Interphex: The illusive supply chain holy grail
Collaborative planning and manufacturing promises real competitive advantages. The addition of new partners, vendors, customers, and "touch points" to an already complex process creates entirely new levels of intricacy. Here's how an Internet-based company proposes to simplify the process and capture the supply chain's true potential.
By Ed Czupryna, CEO, Ortems Direct, Warrenville, IL
Overview
Manufacturing: the natural collaborative hub
Context: the difference that makes a difference
The e-Supply Chain Management Platform
Monitoring what is critical
Role-based context
Evolutionary APS
Transformation to e-manufacturing
E-supply chain key performance monitoring (KPM)
The Ortems plant desktop
The explosive exponential growth of the Internet and the ability to move information at e-speed marked the advent of B2B supply chain collaboration. But as with other major technology shifts, e-supply chain collaboration has proven more difficult to achieve than people first realized. It involves considerably more than browser access to web applications.
It is inherently difficult because of the number of individuals who have vested self-interests in its success, and therefore, must be included in the process. As a network of supply chain partners forms, the number of people needing to be involved in production planning and execution grows exponentially. One company saw a seven-fold increase in individuals central to collaborative production planning. The ability to optimize and expedite planning decisions subsequently becomes of paramount importance.
Collaborative planning and execution, despite its challenging nature, can yield demonstrable returns. It makes for the logical entry point, as well, for its central importance to all other e-supply chain collaborative activities.
So, how does one go about it?
Manufacturing: the natural collaborative hub
Rapid order fulfillment is the prime objective of supply chain strategies. As a consequence, manufacturing plays a central role, for manufacturing is where all the elements of planning, marketing, sales, purchasing and distribution come together, coalescing into items of exchange of desired value to the end customer. Pockets of information resulting from activities in the plant have tremendous value to stakeholders up and down the value chain, from raw material and component suppliers to distribution end points where products are put into the hands of the end customer. Operational plant information, specifically detailed, accurate, real-time production information, is fundamental to developing an optimum, feasible plan. It is also critical to other collaborative processes, from purchasing to traffic management.
For the fact that this information is the heart and soul of plant-centric advanced planning and scheduling (APS) systems, APS presents itself as a natural focal point for launching e-supply chain management initiatives.
Context: the difference that makes a difference
Plant data in its most elemental form is of little value, however, beyond the narrow domain in which it arises. Information as defined by Gregory Bateson, seminal information systems thinker, is distilled to being "any difference that makes a difference."
But any difference that can make a difference always resides in a context that is meaningful to the recipient, not the sender. That puts an additional burden on plant-centric APS systems if they are to serve this central collaborative process, to have intelligence that extends well beyond the plant. This intelligence must include not only the ability to define and present a meaningful context to each participate in the decision loop, but also the ability to expedite and optimize the very act of notification and response to solidify decisions in time to "make a difference."
The e-supply chain management platform
The plant-centric APS has come to be characterized as being constraint based, finite capacity, optimization that generates not only the optimal plan, but also one that is optimally feasible. Optimum feasibility is dependent on a highly granular, detailed model of the plant, one that accurately portrays materials, machines, and human resource skill sets at the most discrete level. A best of best –of-breed solution goes beyond simply addressing what to make when, but extends more critically into synchronizing precisely how to accomplish this. Aggregate profiling that only gets to daily schedules is not enough. What is necessary is the ability to schedule and reschedule at the specific order, machine, material component, and worker level -- within the shift.
In order for a plant-centric APS system to ably serve the expanded function of supply chain collaborative planning and scheduling, three critical elements are needed – all which must work seamlessly together. First there must be an APS engine that can generate accurate, detailed plant status information in real time. Second, it must have the intelligence to format it in a context that has value to each individual stakeholder in the supply chain. And third, there needs to be an enabling platform that supports real time broadcast to the various stakeholders to achieve optimal decision-making.
At a technical level, this defines what an intelligent e-supply chain management (e-scm) platform. At an application level, it takes plant performance information and scales it appropriately to reflect key performance indicators (KPIs) for the entire supply chain. Properly architected, these advances in APS mark an important evolutionary step in the development of APS solutions. Successfully engineered, it makes it possible to think of APS as a offering a window or providing a "plant desktop" view of major importance to all stakeholders in the extended supply chain.
The core key performance Indicators (KPIs) that best reflect overall performance in the plant – throughput, quality, asset utilization – have grave importance to the performance and profitability of the entire supply chain. But the configurations of these three metrics so crucial to plant performance management are not necessarily one-in-the-same as those needed by other stakeholders beyond the plant.
A supplier is interested in knowing order requirements in the plant, but would also want to be able to conveniently view that information as it relates to issues that impact replenishment schedules, like production velocity, variation in order configurations, and engineering change effectivity, for example.
Likewise, a distributor is interested in when goods will be ready to ship, but as it relates to cascading issues that impact the distributor's performance, like order sourcing locations, shipment configurations, capacity of intermediary processors, and the like.
Sales would want to know where in the calendar they can promise commitment to order fulfillment, but they also highly value real time notification of unplanned disruptions to the plan that might impact costs and delivery schedules, forcing a reconsideration of order configuration, possible sourcing, and expedited handling.
As you move beyond the plant floor, the key indications of what constitute exemplary performance changes. They scale to reflect the dynamics of the process steps that specifically occur at that point in the chain. At a global level, one that takes in the entire supply chain, the key performance indicators include such factors as market share, customer satisfaction, and profitability. Information that arises in the plant that makes a difference all across the supply chain must henceforth embrace and reflect the importance of these global KPIs. The plant-operational APS engine that serves as the central information hub must consequently be able to do this on an ad hoc basis to support visibility anytime, from anywhere, using any array of digital devices.
Lastly, to achieve the necessary intelligent to support an e-SCM strategy of the scope we are addressing, two vital applications are central to the overall performance of the platform. These applications make it possible to: 1) profile each stake holder's role and the required information they need to do their job; and 2) to intelligently navigate the extended supply chain network to ensure rapid information transfer for optimal, proactive response.
Stakeholder profiles should include an individual's job function, permissible data access, desired data format, and designated alerts tied to specific threshold events. The navigator component would encompass an intelligent workflow engine for successful, rapid bi-directional transmission of information across the supply chain. Employing the Internet, with the navigator working in tandem with the profiler, contact and action can be near instantaneous whether the prescribed individual is in the plant, on the road, or on the other side of the world.
There are APS solutions coming to market that are making this evolutionary step. They are, as you might suspect, Internet/web enabled making it possible to link a client/server hub to remote wireless devices, including cell phones, pagers and Palm Pilots. They exploit XML as an information translation standard, making visibility using one device connected to another seamlessly transparent to the user.
Seamless integration providing for seamless transparency is a hallmark of a robust plant desktop information architecture. In addition to seamless device transparency, there must also be seamless transparency between key application systems to permit the most inclusive sourcing of information. The universe of plant systems drawn upon include LIM, MES, ERP and CRM systems, to name only a few. A part of the underlying enabling technology platform, therefore, must include a cluster of technology that includes visual data mapping tools, use of certified adapters to leading MES and ERP systems, and enterprise application integration (EAI) tools to speed implementation and assure quality data transfer.
Transformation to e-manufacturing
The transition of your manufacturing operations to e-manufacturing does not occur overnight. It is indeed a transformation – from economy-of-scale, make-to-stock oriented production to make-to-order, demand-driven production. e-Manufacturing is best characterized by agility, flexibility, and information transparency to all stakeholders in the supply chain, as well as velocity in the ability to achieve customer-driven order fulfillment.
Central to the whole notion of demand-driven production is the ability to provide available-to-promise/capability-to-promise (ATP/CTP), and the evermore important profitability-to-promise (PTP) – determining on the front end whether the margin in the mix meets overall supply chain objectives. Subsequently, it is becoming increasingly important to rapidly simulate the production order based on an accurate, detailed model of the plant such that the promises you make are ones you can keep. This is coupled with the imperative that the collaborative effort of all parties in the supply chain can be coordinated and synchronized – and re-coordinated and resynchronized when unplanned events arise – inside the order-to-fulfillment/delivery requirement.
E-supply chain key performance monitoring (KPM)
e-SCM key performance management (KPM) requires a holistic view of the processes involved in meeting the customer's expectation with appreciable ROI.
To do this, the KPIs must be derived from the business objectives you are trying to achieve. Plant-oriented KPIs typically measure the performance of the plant by various metrics, including reduced setup and queue time, improved yields, increased compliance to schedules, reduced rework and scrap, improved throughput, reduced inventory costs and the like. These are typically tracked and monitored by departmental systems like APS, MES, MRP and quality systems. Taking an enterprise view, the metrics of success in the era of e-business include such metrics as responsiveness to customers, order-to-delivery performance, market share growth, and profitability. Because performance involves the coordinated performance of supply chain partners, the prevalent measure is gauged to the execution of objectives that not only span multiple departments, but more importantly, inter-company processes. This requires a much greater emphasis on collaboration.
How, then, might you accomplished this?
The Ortems Plant Desktop is designed to provide immediate plant operational improvements as well as enable manufacturers migrate to e-manufacturing. It lies at the heart of Ortems e-SCM initiative, and is comprised of four basic components.
- Ortems APS Components
- Ortems Adapters
- Ortems EAI Solutions
- Ortems e-SCM Solutions
Ortems APS Components. ORTEMS' line of Advanced Planning and Scheduling products are designed to enable manufacturers to synchronize orders and optimize resources to achieve optimum plant performance keyed to critical business objectives, including greatest throughput and asset optimization with superior customer delivery – at least cost.
- Ortems Advanced Scheduler (AS) provides detailed production scheduling. Based on the proven ORTEMS' optimization engine (proven at over 250 international customer sites), it simultaneously synchronizes plant machines, equipment, labor and material to true finite capacity, providing the optimum feasible plan.
- Ortems Synchronized Resource Planner (SRP) provides manufacturing planning and detailed production scheduling in a single product. Based on ORTEMS' innovative Synchronized MRP, SRP simultaneously generates orders for all levels of the BOMS, as well as synchronizing plant machines, equipment, labor and material in true finite capacity, providing the optimum feasible plan within a single calculation.
- Ortems Complex Project Planner (CPP) provides graphical work order load balancing on equipment and lines for complex manufacturers, and more generally, any project-driven manufacturing operation.
Ortems EAI Solutions. Ortems EAI solutions include Ortems Visual Interface Configurator (VIC). VIC is a comprehensive object-based graphical data mapping application that links information flows between heterogeneous applications. VIC is available as a standalone EAI product.
- Ortems Navigator is part of Ortems EAI solutions. It is a single point of interaction and execution, offering pre-defined business process templates based on job function for easy implementation and presentation of data, and real-time alert processing for optimized collaborative decision making. Ortems Navigator is the foundation for The Ortems Plant Desktop as the single point of presentation and execution of disparate applications running at the plant level.
- Ortems Profiler provides a single point of administration for the Ortems Plant Supply Chain solutions, where user profiles regarding data access, presentation, and alert messaging are maintained. Ortems Profiler enables information presentation to be specific to extended supply chain, enterprise and operational roles.
The e-SCM suite includes OrtemsKey Performance Monitor, which runs within Ortems Navigator, providing KPI management. It provides immediate access for intra- and inter-company users regarding critical KPIs such as asset utilization and production efficiency, but more importantly to the performance of the extended supply chain, to KPIs that support customer delivery, customer satisfaction and market share growth.
For more information: Ortems Americas, 4320 Winfield Rd., Suite 200, Lisle, IL 60555. Phone: 630-852-2225. Fax: 630-852-2245.