Janne Juola, Head of Planning Solutions at Nortal, May 22, 2020
When striving for a seamless supply chain, a good plan is based on simulation, optimization and the planners’ educated guess about possible future resources and supply scenarios. Even with advanced planning simulations, there are always variables that are impossible to predict. However, they can be categorized to prepare for the unpredictable.
These unknown planning variables can be broken down into three categories: lack of resource availability, an inaccurate capacity model and an impeded information flow. Still, there are valuable steps and actions to consider while managing these challenges.
Preventative maintenance breaks can be simulated, and scheduled shutdowns and lack of staffing should be part of regular planning routines. However, unplanned shutdowns due to equipment failure may force the closure of a production line. This is a real-life example showing how force majeure can impact even the most advanced and optimized planning simulation. In this case, a lack of resource availability is forcing production to deviate from the original plan.
To recover, there are a couple of actions to consider:
Industrial force majeures are typically related to resource availability, including sick leave, broken equipment or other logistics issues, and production shutdowns. Also, material availability can mean quality issues or missing raw material supplies. Force majeure can also be a performance issue, where production or shipment takes more time than planned. These matters are a common part of the everyday life of industrial companies. Deviating from the original plan is not an issue as long as there are operational-level flexibility and the capacity to quickly re-plan while testing what-if scenarios.
If the planning simulation suggests beginning a painting process from dark objects moving into light colors, it is highly unlikely the operators would follow that directive. It would result in too many changeovers and line cleanings while hindering productivity. In that case, there would be a deviation from the plan because the unit process is not optimized correctly.
Another example would be setting the line capacity at 80t/hour, but realistically, only 50t/hour is achievable. In this case, certainly, production will not meet the planned schedule.
These two examples show the need for the near-100% accurate process modeling of an Advanced Planning Solution. For the virtual twin of capacity model, there are two crucial questions to answer:
Do not follow an unrealistic plan; for example, when planned production is more than what can be feasibly produced. However, be mindful that any decision made on the shop floor not to follow a sub-optimal plan must be well-justified. For the operators, some choices — such as frequent changeovers due to shorter production runs — might seem irrational due to the extra effort it requires. Also, if only looking at unit operations, it may seem that the company is losing money because of the vast time used for set-up and cleaning between the production of different items. However, from a business perspective, these shorter production runs might be required for on-time deliveries and inventory reduction.
Planning incorporates numerous stakeholders and operations within a company. Specifically, a plan sets the tone for the entire value chain. Even though the team responsible for supply chain planning is usually located at the same site, communication processes and information flows remain challenging.
For example, what if the truck delivery planned for cannot be booked as intended? Most likely, this disruption will be relayed by the dispatch office. Let’s say, to avoid late delivery, the truck will arrive two days before the initially scheduled date. The vital question then is, what happens next to facilitate the change?
Until we possess a miraculous crystal ball that tells us the future, it is imperative to prepare for the unpredictable by maintaining an open mind to adapt and react promptly. It’s impossible to consider every variable while planning; the attempt would probably result in a bewildering case of complexity. Ultimately, understanding and empowering the roles of different stakeholders and securing the information flow means more ease in managing unpredictable variables.