Global manufacturing today faces significant operational challenges. Companies that were unable to meet these challenges have been left behind (for example, in High Tech think Blackberry and Compaq). The Industry Renaissance has transformed invention and production for the needs of today’s customers. How should manufacturers adapt to meet the challenges and shift from product-centric to customer-centric operations?
In addition to adapting strategic operations, manufacturing companies also require a tactical ability to plan and execute flawlessly at the facility level. Traditional processes lack visibility and the ability to capture real-world constraints. Only purpose-built solutions deliver realistic plans that can meet customer orders while managing the variability of supply and demand.
Manufacturing Operations Management (MOM) and Planning & Optimization are both critical parts of the optimal solution. They also must be working together in harmony to achieve maximum benefit from their capabilities:
MOM Specifics: Visibility, synchronization and control over ALL operations: production, quality, warehousing, maintenance and field operations.
Planning & Optimization Specifics: Planning, scheduling and optimizing production considering ALL constraints: material, capacity, labor skills, tools and setup.
Each solution has inherent value but are less effective when implemented in isolation. Manufacturers that execute without having a realistic plan are working blindly. Those that plan without effective execution are setting unachievable goals.
In numerous case studies, manufacturers have found that the limited visibility to shop floor activities and poor planning led to problems with over-scheduled machinery and equipment. Unforeseen bottlenecks and constraints constantly delayed productions and the only way to ensure on time deliveries was to expedite, add labor or overstock inventory and WIP; all at great expense.
Using both MOM and planning & optimization as part of an integrated process provides significant value. Thanks to material synchronization and optimal planning, inventory reductions of 40% or more have been achieved and cycle times reduced by up to 50%. More importantly, the ability to balance demand from sales, purchasing, manufacturing and finance leads to optimal outcomes for meeting customer orders at the lowest cost.
While the emphasis may vary with specific needs, most industries can benefit from this combined solution.
If you would like to learn more about how optimization and execution can help you thrive in the Industry Renaissance, click here to download our whitepaper on the same topic.