The following is a continuation of a supply chain technology thought leadership education series developed in collaboration with Replan.
Supply Chain Matters provides the fourth in a multi-part series addressing the renewed importance of production planning and scheduling in this existing uncertain and constantly changing business environment.
This update addresses manufacturing business strategies aimed at Industry 4.0 and subsequent supply chain, operational and shop-floor planning and scheduling needs related to process focused manufacturing.
Background and Series Initial Takeaways
In Part One of this market education series, our reader takeaways were the following:
- After two plus years of continuous pandemic driven and industry focused supply chain related disruptions, 2023 and beyond requires supply chain and manufacturing management teams to have a keener focus on Adaptation, Realignment and Response to likely continued business and economic uncertainties, geopolitical and macroeconomic forces.
- Such an environment requires manufacturing and supply chain processes to be able to more proactively sense, pivot and respond to constant or rapidly changing market conditions. Production facility planning challenges occur when attempting to react, in a timely manner, to changing customer or product needs without a disciplined planning context.
- Removing predominately manual efforts at this level enables companies to respond faster and instills greater supply chain agility and resilience at the production level. The opportunity to overcoming ongoing market or supply chain driven disruptions in this new normal is augmenting planning and scheduling at the production level, instilling more synchronized planning and reducing the feedback loop between planning, scheduling and operational execution processes.
In the Part Two commentary of this series, we advocated that manufacturers initially understand and address the various business transformational goals and objectives established across strategic, tactical and day-to-day operational planning and control processes. The objective is to manage outcomes in the context of where agility or planning actions have the most leverage for instilling more integrated business planning. The most important consideration in this exercise is identifying, remediating and rationalizing constraints where they have the most influence toward overall plan performance.
In the Part Three commentary in this series, we specifically addressed the talent challenges in transforming production planning and scheduling applications within process focused production. Our key takeaways were:
- Production planners need to be given added technology tools that can address the complexity and variabilities of constantly changing supply chain environments and support ever changing operational decision-making needs in a far more timely and context aware manner.
- Educating senior management on necessary organizational change management considerations need to address why transforming operational planning processes are so urgent, especially in the ongoing war for future talent and flexible skill sets.
- Organizational leaders are becoming more attuned to the new reality that planner skills are and will constantly change over time, moving beyond extraction and assimilation of data and into more strategist and decision analysis capability skills.
Industry and Manufacturing 4.0 Transformation
Industry 4.0 refers to a broad umbrella of manufacturing processes, practices and decision-making directed at transforming how global and domestic production and supply networks undergo digital transformation. The term is often associated with the notions of businesses benefiting from the fourth industrial revolution. A further term connotates the manifestation of factory-of-the-future capabilities for enhanced industry competitiveness.
Industry and manufacturing 4.0 is the coming together of physical, digital and information analytics practices and enabling technology aimed at transforming business processes, planning and decision-making capabilities.
In a physical sense, it is interaction of machines with humans enabled by technologies such as advanced robotics or Internet-of-Things connected machines or assets. In a digital sense, it is the digitization of business processes, data harmonization and software applications, and from a decision-making perspective, advanced analytics, artificial intelligence and machine-learning technologies supporting more intelligent and automated decision-making.
Industry 4.0 efforts begin with vision, business model strategic objectives and identified business value dimension being sought including scope of automation and desired control. The framework should be the connection of strategy, planning and operations with automated digital processes. Use of advanced algorithms to automate planning (potentially even leading to lights out planning). But in the shorter term, it means planners can access and use actual manufacturing data (such as run rates) when planning, and schedulers can get live data on machine performance when considering how schedules need to change during a day.
Process Manufacturing Added Considerations
It is important to further consider the differences associated with batch or continuous process focused manufacturing which are production methods utilized to produce a product from various powder, fluid or compound raw materials. Examples can be food or beverage products, chemicals, pharmaceuticals and drugs. Production can consist of mixing, curing or blending and are dependent on internal or external variability factors.
Planning must consider product composition, recipe or a controlled formulation managed by a production operations systems. Accounting for availability of specific machines, waste or production yield or are an important planning consideration. Specific process rules or formulas govern the production process and the sequence in which products are made. The process industry term for control of such processes is a Production Wheel, which require dynamic algorithms to be able to optimize needed capacity, machine scheduling or changeover needs
Batch process production can sometimes feed discrete manufacturing processes such as product bottling, packaging where production attributes such as line capacity, line speed, product variability and quality control are shared. Manufacturing execution systems (MES) may be involved at this stage and data elements often need to be shared.
An important consideration for planning and operations management teams in supporting production planning transformation starts with the ability to connect production focused data siloes. They can be various existing planning processes, or data generated from existing manufacturing resources planning (MRP) or manufacturing execution systems (MES). It is further the ability to allow planners the ability to visualize large amounts of data in more simplified way and to understand, identify and resolve production line or factory constraints in a far more timely manner
Digital Transformation of Production
Digital transformation of production is the capability to connect tactical and operational level supply and production planning processes and associated data streams. It requires the ability to control, synthesize and digitize the information elements that provide end-to-end control of production processes. As an example, annual or mid-range planning primarily deals with broader product information typically at a family level. Operational production planning, scheduling and process control systems must manage the more detailed item variability of specific product characteristics, formula or packaging needs. The goal is synchronization and more context aware decision-making among all planning processes.
From a technology enablement perspective, transformative planning can be accomplished by the leveraging of a Cloud based Digital Twin coupled with artificial intelligence and machine learning capabilities to proactively identify and correct plan exceptions. As noted, an intuitive and responsive interface should be able to provide planners with the ability to focus on assuring plan performance, provide more timely situational awareness and the ability to be able to guide production process execution.
The business benefits of Industry 4.0 related to supply chain and production planning are meaningful to business performance outcomes.
In this new normal of business and industry competitiveness, manufacturers should be able to more proactively sense, pivot and respond to constantly changing market, supply network or production conditions. After three plus years of pandemic related disruptions or added market opportunities, boardrooms and C-Suite executives expect and are tasking operations teams to transform existing supply chain and production processes for enhanced agility and responsiveness. As an example, if an untimely or unplanned shortage of raw materials or product packaging occurs, what other options can be considered in either substituting other more available materials or switching production lines to another region that might have the needed inventory.
Senior management further expects a focus a continuous focus on opportunities for reduction in overall operational costs through greater production efficiencies with less inventory and waste.
Industry 4.0 capabilities have the most impact when directed at identifying, remediating and overcoming constraints that have the most impact on business outcome performance such as customer service, cost of goods sold, product margins and profitability.
Collectively, from an IT strategy perspective, it is the ability to better integrate and synchronize, by means of an overarching planning control layer approach, various existing supply chain, production and factory control ecosystems leveraging existing legacy or best-of-breed software applications without the risk of a rip and replace systems and data duplication approach. Further, there are options for leveraging data management and production execution best practices.
Key Reader Takeaways in Considering Industry 4.0 Transformation
Industry 4.0 represents a broad area of operational and business planning transformation supported by enhanced digital methods and capabilities that can often include Digital Twin simulation capabilities. It is the coming together of physical, digital and advanced analytics technologies including artificial intelligence and machine-learning enabled planning capabilities.
Industry 4.0 efforts require various business, operations and supply chain executives to have collective transformational vision, business model objectives and identified value for the business related to bringing together planning and production control processes. Such a vision can include lights out factory automation or modular production lines, in incremental phases of deployment. The question to be answered is how to align tactical and operation planning processes and master data in a more automated and more responsive fashion.
In the context of business, supply chain and operational planning processes, it should be an ability to synchronize processes related to expected product demand, mid-term planning, production scheduling and output to plan. Is should include the ability to foster and support more accurate and up-to date information, including real-time information generated from the factory floor. It represents a fostering a more responsive planning and decision-making capability among multiple production lines and/or facilities including the ability to simulate through what-if methods, the most optimized plan that will support required business objectives.
Instead of a disruptive or potentially costly systems rip out and replace strategy, consider a layered Cloud based control layer approach where existing systems and data sources can be feed a singular framework of interconnected digital technologies including Edge factory operations systems.
Information and Resources
For additional information consider reading the Replan resource: CEO Update: A Single Continuous Plan Across the Entire Planning .
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