Digital logistics: how manufacturing companies can profit

Digital logistics – success through networking.

This was the motto of the 30th Logistik Dialog hosted by the Bundesvereinigung Logistik Österreich in Vienna on 3 and 4 April. Against a record backdrop of more than 700 congress visitors, the event was all about opportunities for making supply chains more intelligent, efficient and agile through digitalisation.

“Logistics and IT are growing even more closely together. Without IT applications, complex processes in the supply chain cannot be mastered any more. Digitalisation as a central element is decisively influencing the development of logistics and its concepts,” was the conclusion from Roman Stiftner, President of BVL Austria.

The underlying question is: How can information technology processes and results in production logistics be improved?

Arjen Heeres, Chief Operating Officer of Quintiq, provided the answer in his presentation during the event. He used the example of a joint project with a customer, a leading worldwide manufacturer of plastic packaging, to drive his message across.

Complex rules and constraints

The customer had agreed to plan more efficiently but what they required was faster response to changes in the plan and to disruptions. At the same time, executives of the industrial company wanted to raise planning quality. Changes to variables or in the event of disruptions, was to be calculated and presented in planning scenarios. An additional requirement: enable planners’ knowledge to be transparent in one system, making it available to everyone involved. The customer wanted to achieve this target while simultaneously reducing the planning time needed.

Of course, the customer’s management hoped the improved planning would have a positive influence on success-relevant factors, such as inventories, set-up times, the amount of overtime, delivery performance and delivery service. The company decided on Quintiq’s planning solution.

Intelligent planning and optimization

What was decisive was, among others, that Quintiq’s core competence is planning and optimization. Quintiq not only supplies a highly developed software solution, it also supports the planning process with an optimization team – and in later operations with worldwide support. The planning specialist would also gain plus points from strong visualisation of processes and results.

Furthermore, Arjen added that the application could be adjusted with great flexibility to customer’s specifics. The latter is possible in that the Quintiq standard software can be supplemented both by process or sector specific solutions, and also customer specific business rules.

The end result?

Planners could quickly generate efficient plans that apply to all business rules and production restrictions. A planner could prepare various scenarios that address different business targets. For example, one scenario could concentrate on minimising inventories while another considers maximising resources efficiency. By using the KPIs made available by Quintiq, planners could assess the effects of plans more easily and select the best one.

Solving a classic planning puzzle

One of the customer’s classic planning problems was setting an optimal production sequence. What this means is that not only do customer delivery dates have to be taken into account, but also the efficient use of resources. Employees that carry out the set-ups on machinery have to be planned. Using Quintiq here ensured a significant improvement in comparison with the planning tool used previously. By grouping work orders, the machinery was used more effectively.

As a result, planners could now react more flexibly and quickly to unforeseen incidents, such as changes to delivery dates or machinery outages. The decision-making process is further improved with increased visibility over the effects of plan changes on the KPIs.

Work orders were proposed automatically and the due date of the customer order, machinery capacity and inventories available, had to be taken into account. By using Quintiq optimisers to plan work orders, the manufacturer could ensure that customer orders are delivered on time while minimizing inventories and capital costs.

The final outcome

The effects in intelligent planning and optimization go beyond the customer’s own plant. The benefits for the packaging specialist’s customers? Their own production sequence was also planned in advanced leading to improved delivery reliability and service.

As Arjen mentioned in his presentation, “In-house production is completely integrated with the customer’s production plans in real time.”

Contributed by Björn Helmke.

What are your thoughts on digital logistics in manufacturing? Let us know in your comment below or drop us a tweet @Quintiq.