“…every dollar we spent on agility has probably got a 10x return on every dollar spent on forecasting or scenario planning.”
A statement by Marc Engel, the Chief Supply Chain Officer of Unilever Europe, in the article “Agility Beats Forecasting when the Supply Chain is Stressed
This is how Tom prepared for the arrival of Covid-19. Well, he did not know Covid-19 was about to arrive; it was not part of the scenario planning; the forecasts showed increased demand. When iCovid-19 appeared on the radar everyone said not to worry.
Tom was however familiar with daily disruptions: sales not matching forecasts; supply problems; attendance issues; machine vagaries; load shedding and who knows what else.
Tom understood that to create a new “plan” that took the changes into account that the factory would need to be able to reschedule frequently and then get the factory to work to the new schedule.
Tom saw that the process of obtaining data, rescheduling, and issuing schedules was far too slow. Staff were doing their best, but it required substantial manual effort to try and switch to new schedules.
They tried stock buffering as a way of reducing the need for rescheduling; occasionally trapping raw materials in the wrong sales unit as well as incurring obsolescence as a result of sales not matching forecast or due to shelf-life expiries. Buffering did not work as well as expected.
To cater for the uncertainties of his world Tom digitalized operations. Not just randomly, with an IOT here and an IOT there, but with the specific focus to achieve the following
- To make data available within the system, for use in decision making, current and trustworthy.
- To shorten the decision-making process so that the factory could react faster to “unexpected learning opportunities”.
- To be able to publish schedules more quickly to all departments / staff (and suppliers) who could be affected, to ensure synchronized execution.
Tom’s desk plaque holds a quote from Mike Tyson and a reminder of his overall objective
“Everybody has a plan until they get hit”
How quickly can you recover?
Customer service, productivity and profitability are up. Covid-19 is just another day in Tom’s world.