Updating your planning strategies to Industry 4.0

Refinery at Sunset

In It’s the era of Industry 4.0. Are you on board? — I shared strategies to digitalize the planning office with advanced planning technology to keep abreast with in an industry that is increasingly replacing the human workforce with robotics to gain better efficiency, increase cost-savings and build higher agility. With hundreds of projects aimed at facilitating disruptions behind us, Quintiq’s experiences with clients could be distilled into the following salient points.

1. Complicated processes don’t serve their purpose any more, as they were designed for easier navigation by humans. Machines and programmatic intelligence quickly expose unnecessary complexity. Quintiq consultants can help you understand which part of the process can be safely removed using mathematical optimization.

2. The onset of robotics, intelligent manufacturing and data-driven optimization enables standardization of processes crossing supply, production and distribution irrespective of product lines and categories. Take advantage of this and ensure the processes are the same in every part of your business. This will standardize automated data analysis and automated data-driven decisions.

3. Centralize the decision platform, but don’t force the centralization of your business decisions. Many of Quintiq clients start with a completely decentralized decision system, believing that local knowledge is more conducive to optimal decisions. Nothing can be further from the truth. Decisions viewed as optimal at the local level can waste resources idling in another part of the company. The effective platform models maintain central plan and high level KPIs at the decision center, while allowing distributed detailed schedulers to maximize local capacities and resources. Responding to local disturbances immediately shows up at the central plan and allows both local and central planners to view in real time, the impact on enterprise and single plant KPIs.

4. Employ automation and optimization with clear purpose and strategies to achieve your objectives. Use findings from optimization projects to streamline and standardize processes. Change the optimization rules and constraints to reflect your simplifications. If you treat optimization project(s) as a technology problem (e.g. replacing old style optimization solution with modern one), your business will not see all possible returns on your technology investment.

Underpinning all four steps is a critical fact: If you want to transform your business, you can’t do it with your legacy KPI structure. The demands of business will be changing too quickly for that.

Modern planning optimization techniques can consider infinitely more KPIs within each optimization run. Companies that started using our technology 10 years ago used maybe 5 – 10 most critical KPIs. Today, they evaluate themselves using 30 – 40 KPIs. Continuous digitalization of factories and increasing number of data streams could allow you to use more KPIs and tweak your business at the much more granular level than previously possible. But you will no longer be able to tweak your planning scenarios using brain power. It’s time to digitalize your planning office, and let machine learning replace human learning.

 

This post is an excerpt of ‘No world left for old style manufacturing‘ on LinkedIn.

Kris Kosmala

About Kris Kosmala

I enjoy the challenge of employing information technology as an accelerator of business growth. Of all business operations, I find supply chains provide the most fertile ground for creative re-thinking and transformative change. I find that frequently, new technology is not aligned with a company’s business strategy. I help companies address this critical issue, ensuring that the right technology is harnessed – and used correctly – to advance their organizational goals and turn it into true competitive advantage.