Dude, Where’s my car?
I recently had the opportunity to attended the Automotive Logistics Global conference in the Motor City, Detroit Michigan. As a self-proclaimed “car guy”, the conference proved to be a fascinating behind the scenes look at the logistics of turning raw materials into the beautiful finished good we call the modern automobile. I had no idea about the complexities of the logistics involved and the amount of product that needs to be produced, manufactured, shipped and tracked all over the world.
Before I share some of the conclusions I took away from the subjects that were discussed, I must admit that I’m borrowing the idea for the title of my blog post from one of the sessions at the conference that was titled “Dude, there’s my car”. I think that either title (where or there) makes reference to an important challenge that the automotive logistics industry faces. Visibility. There a number of areas within this industry where visibility plays an incredibly important role, ranging from the visibility of the market (supply and demand) of raw materials to visibility into the availability and delivery date of finished vehicles to dealer lots.
There is no doubt, and it was definitely emphasized in various forums at the conference, that while visibility is key, it’s also a challenge. With realities of lean manufacturing and just-in-time (JIT) delivery, one key area of visibility for an OEM is that of the shipments of parts that are destined for it’s plants. One example of some successes in this area was shared during a joint presentation by Matt Jorgensen from Ford and Kevin Denomme from Penske. Leveraging GPS technology on it’s fleet of trucks and the transfer of this information via Electronic Data Interchange (EDI), Penske had been able to provide Ford increased visibility into the arrival time of key components to it’s plants. This has obviously assisted Ford in getting their plants to be more efficient and prevent downtime due to late deliveries. However in the complex industry that is the automotive manufacturing industry, an OEM having visibility into the delivery time of parts to it’s facility is just the tip of the iceberg. There are multiple tiers of suppliers, all the way down to the raw materials, as well as the transportation of goods between all these tiers that make getting visibility into the entire supply chain a huge challenge. It’s clear from the discussions that were held at the conference that the more visibility that can be gained into this supply chain, the more efficient and profitable the whole industry can be.
The idea sounds seems simple enough. Provide more visibility throughout the supply chain so that we can all be more efficient and profitable. But what was also clear is that all this visibility also mean a lot more data. And thus another challenge arises. What do I do with all this data? How do I store it, manage it, not to mention, make decisions based on it
From what I could tell, all this added visibility and the data that comes along with it could be one of the next big challenges for the industry. It’s not good enough just to collect the data but not act on the data.
The better a company gets at analyzing that data, the more gains that company can make in terms of quickly detecting issues, and taking action earlier to mitigate issues. Essentially, knowing sooner and acting faster.
With all this data, there is no doubt that sophisticated tools are required to put the data to best use. These tools need to provide decision makers with the ability to do key things:
1) Visualizations and Alerting – It’s critical that decision makers can get clear visualizations of the data in order to see what is happening in the business (through dashboards, charting etc..). The addition of alerting capabilities to this provides early detection of situations which are trending in the wrong direction.
2) Scenario creation – it is one thing to identify a problem, but it’s another to analyze all the potential solutions. Having the ability to run and compare multiple what-if scenarios is key to being able to determine the right action in order to manage and mitigate the issue.
3) Fast Analytics – Doing all the above at lightning speed. Decision quality can’t come at the cost of decision speed. It’s critical that the financial and operational impact of the issue and the solution being considered be calculated instantly.
By the end of conference, it was clear that the industry is making great strides at improving the visibility into the supply chain. The answer to the question, “Dude where’s my car?” is becoming easier and easier to provide. But the next step, and the step that I believe will yield even greater results is to not only answer the question, “Dude where’s my car?” Instead, we need to be able to say “Not only do I know where your car is, but I’m making informed decisions to get it to you faster and with better productivity and profitability for the business!”
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- Your supply chain is costing you money - Reason #9: Relentless pursuit of one metric at the expense of other metrics.
- What Angry Birds taught me about supply chain improvement
- Integrating financial metrics into day-to-day supply chain management