True End-to-End Visibility in Discrete Manufacturing
With the rise of electric cars and eco-conscious consumers, the Electric Vehicle (EV) battery is quickly taking over as the most important product in the automotive industry.
To remain competitive, discrete manufacturers must redesign themselves around a new complex supply chain that includes multiple tiers of suppliers and an increased number of parts.
Critical to navigating this new supply chain is end-to-end visibility, or the ability to track or trace products and services, including order status and physical product shipments, from conversion to receipt. But enabling this capability has been challenging. Data quality, latency, and a disconnected IT landscape have been significant obstacles to achieving full network visibility.
The advent of next-generation planning solutions driven by digital twins (cloud-based virtual replicas of the supply chain) is helping organizations overcome these hurdles, providing them with the computing power, data flexibility, advanced planning capabilities, and collaborative workflows required to enable true end-to-end visibility.
Dirk Lembregts, Former Executive Director of Supply Chain at General Motors, recently led a discussion on choosing a next-generation planning solution that enables end-to-end supply chain visibility. During the discussion, he identified three critical requirements for such a solution:
Requirement #1: Flexible Data Ingestion
Achieving end-to-end visibility requires a solution that can flexibly ingest internal data such as sales, order, inventory, and logistics data and external data like weather, market, ESG, and trade data in countries where critical raw materials are sourced. Ingesting these different sources and formats of data provides the foundation for generating actionable insights. The result is increased supply chain agility through better, faster decision-making. Companies can make data-driven decisions to address or capture potential disruptions or opportunities faster. Explained Dirk:
“The solution needs to flexibly ingest data from the no-brainers of logistics like track-and-trace to the more sophisticated market and supply intelligence. Going back to the EV battery, they need to scale to a factor of ten. Important raw materials, for example, cobalt, should be input into your external data. This is so you can monitor what is happening in ESG and trade relationships in a country like Congo, which is the main source of cobalt. As Tesla aims for zero or low-cobalt batteries, its market will dwindle, and companies must be prepared for that shift.”
Requirement #2: Dynamic Feature Creation and Selection
When choosing a solution, it’s critical for organizations to ensure it has the capability to ingest transactional data from source systems such as an ERP and dynamically create and select the right features of the data they want to analyze. For example, in the context of customer transactions, a feature might be the time of day the transaction occurred, the location of the transaction, the product or service purchased, or the payment method used. The platform must then generate a digital twin—a virtual representation—of transactions, allowing businesses to perform scenario analysis and evaluate the impact of different scenarios on their operations. For example, they can simulate how changes in customer demand or pricing might affect their sales, revenue, and profits. Said Dirk:
“You need to be able to dynamically create and select the right features to consider and connect this to your legacy system. When you're doing your transactions, you need to act quickly to build a digital representation in which you can quickly do scenario analysis, so they’re tightly connected to your transactional systems to go into this execution phase.”
Requirement #3: Break Down Silos for Enhanced Collaboration
Rarely does data flow freely between departments. Instead, it tends to hide in departmental silos. If data is made available, a disconnected IT landscape and data latency often prevent it from consistently informing cross-functional decisions. To achieve end-to-end visibility, a next-generation planning solution must break down these silos to allow for a free flow of critical information across different functions and time horizons. Equally important are the solution’s workflows that allow these functions to collaborate seamlessly on one platform. The result is the right information reaching the right people at the right time to improve the quality of decision-making. Explained Dirk:
“The solution has to enable seamless collaboration and workflow between the horizons and the functions, but probably even more fundamental is that a technology solution should enable us to break data silos.”
Achieving end-to-end visibility is crucial for discrete manufacturing organizations preparing to navigate an increasingly complex supply chain and competitive business landscape. Selecting a fit-for-purpose next-generation planning tool is one important piece of the puzzle. Implementing a proper digital transformation leadership program is another. As promising as transformation programs can be, people are often resistant to change. Embedded ways of working and thinking will not be transformed overnight. A digital transformation leadership program can facilitate technology implementation and adoption by gaining buy-in from leadership and communicating its business value across all stakeholders, from planners to the C-suite.
The “new normal” of automotive supply chains
How technology can help overcome its challenges.