3 June 2016

Lights-Out Planning – The First Building Block Builds on Industry 4.0

Lights-Out Planning – The First Building Block Builds on Industry 4.0

Many companies are interested in understanding the concepts of “Industry 4.0”. In addition, they are eager to know how those concepts could help them to transform. Nevertheless, why is there no vision on Supply Chain 4.0? The same question occurred to Lora Cecere, the founder of Supply Chain Insight, and she reflects on this in her recent blog “Time for Value Chain 4.0?”

So how could these concepts impact supply-chain planning processes and technology? Over the past two decades, the mathematical models, employee collaboration/workflow, end-to-end integration and visualization system capabilities have improved drastically.

However, when you really think about it, a supply-chain planning model is still an “infrequent mirror” of the production or supply reality. We all know that to make the supply-chain planning tool function properly, we need to feed it with the correct planning master data. The planning master data is the best effort to structure the production plant or the supply network in a number of data objects. The optimization logic and constraints are typically defined in workshops with the planner community. Finally, they are tuned in final testing and parallel runs with the old planning system, or old planning Excels.

So we are, in fact, extracting the planning master data from previous master data and existing experience. However, how can we be confident that this planning master data is close to reality? Is our Economic Order Quantity still correct? Are we using the right BOM? What is the actual demonstrated capacity of a workshop?

Suppose that building on Industry 4.0 we could automatically derive every day the actual used BOM or routing out of the vast amount of actual production/supply/order data; that every day we could optimize our stock policies; that we could calculate our ideal batch sizes given the just-received next 13 weeks demand, and so on. Is it a dream? The above thinking may look far away, but it is not. Thanks to big-data concepts and existing technology, it is no longer a myth to derive the above planning master data automatically.

At bluecrux, we truly believe that this is the first step in the Lights-Out Planning concept. If you are interested in knowing more, do not hesitate to contact us.