The essentials of industrial production planning in 2023
03/07/2023
Temps de lecture : 2min
In order to take a 360° view on industrial production planning, Michael Valentin, associate director at OPEO, discusses with Thibaut Wilhelm, CEO of Oplit, the various needs and must-haves of today’s manufacturers.
Bring predictability to the current context through more efficient production planning
At OPEO, our opinion is that this is not going to change; in fact, it may even intensify. That is to say, we are in a world that is very uncertain, not even mentioning war, there is enormous instability, not least on the normative side, which changes regularly, and on the access to raw materials.
To cope with this, planning can be of great help. Traditional planning processes (PDP, Ordo) remain valid, but equipping with digital tools already allows for a more predictive approach to demand. We see quite a few groups working on demand predictability models and also on traceability of the upstream supply. Getting as much as possible into track and trace of what happens upstream, having the right processes to communicate with suppliers, but also, if possible, having the data that allows for tracing what happens on the upstream chain to tackle this volatility.
Sometimes, it is purely planning, but sometimes there are also business stakes because depending on the decisions made, given that the prices of raw materials have varied so much lately, in sectors like agri-food or metallurgy, the timing of when you buy your raw materials had a huge impact on downstream performance, even more impact than your industrial performance.
Therefore, it becomes all the more strategic, in a context where prices fluctuate enormously, to have this system that allows for being very reactive and increasingly predictive about demand.
Additionally, reassuring clients is also a major challenge, and we observe it with clients in two ways. There are many in the aerospace industry who request to see capacity load, and being able to show a simple capacity load by demonstrating what the client represents in the load and showing that we are confident we can accommodate it represents enormous commercial value. The other point is the ability to provide estimated delivery dates to clients.
This predictability in communication is truly a game changer in a customer-supplier relationship.
Finally, still regarding aerospace, it has been about ten or fifteen years that the supply chain has been structured to meet these needs, because it is a sector that is always lagging behind, but it is progressing! The companies in this value chain are efficient; it is simply the entire chain that produces this.
So it is a sector that has been structuring itself a lot for a long time but still has progress to make, although it is progressing. And there are many other sectors where it was not applicable before, and where after Covid, it has become valid like in the retail sector. Traditionally, it is the sector where the chain was very tight, where it functioned very well, except that these chains, with inflation and material shortages, have completely dislocated, and even now, there are constantly missing references, so predictability becomes important.
Real-time management of the workshop
On another crucial topic, there is the real-time management of the workshop. Everyone, especially those at the bottom of the chain, should know what the most optimized decision is for the company. So ideally, if we can have the technician or the production operator making the decision, that’s truly ideal. And afterward, the management system must also support that. Traditionally, with lean, we had a daily follow-up - the next day we would analyze the previous day's performance with volume and quality indicator data - but the more time goes on, the more we realize that the norm is to want to follow in real time.
This has become much the case post-COVID because during the crisis, we had a lot of managers asking us at OPEO, “I’m remote a part of my time, many of my resources, the support functions, are also remote, I only have the operators on the line, and even the team leaders sometimes weren’t there, so how do I get a view of the performance from home, on my smartphone?”
So that means we need to have either very efficient business intelligence systems or SaaS like Oplit or others in place that help with this. Depending on the topics, you need to have the toolbox that allows for this notion of real-time to both manage remotely or physically, but above all to react in real time because we want to solve problems.
Solving a problem in the factory is like a police investigation. If you arrive within the hour, you have ten times more chances of succeeding than the next day. Because actually, you will miss many elements, many clues. So one of the challenges for site managers is to be able to identify the location of the problem to go there immediately to help solve this issue.
Rethink your industrial strategy
Finally, regarding industrial strategy, we have recently had several cases of companies that asked us for help to rethink their strategy based on estimated developments regarding both demand and the geopolitical context. This is a real issue, in the medium to long term, but still important, which relies on the allocation of capacities. So it's both about where to establish production sites. So am I going to set one up in the US, for example, because if I think that Trump comes back to power, they will close the borders, so it's better that I have a site on-site to sell on-site.
This is therefore a subject, but there is also the issue of how to think about your base factory. Often this reflection has taken place regarding the product, so I designed my product in a modular way to be able to be agile, but I do not necessarily apply the same reflection to my industrial process and it is important to realize that if I produce, for example, chocolate, I actually have four or five main steps. What steps do I want to standardize regardless of the sites? And then what is specific to each product or each site that I can work on specifically and that I will buy at a higher cost but which will create value that I create on this product.
So having this reflection is extremely important because it allows for much more agility, to ask where to install capacities, the parts of its process.
The integration dimension is also an issue. This is what gives Tesla its strength. They are integrated. And indeed, when we approach this topic in general, we also ask the question of make or buy because it has changed a lot recently, with everything we have discussed. And sometimes there is a strategic interest in reintegrating things that were external to be more agile in the market.
