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?
A friend of mine once told me he wouldn’t eat in any restaurant where he couldn’t see into the kitchen. What he was getting at is that you never know what’s going on behind closed doors, and he doesn’t want to eat anything he can’t see being prepared. Now imagine your supply chain is that restaurant kitchen, do you know what’s going on behind the closed doors of your manufacturing, business, and logistics processes? Visibility into the end-to-end supply chain is something that every production planner and logistics manager wants, yet few seem to achieve. And like that restaurant kitchen, what’s lurking behind the scenes can impact your customer’s satisfaction and therefore your bottom line.
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?
We tend to think of the (first) industrial revolution as a moment where the world changed in the blink of an eye. One morning, the world was dominated by cottage industries, and the next, steam power had completely transformed the nature of commerce, manufacturing, and modern life. What we sometimes forget is that the period we think of as the industrial revolution actually lasted more than 60 years—more than the length of a human life span during that era. Sure, things move a lot more quickly now, but it’s still a nice reminder that for all the talk about Industry 4.0 (aka the fourth industrial revolution), nothing happens overnight. The process of factories getting more connected and supply chains going digital might not take 60 years, but in the meantime it still remains a work in progress. That said, it's increasingly likely that the rewards will be worth the challenges.
Modern day supply chain management is often about finding reductions in costs, expenditures, wasted resources, or misallocations in how raw materials are spread across complex manufacturing networks and value chains. But this worldview often neglects or places little value on the fact that supply chains in and of themselves can be a key driver in affecting growth, increasing revenue, creating business moments, and forging new partner networks or footprint expansion.
But, as with almost anything in modern SCM (supply chain management), such achievements are often more easily discussed than realized. However, that doesn’t mean manufacturing companies don’t have the tools necessary to transform their supply streams from merely a vessel of procurement and product distribution into an important vehicle for engineering long-term, sustainable growth and productivity. Forward-thinking planners and managers can, with relatively minor adjustments to their SCM strategy, create a supply stream with the power to not only drive growth and innovation, but also the capacity to generate real revenue for companies in an increasingly competitive marketplace.
Imagine this scenario: A part inside the engine of John’s car breaks down and prevents the car from starting properly. John engages a function on the car’s console that then sends the specifications of the component part to a local auto part store that then alerts John the store is currently out of the necessary part.
At this point, the store’s inventory management system sends an alert to a regional manufacturer that then engages a shipment of replacement stock to the store or the individual part directly to John’s house. John can then track the shipment of the part in order to know when it will arrive and in what condition to best schedule an appointment with a repair shop to install the replacement part - in fact, the car might actually be able to schedule the service with a nearest auto repair shop based on location, customer reviews, or other criteria John chooses to input.
As we start the new year, those in the automotive supply chain industry are turning their eyes away from the past year and more toward what the next 12 months could hold for OEMs, suppliers, and others in the supply stream. 2017 proved to be the year of technology. Big Data, Industry 4.0, The Internet of Things, and other advancements in data collection were the engines of change and development throughout the automotive industry. The development of these technologies was pushed further by the emergence of new markets and production hubs across the globe, further expanding and diversifying an already variant-rich industry.
We recently discussed some of the biggest takeaways in supply chain management from the past year, but now the question becomes: What’s in store for 2018? What are the questions, conversations, and concerns supply chain planners and managers will be addressing this coming year? What are the topics of greatest importance to an industry that continues to grow, expand, and change at a breakneck pace?
While there isn’t a magical crystal ball for planners and managers to divine predictions, we can certainly make a few educated guesses as to what planners and managers will be concerned with in 2018, and how these issues might shape the automotive supply chain for the next year and beyond.
With the advent of advanced analytics and accompanying technology, the supply chain is evolving perhaps more rapidly than ever before. Here's a look at five key trends that illustrate where the industry is heading in the next year, and beyond.
Topics: Supply Chain Trends
As the year comes to a close, many OEMs and other major players in automotive supply chain start to reflect on the last 12 months with an eye toward insight and enlightenment on the concerns, considerations, and lessons learned throughout the year. This not only helps companies best prepare for the coming year in terms of predicting possible trends, challenges, or opportunities, but it also helps those in the supply chain evaluate how efficiently they responded to this year’s challenges and opportunities - how agile, transparent, and visible they truly are.
Without doubt, 2016 was a busy year for automotive supply chain professionals. Technology, expansion into new and emerging markets, political and financial instability across a number of major European regions, and other issues provided OEMs with a host of top-tier concerns from which to respond and react in order to keep the supply chain clear of bottlenecks and ensure continued production.
It’s the center of so many fairy tales: a character peers into a crystal ball to catch a glimpse of his or her future. While this usually has disastrous consequences for the character, the ability to look into the future and make accurate, sound predictions is a key driver for OEMs and other suppliers in today’s automotive supply chain. Advanced modeling, forecasting, and predictions based on previous demand and data provide planners and managers with a number of competitive advantages in creating precise demand planning strategies for efficient production programs.
But how do planners and managers cultivate these highly-detailed demand planning schemes? What methods are at their disposal to create modeling and forecasts whereby customer orders can be aligned with production facility capacity and programs to adequate part coverage and reliable delivery? In other words, what kind of crystal ball can planners look into in order to see their future?