The causes of supply chain disruption are global, but the key to resilience resides within the factory and its shop floor data.
by Ara Surenian, VP, Product Management & Engineering
The global disruption of supply chains has contributed to a perfect storm of multiple factors – critical parts shortages, labor scarcity, lingering pandemic shutdowns and more – all far beyond the control of any single company or industry. While individual manufacturers may be limited in what they can do about the causes of supply chain disruption, there’s plenty they can do to ensure resilience via better supply chain planning through modernization of shop floor data systems and factory processes.
Let’s examine how successful implementation of a holistic, smart manufacturing environment can radically transform supply chain planning and enrich the data flowing throughout production systems – empowering stakeholders from the shop floor to the top floor with more insight, decision support and operational context for enhanced industrial performance and business value.
Looking to Internal Data for Better Supply Chain Planning
Manufacturers have no choice but to live with a certain degree of uncertainty in the larger supply chain ecosystem, and that means external data that feeds into a company’s supply chain planning will always be somewhat unpredictable. The good news is that organizations can put themselves on a better footing to navigate these external disruptions by optimizing internal data and processes.
Nowhere are these data and processes more relevant for agile and proactive supply chain planning than on the shop floor. Better visibility and control of shop floor data is made possible by modernization of industrial systems with artificial intelligence (AI), machine learning (ML), edge computing and other digital technologies.
Smart factory modernization allows manufacturing teams to introduce automation, predictive analytics and other capabilities to dramatically improve key performance indicators (KPIs) in their operations around product quality, process runtimes, throughput, regulatory compliance and more. Throughout, one of the best road maps for modernizing shop floor data and processes is to target the silos and pain points that still reside in many current production systems.
Integrating Systems for a “Single Source of Truth” from Enterprise Data
Many companies still contend with excessively manual processes that make it hard to scale operations without introducing more error; and paper-based systems may force industrial managers to make today’s decisions based on yesterday’s data. Multiple generations of technology are often present, which creates complexity that can stymie efforts at workflow and process alignment.
Unfortunately, most data used in supply chain planning may not be correct. For example, capacity definitions, maintenance shutdowns and routings may be inaccurate. If that’s the case, data analysis will produce inaccurate plans.
These impediments force supply chain planning to be overly reactive, which causes production to stumble: missed delivery dates, poor product quality and other breakdowns that create waste and inefficiencies that cut into production capacity and profitability. Any solution for modernizing shop floor data must be holistic and capable of providing a unified view of the entire supply chain and manufacturing ecosystem – including all enterprise resources, processes and asset dependencies.
The process begins by integrating the Manufacturing Execution System (MES) and Enterprise Resource Planning (ERP) systems more closely, and then aligning those combined capabilities together with the Supply Chain Planning (SCP) system. The alignment of these critical systems in a closed loop will radically improve supply chain visibility and control by ensuring the basis for plans are driven by realistic and accurate information. This helps to break down silos of data and interconnects the top floor to the shop floor.
Powerful Benefits for Supply Chain Operations
Integrating the MES and ERP helps create a unified view of the entire production lifecycle and all elements of the extended value chain network, which then allows a more agile and proactive SCP to better forecast conditions and quickly adapt to circumstances for reliable production quality and processes across the entire supply chain network – from demand forecasting and component provisioning, to chain of custody and product quality monitoring in transit and at warehouses.
Valuable use cases include staying ahead of demand by automating purchasing and transfer recommendations; or prioritizing operations by margin, so the most profitable product lines remain most protected from supply chain shocks. The best solutions are increasingly cloud-based and purpose-built for manufacturing settings, with highly specific industry context and compliance reporting to stay current with industry statutes and regulations.
Throughout, these modernization efforts not only bring more data agility and value to the shop floor, they also enhance workforce productivity by arming shop floor employees with decision support through enhanced visualization and digital twin modeling, often with the help of virtual reality (VR) or augmented reality (AR) simulations. These same capabilities also help with upskilling team members or training new employees – a powerful tool to optimize the workforce contribution in a tight manufacturing labor market.
Overcome External Disruptions with Shop Floor Technology
Even in the face of today’s unprecedented, global disruptions, supply chain managers have more control than they might think in staying resilient and agile. By modernizing shop floor data and processes, transformation teams can unlock tremendous power to make the enterprise more resilient in its supply chain planning for new levels of security, quality and revenue generation.
Ara Surenian is a supply chain veteran with over 30 years of manufacturing and technology experience. He currently leads product management and engineering for Plex Systems Advanced Supply Chain Planning Suite. Ara enjoys advising companies and sharing his knowledge at industry events and business seminars. He is a member of the Association for Supply Chain Management and the Institute of Business Forecasting.