Solutions
Supply management
The multi-site view of load-capacity and industrial performance
Reducing manufacturing lead times
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 tactical needs and focus areas of today's manufacturers.
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 tactical needs and focus areas of today's manufacturers.
On the tactical side, there is a subject that is obviously very hot right now, that of supply. It is very complicated because everything varies enormously and almost every day a new crisis appears.
To cope with this, the adaptability of your product can help, because if you have internal capabilities that allow you, depending on the parts that are available, to adapt your product, you will be much more agile. That is what Tesla did during the COVID crisis.
It is also what certain aerospace players did. For example, chips were no longer available, nor were semiconductors. They then worked on the design of their products to be able to adapt them to the chips that were available on the market.
The other best practice that we observed during this period is rather a task-force best practice for going after these parts that are rare. The idea is to have local resources in the place where these parts are, so notably in Asia, people agile enough, who know the network and the local ecosystem well and who are able to constantly restock semiconductors to replace others, because it is the only way to be agile.
The multi-site view of load-capacity and performance is also a subject we work on a lot in heavy industry and then in consumer goods, notably cosmetics. The objective is to obtain a view of all the sites in order to be competitive and to be able to compare similar processes across all the sites.
And so, to be sure of being at the very top on each site—and that is the link with production planning—it is that if I am agile enough, I will be able, depending on the competitiveness of each site, to decide to send, in real time or in any case over a fairly short time horizon, products from one site to another in order to have the lowest production cost depending on how my footprint is sized.
So that requires having both the indicators, working on them constantly, driving them, and then having the right planning process to take them into account when allocating load-capacity.
And today, having the data that makes it possible to do this is not as simple as that, and even the most advanced groups do not necessarily have this data.
There are few manufacturers who ultimately manage to have this consolidated view of load-capacity. The common field issues are the different ERPs when you are a group resulting from a consolidation, different processes, different timelines between the different sites.
On the other hand, those who have managed to standardize even a little their processes via a digital solution like Oplit, and to have this consolidated view of (“which are the most efficient? Where do I have a little slack on a specific trade to transfer the load?”) can achieve big capacity gains over the medium term.
Indeed, every time we have worked on this subject, we have observed it. It is really performance potential that is sometimes a little hidden because, in fact, very often each site is managed differently, sometimes there are BUs above the sites and even regions that will manage a certain number of sites. And so all this can be a little drowned out by the organization, which silos enormously. Local performance is then often quite transparent, whereas global performance is less easy to manage. So having this overall view is a very important power.
Finally, one last tactical subject, not necessarily new but that remains current, is the reduction of manufacturing lead times. We see this a lot in the luxury, watchmaking, and jewelry sectors, but generally, in all the consumer-goods sectors. Because of course, agility means being able to react much faster to the market, and consequently you have to be able to have short cycles, both in production and on the value chain.
So much so that we are even observing reshoring initiatives in textiles right now. There is a lot of thinking around how to repatriate the manufacturing of fabrics and yarns that used to be made in China or Vietnam and then exported to Europe, with the aim of having a shorter overall cycle.
And so, when a collection is produced, it is not received within six months, but within one or two weeks, which makes it possible to quickly know what works in store (a model a bit like Zara's) in order to be much more responsive.
This therefore concerns a complete value chain, and then, at the scale of a site, a lot of transformation is done, notably in watchmaking, where the cycles range from nine months to sometimes two years to make a watch because of the technical complexity.
And thanks to planning, we are going to move to cycles that will last a few weeks or a few months. And that saves enormously on work-in-progress and stock. But it also saves enormously when there are market accelerations and decelerations, because as a result, you do not have these very significant costs in the supply chain that load-capacity generates.
Indeed, at one moment, you are going to have idle resources. So you have almost social problems because you have too many people. And at other moments, you need more skills, but you cannot manage to recruit fast enough. So if you have short cycles, you react much faster and therefore you adapt much faster, in real time.
So the less stock I have, the fewer problems I have, because stock hides problems, so it prevents you from dealing with the right subjects, and in addition—and this has been proven—when you follow the life of a part, the more stock you have, the more the part will be moved because you have work-in-progress, so the part is taken to one place and brought back to other places.
We realize that the part is handled about twenty times in the same plant; you have about twenty handling breaks for the same part, just because in fact it waited, orders arrived, other orders changed. It therefore undergoes all the ups and downs that you have in your demand, whereas if you have a short cycle, you observe this phenomenon much less, you are much more linear in your production.
