Manufacturers today are being challenged to anticipate new product introductions while reducing costs and protecting profit margins. Maintaining lower levels of inventory with increasing requests for lower lead times and variable supply and demand is forcing manufacturers to look again at making their operations as Lean as possible.
Making operations more efficient is always a combination of people, process and technology, but this is one area where manufacturers can really leverage the power of technology and tools to make a strategic difference. The complexity of manufacturing lends itself to applying planning and optimization engines to sort through the endless combinations of possible production priorities. Legacy tools (such as Excel or manual planning) are available, but they typically suffer from being manual and static in nature. They lack the ability to support rapid decision support, let alone the ability to provide true optimization to meet the myriad business goals and KPIs needed.
Research has shown that “best in class” companies combine Planning & Optimization capabilities with traditional ERP and MES systems in order to improve operations. A study by The Aberdeen Group ranked organizations by the maturity of their processes and utilization of planning and ERP systems. The top 20% of these organizations had significantly better achievement of operational goals. These studies highlight how the ability to consider all constraints when planning production, as well as being able to simulate unlimited “what-if” scenarios, provides companies with increased agility thereby improving their competitiveness in the marketplace. As such, these companies have been able to unlock significant value.
As an example, we can look at the automotive plastics manufacturer Novares. With over 42 manufacturing plants supplying more than 12 OEM organizations, they faced a significant challenge in synchronizing production to the needs of their customers. Integrating their planning and scheduling processes allows Novares to not only develop feasible plans to support production but also the ability to adjust rapidly as changes occur, while also dramatically reducing inventory.
Other companies have seen similar consistent value in Planning and Optimization solutions with both tactical savings in time and productivity but, more importantly, significant improvement of key operational metrics including:
- Up to 50% reduction in cycle time
- Up to 40% reduction in inventory
- Increased customer service levels of up to 50%
Lean principles are also increasingly important in driving Sustainable Operations, which is now a cornerstone of many organizational strategies. Manufacturing can play an important part in supporting these key strategies. Whether Planning & Optimization is used as a rapid ROI solution in a single facility, or part of a complex synchronized network of operations, it has the ability to be a major contributor in this area.
No matter what your current situation or maturity of process, there is always much to be learned from seeing the art of the possible.
If you would like to see some of the research, including examples of what can be achieved, we encourage you to join our webinar.