Anyone remodeling a home, shopping for a new car or trying to buy pretty much anything with a computer chip in it knows that many industries are currently grappling with significant supply chain disruptions. Companies that just a year ago were plotting a course to survive a total economic shutdown are now scrambling to benefit from agile supply chains that can keep up with the demands of a recovery that occurred much faster than many anticipated. Demand is now outpacing the recovery in supply.
Supply chain shortages haven’t received this much attention from the general media since the energy shortages of the 1970’s. It seems it took a global pandemic to bring to bear key vulnerabilities in our lean supply chains. In fact, the problem is so large, the White House has taken notice and recently created a supply chain disruption task force to address short-term supply chain discontinuities in critical industries.
To meet current challenges, supply chain planners and schedulers must find ways to become more agile to maximize the return on their capital assets. In those rare instances where lengthy production runs, large inventories, long lead times and limited process variation are the norm, ERP and spreadsheet solutions may suffice. Unfortunately, today’s global economy requires agile supply chain tools that offer flexibility and advance planning analytics.
Supply chain agility for improved yields
Many schedulers are now facing an unprecedented shortage of key raw materials. The global nature of the pandemic has all but eliminated the option of simply selecting alternate suppliers. This scarcity of raw materials makes it vitally important to eliminate as much waste from the process as possible. Production yields are often substantially impacted by the sequencing of material batches or, in the case of multi-output operations, by the way co-products are combined (i.e. the cutting stock problem in paper and metals). Determining an optimal sequence or combination typically involves complex calculations and the ability to perform these calculations in a quick, agile manner. Agile supply chain planning tools help teams consider all relevant variables and automate the scheduling process.
Supply chain agility for increased throughput
The global economy is reopening in bits and pieces. The return to full production capacity is occurring at different rates in different regions, forcing planners to do more with less. Labor is still in short supply in many areas, meaning that some production lines may have to remain idle. Additionally, transportation delays have become common, placing additional pressure on manufacturing lead times. Advanced scheduling systems make it possible to generate a production sequence that minimizes costly changeovers while optimizing bottlenecks to achieve the desired balance between production efficiencies, inventory levels and delivery compliance.
Supply chain agility for scenario analysis
Given the dynamic uncertainties of the current economy, planners and schedulers must be able to simulate a range of scenarios and solutions quickly and easily. The best agile scheduling tools make it possible to model various “what-if” scenarios and to visualize the likely impact of disruptive events that may occur. They also allow the planner to evaluate and choose from alternative versions of a production schedule. The ability to see how alternative solutions will perform under a variety of favorable and unfavorable conditions provides crucial information required for adequate contingency planning.
Supply chain agility for scheduling flexibility
Once an optimized schedule has been generated, it rarely remains static. Expected raw materials may not arrive on time. Customers may request expedited processing. Production lines may experience unscheduled downtime. In many cases, these disruptions will have been explored through scenario analysis and the best response predetermined, but not every disruption can be anticipated.
The need to make last minute scheduling changes is certainly not new but for many planners it has lately become the norm rather than the exception. A small change in the scheduling of a single production activity can often have a ripple effect on upstream and downstream processes and may affect multiple delivery dates. Without advanced scheduling software the full impact of such a change may not be obvious. The right agile tools can give schedulers the dexterity needed to make required last-minute schedule adjustments, quickly re-optimize the overall production plan and easily identify all resulting impacts.
Companies with moderately to substantially complex production processes typically benefit from agile supply chain planning and scheduling applications. Effective use of these tools almost always leads to improved efficiencies and higher levels of customer service. While the unique challenges created by the global pandemic are transitory, consensus on when things will return to normal is lacking. We are now seeing companies that have the right agile tools in place are better positioned to achieve the needed balance between supply chain efficiency and supply chain resiliency.
If you’re interested in learning more about creating an agile supply chain, read our Agile White Paper, or drop me a note at srollins@profitpt.com.