Supply Chain
Bringing predictability in the current context thanks to more effective production planning
Real-time shop-floor management
Rethinking your industrial strategy
Watch the conversation between Michael Valentin of OPEO and Thibaut Wilhelm of Oplit from which this article is taken
With the goal of taking a 360° look at industrial production planning, Michael Valentin, managing partner at OPEO, takes stock with Thibaut Wilhelm, CEO of Oplit, of the various needs and must-haves of today's manufacturers.
At OPEO, our opinion is that this isn't going to change—in fact, it's even going to intensify. That is to say, we are in a world that is very uncertain; without even talking about war, there is enormous instability, if only on the regulatory side, which changes regularly, and on access to raw materials.
To cope with this, planning can help a great deal. The classic planning processes (MPS, scheduling) remain valid, but equipping yourself with digital tools already makes it possible to be a little more predictive about demand. We see quite a few groups working on demand-prediction models and also on the traceability of the upstream supply. Going as far as possible toward track-and-trace of what happens upstream, having the right processes to talk to suppliers, but also, if possible, having the data that makes it possible to trace what is happening on the upstream chain in order to cope precisely with this volatility.
Sometimes it is only planning, but sometimes there are also business stakes, because depending on the decisions made—given that raw-material prices have varied so much recently that in sectors like food or metallurgy—the moment when you buy your raw material had an enormous impact on downstream performance, even more impact in fact than your industrial performance.
So as a result, it is all the more strategic, in a context where prices vary enormously, to have this kind of system that makes it possible to be very responsive and to be more and more predictive about demand.
And reassuring customers is also a big stake, and we observe it among customers in two ways. In aerospace, there are many prime contractors who ask to see the load-capacity, and being able to show a simple load-capacity by showing what the customer represents in the load and showing that we are confident about getting it through, that represents an enormous commercial value. And the other point is the ability to provide estimated delivery dates to customers.
This predictability in communication is really a game changer in a customer-supplier relationship.
Finally, still regarding aerospace, the supply chain has nevertheless been structuring itself for ten or fifteen years to meet these needs, because it is a sector that is always behind, but it is progressing! The companies in this value chain are high-performing; it is simply the whole chain that produces this result.
So it is a sector that has been structuring itself a lot for a long time, but that still has progress to make—yet it is progressing. And then there are plenty of other sectors where this was not valid before, and where after COVID it became valid, such as the mass-retail sector. Traditionally, it is the sector where the chain was very lean, where it worked very well, except that these chains, with inflation and with material shortages, completely fell apart, and even now there are constantly missing references, and so predictability becomes important.
Another essential subject is the real-time management of the shop floor. That everyone, and notably the bottom of the chain, knows what the most optimized decision for the company is. So if we can ideally have the technician or the production operator making the decision, that is really ideal. And then the management system also has to support that. In fact, traditionally with lean, we rather had daily monitoring—the next day we would come and analyze the previous day's performance with the indicator data on volume and quality—but as time goes on, we increasingly realize that the norm is rather to want to monitor in real time.
This came a lot from COVID because during the crisis, we had plenty of bosses who asked us at OPEO, “I am remote part of my time, many of my resources, the support functions, are also remote, I only have the operators on the line, and even the team leaders were sometimes not there, and so how do I get a view of performance but from home, on my smartphone?”
So that means you need to have either very high-performing business-intelligence systems, or SaaS like Oplit or others that are also in place, that help to do this. In fact, depending on the subjects, you need to have the toolbox that will make it possible to have this notion of real time in order both to be able to manage remotely or in person, but above all to be able to react in real time because, as a result, we want to be able to solve problems.
Solving a problem in a plant is like a police investigation. If you arrive within the hour, you have ten times more chances of succeeding than the next day. Because in fact, you will miss plenty of elements, plenty of clues. So one of the stakes for site managers is to be able to identify the location of the problem in order to go there immediately to help solve it.
Finally, regarding industrial strategy, we have had several recent cases of companies that asked us for help to rethink their strategy according to the estimated changes in both demand and the geopolitical context. It is a real stake, in the medium to long term, but important nonetheless, that rests on the allocation of capacities. So it is both about where to locate your production sites. So do I put one in the US, for example, because if I tell myself that Trump comes back to power, they will close the borders, so it is better that I have a site on-site to sell on-site.
So that is one subject, but there is also the issue of how to think about your base plant. Often this reflection took place on the product—so I designed my product in a modular way to be able to be agile, but I do not necessarily carry out the same reflection on my industrial process, and yet it is important to tell yourself that if I manufacture chocolate, for example, I in fact have four or five major steps. Which steps do I want to standardize regardless of the sites? And then what will be specific to each product or each site that I will be able to work on specifically and that I will buy at a higher price but that will create the value that I create on this product.
So having this reflection is extremely important because it makes it possible to be much more agile, to ask yourself where to install your capacities, the parts of your process.
The integration dimension is also a subject. That is what makes Tesla's strength. They are integrated. And indeed, when we tackle this subject in general, we also ask ourselves the make-or-buy question because it has moved a lot recently, with everything we have mentioned. And so there is sometimes a strategic interest in reintegrating things that were outside in order to be more agile in your market.
