The tactical approach to industrial production planning
01/07/2023
Temps de lecture : 3min
In order to take a 360° look at industrial production planning, Michael Valentin, associate director at OPEO, is discussing with Thibaut Wilhelm, CEO of Oplit, the various needs and tactical axes of today's industrialists.
Supply management
On the tactical side, there is a topic that is obviously very hot right now, which is that of supplies. It’s very complicated because everything varies greatly, and almost every day a new crisis emerges.
To deal with this, the adaptability of your product can help as if you have internal capabilities that allow you to adapt your product based on the parts that are available, you will be much more agile. This is what Tesla did during the Covid crisis.
This is also what some players in the aerospace industry did. For example, chips were no longer available as well as semiconductors. They then worked on the design of their products to adapt them to the chips that were available on the market.
The other good practice that has been observed during this period is more of a good practice of a task force to source these rare parts. The idea is to have local resources where these parts are located, particularly in Asia, people who are sufficiently agile, who know the network, the local ecosystem well, and who are capable of continuously sourcing semiconductors to replace others, because it’s the only way to be agile.
The multi-site vision of load capacity and industrial performance
The multi-site vision of load capacity and performance is also a topic that we are working a lot on in heavy industry and then in consumer goods, especially cosmetics. The objective is to obtain a vision of all sites to be competitive and to compare similar processes across all sites.
And so, to ensure that we are at the top of our game at each site, and this is where the link with production planning comes in, is that if I am sufficiently agile, I will be able to, depending on the competitiveness of each site, decide to send products from one site to another in real time or at least within a fairly short time frame, to achieve the lowest production cost based on how my footprint is sized.
So this requires having both the indicators, working on them continuously, animating them, and then having the right planning process to take them into account when allocating load capacity.
And today, having the data that enables this is not as simple as it seems, and even the most advanced groups do not necessarily have this data.
There are few manufacturers who ultimately manage to have this consolidated vision of load capacity. The common field problems are different ERPs when we are a group resulting from a consolidation, different processes, different timelines between the various sites.
On the other hand, those who have managed to standardize even a bit their processes through a digital solution like Oplit, and to have this consolidated vision of ("which are the most efficient? Where do I have some slack in a specific area to transfer the load?") can achieve significant capacity gains in the medium term.
Indeed, each time we have worked on this topic, we have noticed it. It's really a potential for performance that is sometimes a bit masked because very often each site is managed differently; sometimes there are BUs above the sites and even regions that will manage a number of sites. And so all of this can be a bit clouded by the organization that siloes significantly. Local performance is often quite transparent while overall performance is less easy to manage. So having this overall vision is very powerful.
Reducing manufacturing lead times
Finally, a last tactical topic, not necessarily new but still relevant, is the reduction of manufacturing lead times. We see this a lot in the luxury sectors, watchmaking, jewelry, but generally in all consumer goods sectors. Because of course, agility means being able to react much faster to the market, therefore, it is necessary to have short cycles. Both in production and on the value chain.
So much so that we are even seeing reshoring initiatives in textiles at the moment. There is a lot of reflection around how to bring back the manufacturing of fabrics, threads that were previously made in China or Vietnam and then exported to Europe, in order to have a shorter global cycle.
Consequently, when a collection is created, it is not received in six months, but in one or two weeks, allowing one to quickly know what works in stores (a model somewhat like Zara) so as to be much more responsive.
This therefore concerns a complete value chain and then, on the scale of a site, we do a lot of transformation, particularly in watchmaking, where cycles range from nine months to sometimes two years to make a watch due to technical complexity.
And thanks to planning, we are moving to cycles that will last a few weeks or a few months. And this saves an enormous amount on work-in-progress and inventory. But it also saves a lot when we have accelerations or decelerations in the market because, consequently, we do not have those very significant costs in the supply chain generated by capacity load.
Indeed, at some point, we will have unoccupied resources. So we face almost social problems because we have too many people. And at other times, we need more skills, but we cannot recruit quickly enough. So if you have short cycles, you react much faster and therefore adapt much more quickly, in real-time.
So the less inventory I have, the fewer problems I have because inventory masks problems, thus preventing the right issues from being addressed, and furthermore, it has been proven that when you track the life of a part, the more inventory you have, the more the part will be moved because you have work-in-progress, so the part is taken to one place and brought back to others.
It turns out that the part is touched about twenty times in the same factory, you have around twenty load breaks for the same part, just because it has actually waited, there are orders that have arrived, other orders that have changed. It therefore undergoes all the fluctuations that you have in your demand. Whereas if you have a short cycle, you observe this phenomenon much less; you are much more linear in your production.
