The world has drastically changed for discrete manufacturing, and only now are many organisations realising that they haven’t driven sufficient innovation in their supply chains to respond to these challenges.
If asked “what do you feel is the biggest threat to manufacturing organisations in 2019?”, you might suggest any of the following:
- The increased need for product customisations
- More pressure than ever to get to market faster than the competition
- The logistics challenge of global supply chains
It’s becoming very real for a lot of manufacturers, with rising prices for materials, labour and energy, it’s hitting boiling point. Organisations are under enormous pressure, to do more with less, and faster. But for many of these organisations, the answers lie within effectively managing control, visibility and agility.
Why you need to address supply chain visibility
There is an increased expectation from customers to be able to meet demands quicker and more cost effectively. Visibility of where manufacturers are within the production process is a key driver and control for an organisation.
Organisations who have a detailed overview of every step of the production process are doing so by enabling machine integration with business applications. Without this integration, there is potential for reduced machine utilisation, less effective enterprise resource planning, reduced consistency in product quality and many business performance fundamentals.
Increased costs have resulted in a number of manufacturing entities with growing dependencies within their supply chain. The result of this is relationships becoming less transparent, and systems being disparate.
This has a knock-on effect for supply chain visibility, and when you throw subcontracting into the mix, finding out where a product is in the cycle and accessing accurate reporting becomes even more challenging.
Ultimately what this results in is a lack of order status visibility. Though in many organisations this is accepted as a ‘black hole’, it causes problematic areas for customers and can make meeting delivery dates impossible.
Integration between these disparate systems is the only way manufacturers are addressing supply chain visibility issues.
Managing control across product variations with automation
More than ever, product variations mixed with ever increasing complexities, are making sure organisations keep on their toes. From procurement to quality, control is the anchor of all processes.
But to maintain control of complex production planning, you need a combination of flexibility and speed. One way to address this challenge is to drive automated processes in the production line that can be responsive to variable demand.
Without this in place, managing control in product variation can throw up a number of challenges:
- Security: with a large uptake of siloed legacy systems needing to talk to each other, breaches become more likely. There’s a desperate need for faster material requirements planning within one system where security is centrally managed
- Mis-managed variation: Products and services have moved away from being standardised and new introductions much more frequent. There is a risk of overstocking the business to cope with demand for one variation, but then the requirements change shortly after – hence the need for both flexibility and speed
Automating functions bring more effective control in a number of core business processes.
For example, by automating background jobs between planning and execution, you can drive greater visibility over production lines, ensuring that the right materials are available and the orders are correctly sequenced before coordinating the production floor.
When working with highly variable product lines, the ability to autorun availability checks, perform capacity levelling and auto print production orders ultimately helps you to maximise usage and be more efficient.
The right technology enables agile and responsive supply chain management
Change and uncertainty are inevitable in manufacturing. Whilst effective production planning can support, there will always be factors outside of your control. Changes in people resources, system configuration, supply chain itself and machine downtimes can have serious consequences.
Though many manufacturers face these challenges every day, only a small number are realising the competitive advantage of automation and innovation.
The right technology stack is critical in manufacturing to:
- Enable responsive production planning and cope with variation
- Integrate systems and have visibility over the full supply chain – however disparate it may be
- Reducing reliance on subcontracting and using resources more effectively
How to address the challenge
There are many different approaches out there to aligning technology to address the challenges in front of us, drive value and enable strategic objectives. This can be distilled into a number of key areas:
- An integrated Enterprise Solution – On premise or cloud based depending on organisational imperatives
- Aligned analytics and Data Governance solutions
- Industry based , best of breed solutions, where specialist capabilities are required
- The right Integration support across – Harness operational information in the most effective way and embrace innovation
To put this in a more technology biased language, a way of labelling this is “the intelligent enterprise”. In short this means a technology stack that has been developed to align and enable the specifics of the business in question across four areas:
- Data Management
- Business Cloud Platform
- Intelligent Technologies
The diagram below illustrates this in a generic way:
Coping with change and uncertainty is more than manageable with the right foundations in place.
Written by Richard Seel, Managing Director, Delaware North America
Richard Seel is experienced in shaping the business and large project environments for the delivery of best-in-class SAP global solutions. With more than 25 years’ of experience with SAP software, Richard has been involved in the management, design, and implementation of supply chain solutions for large global manufacturing organisations and is now leading the delivery of supply chain and warehouse solutions within delaware.
With his SAP design and delivery experience and industry knowledge on the food and beverage, aerospace, automotive and supply chain industries knowledge, Richard helping companies fully integrate solutions into the way they operate, ensuring that measurable and sustainable outcomes are delivered.
Richard’s Global customers have included: Kraft Foods, Carlsberg Tetley, Britvic, Johnson Matthey, Textron and The Boeing Company.