By David Soyka, Senior Editor, Industry Today
Current supply chain disruptions are typically attributed to the pandemic; however, as Kim Doyle and Dave Plomin, Plante Moran Supply Chain and Operations Partners, point out, the pandemic elevated issues just waiting for the right circumstances to cause disruptions. Weak links in the supply chain aren’t going away once the pandemic ends.
“If you aren’t proactively addressing these business issues, you face extinction,” Doyle says. “And it’s not just about solving today’s problems. New challenges are always arising. You have to constantly evolve and recognize this is an ongoing journey.”
How do you get started on this journey? And how do you ensure your journey is taking the right path?
“Develop a multi-faceted, data-driven approach to assess problems. Based on these assessments, develop and implement actions using a phased-approach that provides both immediate benefit and funds further improvement activities,” Plomin notes. “Use Industry 4.0 technologies and solutions as a problem-solving framework to make supply chains more resilient to current and future disruptions.”
Every customer situation is different, and a solution must be tailored to your specific situation and business issues. “All too many times companies tend to not understand what Industry 4.0 exactly is or think the costs are excessive,” Doyle says. “Sometimes that makes the problem worse. Industry 4.0 is a set of tools and solutions to solve today’s problems and better position your organization to handle future problems. And these tools evolve just as the needs of the business evolve.”
“Everybody has slightly different definitions about Industry 4.0 and digital transformation,” Plomin says. “One of the first things to do is agree on a definition for what those terms mean for your business needs.”
Broadly speaking, Industry 4.0 is a continually evolving set of transformative technologies that, when implemented properly, provide a solution to improve operational efficiencies and value. The solution comprises technologies that include robotics, automation, artificial intelligence (AI), Internet of Things (IoT) and Industrial Internet of Things (IIoT), data analytics and digital operations.
“Plante Moran helps our clients look at the captured data for an aspect of the business or a supply chain problem in need of meaningful improvement. That provides the foundation to create a strategy for a phased implementation of technology and best practices, along with meaningful measurements to determine if goals are achieved as well as areas for further improvement,” Plomin says.
Clients can be overwhelmed by the quantity of data generated from their production equipment, MES, and ERP systems. Industry 4.0 solutions help make sense of and harness the power of that data. It’s the basis to solve both current supply chain issues and those that might occur five to ten years from now.
“Business use cases lead to the development of a systematic roadmap focusing on business problems and actions/solutions,” Doyle says. “As an Industry 4.0 solution matures, clients take what they’ve learned about the specific process and apply that to a newer, higher level of performance. Industry 4.0, or what might become Industry 5.0 at some point, is never static. Five years ago, for example, no one was talking about AI. Today it’s an essential tool.”
Assess Risk and Prioritize
Doyle emphasizes, “We provide a critical assessment of the top areas of supply chain risk, and then look how to reduce that risk without endangering quality. An example includes diversifying your portfolio of suppliers but being strategic about what that diversification entails. It may include diversifying your global footprint. So, for example, if there’s a disruption in Asia, you can quickly and easily shift production to Europe or North America.”
There are many aspects to managing supply chain risk effectively. Here are a few high priority areas to strengthen your supply chain:
- Prioritize sourcing as an ongoing continuous process. When looking at your supply chain, consider where the most critical parts and materials originate and how vulnerable those sources are to bottlenecks, labor disruptions, market conditions and political issues. By assessing your sourcing strategy, you can develop and execute a plan that includes diversification and improve the strength of your relationships with key suppliers to avoid stockouts and shortages.
- Make fast and informed decisions. To move from reactive mode to proactive decision making, you’ll need to consider how data is captured and communicated across the supply chain. This isn’t limited to data captured from the plant floor; it includes customer intelligence to anticipate order and production needs. Capturing both “big picture” and granular detail together provides visibility and drives efficiency across the supply chain.
- Understand what is in your control. Both internal and external risks can disrupt your supply chain, so it’s helpful to understand what you can control (internal risks) and what you can’t (external risks). For example, you can’t control external threats such as the current port congestion situation or environmental disasters. However, you can facilitate alternate transportation options, plan accurate forecasting and identify specific inventory items to stockpile in the event of a critical component shortage. By controlling internal risks, you are better able to respond to and minimize external risks.
Typical implementation of a supply chain solution is staged in 30-to-60-to-90-day intervals. “You need to look at quick-hit initiatives that drive immediate improvement, obviously,” Doyle says. “But it is essential these initiatives are coupled with longer term changes that make your supply chain more resilient to face the next disruption. And there will be another disruption. If you aren’t planning for the long-term, then you’re just putting a band aid on a bleeding wound.”
As Plomin points out, “It’s never going to be a case of, ‘O, problem-solved,’ We work with our clients to resolve whatever their big issue is and prepare for the next one. Eventually, once several other problems are solved, you can come back and look at the original issue and see if there’s any fine-tuning to do or connect things in a way that are more efficient.
“We help our clients in whatever way they need our help. That may mean providing assistance ranging from an advisory role to a task completion role. We always structure our work and project transitions so the client can continue to be successful as our engagement concludes.”
Industry 4.0 technologies bring an unprecedented degree of insight into your supply chain and materials flow within your plant to support real-time tracking, forecasting, customization, and optimized operations. This helps you reduce supply chain disruption and better manage risk in an uncertain and increasingly competitive environment.
Manufacturers that fail to fully embrace Industry 4.0 applications to optimize their supply chains may not survive the next disruption, let alone keep pace with their competition.
Kim Doyle helps her clients develop and execute supply chain strategies that improve their operational efficiency and boost profitability in today’s competitive environment. Her clients range from the middle market to global, billion-dollar corporations that are public and privately owned. Whether she’s assisting clients in the manufacturing & distribution, consumer goods, or medical device industry, Kim understands it’s critical to evaluate both internal operations and the extended supply chain. They go hand in hand.
Dave Plomin has more than 30 years of experience streamlining and transforming operations, driving business change, maximizing profitability and ensuring that technology investments deliver results. Dave provides solutions and leadership for critical initiatives, such as technology acceptance, operational change, performance improvement, and merger and acquisition integration. Over the course of his career, Dave has worked in a wide range of industries including construction supplies, distribution, health care, heavy industry, automotive, public sector, and non-profits.
Plante Moran is among the nation’s largest audit, tax and management consulting firms that helps manufacturers improve performance and profitability.
This article is sponsored by Plante Moran.