, the last vestige of outdated or antiquated practices is the Excel spreadsheet. Once used as a way to organize, track, share, and analyze data, the spreadsheet has long outlived its usefulness in modern planning and production schemes. The manual input and human intervention needed to facilitate effective spreadsheet use has been replaced by real-time process automation in an effort to streamline planning and production processes and increase overall efficiency.

However, S&OE (sales and operations execution) is one strategy too many manufacturing companies deploy via the spreadsheet. Though a relatively new concept in supply chain planning and management, S&OE has, in large part due to its ability to glimpse the planning and production sequence on a micro, daily level, defaulted to the spreadsheet as the primary mode of operation.