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The pandemic pushed us to accelerate our supply chain decision-making capabilities through digital transformation. Global protectionism, constrained markets and an evolving global trade environment shaped our initial direction, but the pandemic pushed us to speed up our adoption and quickly orchestrate decisions across our supply-chain functions.
As the leader responsible for process optimisation and technology enablement in our supply chain, I was at the (virtual) table during the earliest days of pandemic supply-chain planning, when we faced a never-before-seen convergence of challenges and reckoned with unpredictable absences and stay-at-home orders.
We were equipped to handle these challenges a few at a time; the confluence and unpredictability created an imbalance.
Thankfully, the information available from our supply-chain digital transformation work helped us to determine where our gaps were, faster; it was up to the team to determine how to use that information to balance demand and supply variability and prioritise for our customers.
Clarity Simplifies Supply-Chain Decisions
A couple of years ago, we invested in a data centralisation effort that was as much about creating a ‘single source of the truth’ as it was about simplifying information flow across our supply chain. Although this continues to be an evolution, the availability and abundance of data has provided both a qualitative and quantitative picture of our situation.
Considering each element of the plan-source-make-deliver strategy reinforced the roles each function must play. We were forced to focus, simplify, and eliminate silos. That simplification made it easier to digest and understand information and come together to do what we needed to do.
Any time you have clarity and common understanding your job gets easier.
Disappearing Workforce
One of our gaps was the disappearing workforce throughout our supply chain, which persisted within our manufacturing environment, as well as that of our supply base.
Our plans did not account for the varying nature of pandemic absenteeism due to COVID-related illness, COVID-exposure protocols, apprehension about potential virus exposure, and stay-at-home orders. This was sometimes a drastic, immediate reduction. At one point the daily absenteeism in some of our manufacturing plants was 30% or higher, when our normal rate is approximately 5%. Similarly, our supply base was being impacted, we continued to see unpredictable extensions to previously stable lead times.
While cross-training and upskilling are part of the solution in the future, we simply were not prepared to handle these levels of uncertainty.
An unpredictable workforce and constrained labour markets make supply-chain agility and resiliency even more important. We quickly became adept at providing alternative supply and manufacturing scenarios using data to inform which option would generate the best outcome for both cost and service.
Digital Transformation Creates Collective Conversation
We became more powerful and capable of making decisions and changes by putting information together for a collective conversation across the entire enterprise and our function.
That enabled us to capitalise on technology investments in ways we hadn’t anticipated.
Our integrated plan-source-make-deliver strategy simplifies our supply chain. That’s what integration means to us: that each of the four functions understands interdependencies so when something happens in one area we can anticipate how and when it will affect the other three, and how to mitigate outliers.
The global uncertainties of the last few years had helped us mature in our approach. We already were far from having to manually manipulate data to get the information we needed. The pandemic focused our work on our ability to connect the data and utilise the most appropriate attributes to get more systematic in our ability to prioritise.
As a result, the pandemic improved our supply-chain management. It’s not the way I’d want to go about making major improvements in the future, but I can say that we are better for the experience.
Operating Rhythm and Closed-Loop Scheduling
With our strategy to bring the Connected Enterprise to life, we help organisations solve daily manufacturing challenges. As a manufacturer with our own integrated supply chain, we understand the evolving industry challenges confronting global manufacturers.
We’ve had to digitally improve and reimagine our own operations. Operator heatmaps are
delivering line-of-sight production disruptions to maximise uptime. Remote collaboration tools have transitioned product witness tests from in person to virtual. And closed-loop scheduling is automating and optimising daily production schedules.
Closed-loop scheduling is the digital bridge between manufacturing and the enterprise. We are modernising scheduling by digitally linking our MES and a suite of powerful tools that enable our manufacturing teams to drive value. It includes a scheduling engine; visualisation tools based on configurable business rules; staffing visualisation tools that assign labour based on resources and certification; closed-loop analysis tool that monitor performance against constraints; and a revamp of the shop floor supervisor and operator displays.
The automation of the planning process and corresponding transactions has created a 40% reduction in required planning resources while ensuring best practices are applied, and a 25% improvement in direct labour.
When More Data is Too Much
Digital transformation has given us much more data, and when we are intentional with that data, we are faster. When we are less intentional – when people are not in alignment – then we slow ourselves down and make it harder to find the answer.
Digital transformation in our integrated supply chain is as much about culture as it is about operations; and as much about mentality as it is about tools and technology. While we have made progress, we are far from complete and still have work to do relative to our culture and digital transformation. We will continue to face multi-faceted uncertainty, it is our new normal, through our investment in agility, resilience, and our culture we will be successful.
But, of course, we aren’t the only organisation facing these challenges, and the solutions we’ve used can help guide your own supply-chain strategies, too. You can learn more about our approach to overcoming these supply-chain challenges in our Management Perspectives podcast.
Published March 2, 2021