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    Intelligent Manufacturing, Part 2

    Intelligent Manufacturing: Machine to Machine (M2M) Communication

    The manufacturing industry has been changing dramatically over just the past few years. Advancements in technology have been rampant and the newest machines being built require absolute precision. The only way that we can get that today is by the use of intelligent manufacturing.

    Absolute accuracy and efficiency are required by many of today’s factories. The existence of the automotive industry as an example is dependent on their ability to provide for safety and accuracy in their automotive manufacturing and building. Who is, after all, going to buy an automobile that isn’t guaranteed to be safe and well built? The electrical systems and many other components need to be–in some cases– a level of perfection that cannot always be achieved by human hands. Enter the use of intelligent manufacturing & Machine to Machine (M2M) communication.

    One great example of intelligent machines in current use is the Machine to Machine communication platform used by CNC machinery that is used today to create high end machines & products for use in the aerospace, power generation & automotive industries. Another would be the automotive and the programmable logic controller manufacture. These intelligent machines in use today can not only manufacture more cheaply, but they can manufacture machinery in a far smaller space and can save money by telling you when or if the machine is liable to breakage or is having some problems that could lead to down time. Applications and software being used in the factories today can offer dramatic savings in time, in money and in headaches.

    Companies in this economic climate are under increased pressure to have their machinery running to capacity yet to provide for and produce increased number of nearly perfect goods. Due to that pressure

    the machinery that is running is usually running at peak capacity and as such can be prone to breakdown.

    Mechanical breakdown can cost a company plenty. Not just in the financial losses that take place when the company is experiencing down time, but also from lost contracts or orders due to that down time.

    The challenge then is to ensure that there is a nominal amount of down time and minimal breakage. Today a wide range of applications are being used in manufacturing that can help to lower stoppage or breakage as well as to provide nearly personalized information sent to the operator to assist them in diagnosing the issues that may be taking place. The machines are being diagnosed by other machines or applications that can help to keep them operational and to warn the operations manager when there is a problem and prevent the breakdowns by suggesting fixes before the breakage or down time even takes place.

    Machine to Machine (M2M) provides for the means for machines to operate at peak capacity.

    Today, companies who have embraced this type of manufacturing include the CNC industries, Ford Motor Company and multiple other automotive manufacturers and, surprisingly the oil and gas industry. The refineries for a wide range of different oil and gas companies have embraced intelligent manufacturing wholeheartedly.

    Machine to Machine (M2M) has given the oil and gas industry the ability to improve their planning, their overall operations and improved the maintenance taking place in refineries today preventing a wide range of problems such as mechanical failure that might have led to spillage and other issues, saving both the companies and the public as a whole from the problems to which refinery errors can lead.

    Machine to Machine (M2M) communication is not just limited to manufacturing but also the power generation and smart grid energy sectors. In this report the Carbon War Room goes into great detail on the 1 trillion dollar market that M2M technology will provide not only to manufacturing but transportation, energy and even agriculture. The report is detailed and interesting: Machine to Machine technology

    The wave of the future, the way in which to arrive at precision, cost effective manufacturing is intelligent technology and it is transforming a wide range of businesses and industries now. Some of it is even diagnosing problems and telling the machinist or machine operator how to correct the fault to prevent the down time or to prevent disasters from taking place. Intelligent manufacturing may be a key player in the not too distant future in preventing oil refinery fires, oil spills and preventing environmental problems from taking place.

    James Kemper is the president of W. H. Meanor & Associates, an executive placement & training company specializing in engineering & manufacturing careers. He can be reached at: jms@whmeanor.com or 704-372-7640 #102 or visit at www.whmeanor.com

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    What is Industry 4.0?

    It may surprise you to learn we’re in the fourth industrial revolution. The first is the one we hear most about as it was the shift that countries made from simple farm lands to actual industrial production of products. The world began to thrive and evolve. But the evolution process didn’t stop there. It actually continued and with each upgrade, there are new opportunities for employment.

    Mass production marked the second industrial revolution. It was at this time that electricity helped to propel the process and ensured that more products could be created within a fraction of the time it previously took. This was a golden era that continued until the dawn of the computer. When computers were introduced, industries saw another era. It was during this time electronics and advanced technology could be produced.

    With the invention of digital technology, we’ve entered in what is known as Industry 4.0. This is a time where digital goods are produced and sent to people around the world in a matter of moments. This is a time when employment changed to where people work at home over a high speed internet connection with individuals all over the world.

    Even the devices that are common in our day to day operations incorporate the internet of things to help them function more efficiently. A doctor who is traveling across the country for a conference can check a patient’s pacemaker to be sure it is functioning properly and even obtain vitals from it. An owner of a production plant can review stock in real time, and even review the output of each of his machines without having to go into the plant. The possibilities are endless, and thanks to these cyber physical systems, it is possible to do more with sensors and a wireless internet connection than ever before.

    Industry 4.0 has also introduced us to massive amounts of data, and new analytics that allow better deciphering of information. Many countries are embracing the idea, and have started to promote the Industry 4.0 name. In the United States alone, we find the Smart Manufacturing Leadership Coalition is at the forefront of this, and working to help to ensure that those working within Industry 4.0 are all on the same page. They have also helped to push both software and technology further to ensure that Industry 4.0 continues to meet the growing demand for it.

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    Intelligent Manufacturing, Part 1

    Last week I introduced everyone to our 8 part series on Intelligent Manufacturing and as promised here is the 1st article in that series. As with everything it is always good to start at the beginning and with that in mind we discuss the Plug & Play Factory.

    It may seem that advances in new manufacturing technique are recent, it all began back in 1996 with NEMI (National Electronics Manufacturing Initiative) and from that the Plug & Play Factory concept was born. It is also important to note that the Plug & Play Factory is not a new type of factory or building but a set of manufacturing standards that are needed to achieve interoperability or plug & play capability on the factory floor.

    The easiest way to understand it is think of how your office is now networked. All is controlled more or less at a central point for computer systems, telephony, printers and even building management and when something goes wrong you call IT. This is very much the same way. The entire factory is operating on a set parameter of communication standards, the machines are networked, so that all activity is monitored in real time and can even be managed remotely.

    This is the first article of the 8 part series on Intelligent Manufacturing and many of the subsequent articles will deal directly with the standards set for in the NEMI Plug & Play Factory project. The project provided a proof of concept only and it was then that work began on standardization of protocols. The first of which was produced by ANSI in March of 2003: http://www.fed.de/downloads/IPC-2546.pdf. This is a detailed industry specific document. April of 2003 also saw Motorola proof of concept test and it is easier to follow: http://thor.inemi.org/webdownload/newsroom/Articles/Lessons%20Learned.pdf

    It’s no secret that manufacturing, not just in the US, has been far and away one of the more productive areas of the economy for several years. This has not always been the case with the industry undergoing severe stress due to personnel and manufacturing costs. These are problems that we don’t hear about nearly as frequently as we once did. The reason for that improved productivity and their advances in the market place can– to some extent– be attributed to their embracing the new technology standards that is known as the plug and play factory. It’s being called a Renaissance of sorts in the industry.

    We are seeing webinars and seminars on the plug and play factory are being given on a regular basis to introduce other industry and factory producing companies to the benefits of plug and play. (http://www.industryweek.com/webinar/advanced-manufacturing-digital-factory).

    Another benefit that the Plug & Play Factory standard can offer us is the ability to do far more in a much more limited space. Some industries particularly that of small businesses are limited by size and funding capabilities, but with higher efficiency due to the interoperability standards can allow for those limitations, even work with them better. This allows smaller businesses to maximize the use of property to achieve higher levels of production with fewer personnel. Many factories are using a third less space to accomplish the same thing that they previously needed far more space to do. This saves the company money on personnel, space, utilities and on other expenses for the production.

    Digital manufacturing is not just the wave of the future; in many cases it has already arrived. It is saving time, saving money and saving energy for manufacturers around the globe. Data driven factories will be the future of manufacturing for nearly every industry in the world. According to Leo Sadovy Performance Management at SAS, “the economy of the future will include a fifth factor: information. Information by itself will come to be seen as a peer, not merely a subset, of capital and labor.”

    The benefits of this system are a dual edged sword. One good example of those benefits is the ability to provide far more goods and services but require far fewer employees in order to accomplish that. In fact, according to SAS, the factory of the future will require little more so far as employees and personnel than a man and a dog and the dog is only to keep the employee company. That is the end game so to speak, a fully automated facility with easily configurable components and equipment. The full scale interoperability will mean manufacturing can flex to meet changing requirements & demands quickly and more efficiently.
    Increased efficiency and productivity is always the goal but as with everything it comes at a cost. Education and job skill development now more than ever are critical for a company’s survival. It is those that can provide quality specialists that will prosper and become a magnet for other companies. These new standards can be a burden or a boon. The difference is who is better prepared to take up the challenges of a real 21st century manufacturing environment.

    Next week: Intelligent Manufacturing: Machine diagnosing Machine

    James Kemper is the president of W. H. Meanor & Associates, an executive placement & training company specializing in engineering & manufacturing careers. He can be reached at: jms@whmeanor.com or 704-372-7640 #102 or visit at www.whmeanor.com

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    The Challenges Of Contract Manufacturing

    In every industry today, organizations succeed by focusing on what they do best and leaving the rest to their partners, agencies or outsourced vendors. Contract manufacturing, while it can be difficult from a supply chain perspective, seems to fit neatly into this scenario. In addition to allowing global organizations to focus more on their core competencies, value proposition, and engineering; contract manufacturers provide several other advantages over manufacturing products internally to include: lower costs, flexibility, access to external expertise and reduced capital expenditures.

    However, the question remains and must be addressed: with so much potential and cost savings that contract manufacturing can offer to their partners, why do so many of these relationships fall short of expectations? Perhaps one reason is that many of those expectations are flawed from the very beginning.

    For example, let’s take the first example of cost savings. The fact of the matter is that many of the cost savings that should be passed on to the customers may go to the contract manufacturer’s bottom line instead. This happens more than you think. Additionally, many contract manufacturers don’t always have the supposed influence with their suppliers since the original manufacturers often select the partners from the very beginning. This lack of influence is a key driver for an increase in costs from the contract manufacturer. Also, flexibility can be compromised by the contract manufacturer’s focus (or lack thereof) on low costs and low inventory. And, although using contract manufacturers often ties up less capital, the dollars need to compensate against the inventory holding costs included in contract manufacturers’ charges.

    Even with clear assumptions on the objectives and expectations, it may be a challenge to realize the benefits. That’s largely because it’s difficult to manage relationships with vendors and suppliers; especially when those suppliers were not selected by the contract manufacturer. Essentially, the parties should create clear objectives and expectations from the beginning that would make it possible to manage the relationship through service level agreements linked to a set of key performance indicators. However, these challenges may tempt businesses to keep manufacturing in house, at the sacrifice of increased costs. Instead, organizations need to take a strategic approach to contract manufacturing relationships; one that will benefit all in the supply chain. WH Meanor knows every aspect of manufacturing. We have our finger on the pulse of the manufacturing world. If you’re looking for a way to improve your bottom line by improving your team, we can help. Let WH Meanor put our experience to work for you.   Register now for a free ten minute assessment of your search efforts by clicking the link https://whmeanorassociates.as.me/

    Call Today!!

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    How IoT is Changing Manufacturing

    Efficiency is key to any manufacturing plant, and for that reason, the Internet of Things and manufacturing are a perfect fit. Today, we’re looking at a world that will be filled with almost 30 billion connected ‘things’ (devices and sensors) within the next five years. To understand why this is such big news for manufacturing, you first need to understand what it is that IoT has to offer.

     Efficient Machine and Goods Tracking

    A significant amount of time and money is spent tracking materials, machines, and finished products within a manufacturing operation. IoT technologies can be used to track any element within a factory, and it can be done with absolutely no hands-on human intervention. This is possible with RFID tags and on-site readers. The technology used is well proven and established, and is even used in critical industries such as aviation and freighting. RFID tags are passive, so they’re cost effective, and when integrated with suitable software it is possible for manufacturing operators to gather continuous insights into their manufacturing flow, allowing them to redesign their processes and increase efficiency.



    Optimizing Production with Machine Monitoring

    Sensors embedded in robots and other production machines can help manufacturers to continuously monitor their efficiency, while staying on top of all maintenance requirements. Remote monitoring and diagnostics can mean that faults or developing faults can be identified more easily, and there is less risk of production halting due to failed machinery. With the data collected, it is also possible to create new maintenance schedules based on the real time diagnostics. Because the monitoring systems require no interaction, they’re also suitable for lights-out manufacturing operations.

     It’s all About the Data

    Data will ultimately be more important than any of the individual machines and sensors that a manufacturer uses. With the right data collection techniques and effective interpretation, manufacturers will have the potential to continuously improve and streamline their production processes. IoT allows tracking from raw materials, to production line, and all the way through to quality assurance and delivery.


    What would take hundreds of man-hours to record manually, can be achieved in real time with IoT sensors. By adopting Industry 4.0 concepts, manufacturers will be able to share data between customer relationship management and supply chain management software, making for an overall more agile and efficient operation.


    While there will always be security and other technical challenges to overcome when deploying IoT solutions, the potential benefits are too compelling to ignore, and will soon become necessary to compete in an increasingly connected and automated industry.If you are an employer facing these issues of and need to attract & retain top talent or you are looking for that next career opportunity, we will assist.  Schedule a 15-minute triage call today and discuss what can be done to take you to that next level. https://whmeanorassociates.acuityscheduling.com/

    James Kemper is the president of W. H. Meanor & Associates, an executive placement & training company specializing in engineering & manufacturing careers.  He can be reached at: jms@whmeanor.com or 704-372-7640 #102 or visit at www.whmeanor.com

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    Improving Manufacturing Times

    Machining center manufacturers are all looking for and touting the ability to reduce part cycle times by offering faster and more efficient machines. That is what the job shop and part production customers of these products demand, because their end-product customers are driving a purchasing philosophy of lower costs per part.

    While the choice of a high-speed machining center makes a major difference in operational productivity and part cost, the tooling utilized on that machine can be another dominant factor. The efficiency of such new, special purpose proprietary tooling can even further enhance the output of a horizontal machining center. It can provide a wide degree of flexibility in compressing several machining processes, especially in parts production.

    Makino, a global provider of advanced machining technology, says that the use of special-purpose and multifunctional tools, like the SmartTools it manufactures, helps in this process compression. These specially designed and patented tools reduce cycle times as well as production costs, which saves money.

    As an example, there are a number of unique, special tools that can reduce the initial capital investment and drive out substantial process time in the machining of engine blocks. Cylinder bores can be finished and honed with a precise closed-loop boring system that automatically compensates for tool wear or thermal distortion and produces exceptional repeatability.

    You can also grind bimetallic surfaces utilizing a cubic boron nitride superabrasive grinding wheel all on a standard machining center.

    Machines incorporated with this special, multifunctional tooling will outperform a number of individual specialty-purpose machines when used in an integrated system. Mid- to high-volume parts manufacturers often invest in state-of-the-art machine tool technology, and can further enhance their flexibility and productivity with the use of such special-purpose tooling.

    With more and more demand to streamline processes and production cycle times, especially from original equipment manufacturer outsourcing operations, there is a growing need for more valuable and cost-effective solutions for jobs shops and production facilities. And, the solutions exist to allow them to “work smarter.” ?

    If you’re looking for the right manufacturing team, you have to start with the right recruiting team. Let WH Meanor put our experience to work for you. Register now for a free ten minute assessment of your search efforts by clicking the link https://whmeanorassociates.as.me/ WH Meanor can help. Call today.

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    The Internet of Things in 50 Years

    It used to be that the only electronics that were networked together and able to communicate were computers – and they only were able to connect with each other over a wired connection. But now, not only do we have wireless internet everywhere, we also have the Internet of Things – the network of devices that make up our world, sharing information, gathering data and learning from us so that they can serve us better. But what will this network look like in 50 years?

    Where exactly is the Internet of Things going?

    The Internet in 50 Years

    In 50 years, some experts think that the internet itself is going to be completely different than what we are used to. In the future, there will be internet much farther advanced than our current technology and it will literally be everywhere. Rather than finding “hotspots” with internet, people will very likely have a unique login of some kind that is the same across all of their devices to access the wide array of internet spanning the globe. You’ll probably have to pay every month for access, but maybe not. After all, you can find Wi-Fi that is free to use in my places even right now.

    The Communication in 50 Years

    Most people don’t have any idea just how fast the internet will be in 50 years. Right now, data centers or “nodes” that provide internet service communicate with each other at lightning speeds at least 10 times faster than the average home download speed. That will change. In 50 years, we’ll be connecting to each other at speeds that will probably be 100X faster than what currently passes for internet speed at these data centers, and rather than having home internet and Wi-Fi speeds that are optimized for download, both the upload and the download will be mega-fast. Fast enough that you could stream or upload a huge HD movie in seconds.

    The Network of “Things” in 50 Years

    Finally, the Internet of Things will literally be everywhere. From the clothing that we wear to the appliances, electronics and furniture in our homes, everything will be connected to the internet, gathering data, learning how to improve and sharing information with each other. When you sit down on your couch, your entertainment system will come on. When you get sick or injured, your clothing will not only have your medical information – they will also be able to call 911. Everything will be networked and it truly will be an Internet of Things.

    If you’re looking for the right manufacturing team, you have to start with the right recruiting team. Let WH Meanor put our experience to work for you. Register now for a free ten minute assessment of your search efforts by clicking the link https://whmeanorassociates.as.me/ WH Meanor can help. Call today.

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    How the ‘Internet of Things’ Will Create a Technological Revolution

    You know when apps became population how everyone wanted to make an app for just about anything? You could get an app to tell you the weather, an app to work on office documents, an app to track your spending and an app to display motivational sayings across your screen every morning to get you ready for the day. Everyone from McDonald’s to your local grocery store was releasing an app to get themselves onto your mobile device. Well, that’s how the Internet of Things will go in the next ten to twenty years.

    Right now, there are about 12 billion internet-connected devices on the planet. Original predictions a few years ago put that number much lower and the subsequent projections for 2020 and 2050 were similarly underestimated. Now, the estimate is that by 2025, there will be nearly 50 billion devices or “things” communications via the Internet of Things. So, what are all these devices and how will they trigger the next technological revolution?

    The Devices Making Up the Internet of Things

    So, what are these devices that are currently using that internet connection to talk to each other and to us? Plus, what devices are coming in the future?
    Right now, there are a number of new “things” that have technology inside them that show the way the future is shaping up. From smart light bulbs to cars that drive themselves because of sensors and technology in both the car and the roads. From electronics and appliances to all sorts of smart devices that are rolling off of the assembly line. There are quite a few IOT ready devices already on the market, but what is available now is nothing compared to what is coming.

    If experts are predicting 50 billion devices (5-6 for each person on planet Earth) by 2025 then the future is jam-packed with items that will use smart technology. This technology will revolutionize healthcare, change how we get from point A to point B and very likely change the way we work much in the way that computers changed the way that people worked over the past few decades.

    This network of sensors will work directly with cloud technology, which will collect and analyze the data that it received and then it will be turned into information and allow smartphones and mobile devices to use that information.

    If you’re looking for the right manufacturing team, you have to start with the right recruiting team. Let WH Meanor put our experience to work for you.   Register now for a free ten minute assessment of your search efforts by clicking the link https://whmeanorassociates.as.me/



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    Proper Preparation for Lean Mean Manufacturing

    It seems that every manufacturing company is now trying to adapt the Lean Philosophy, invented and mastered by Toyota Corporation. Lean manufacturing has also spilled over into non manufacturing industries. Unfortunately, many companies don’t completely understand the true meaning of Lean Manufacturing. Lean Manufacturing, simply put, is “continuously improving your processes to eliminate waste”. This sounds simple, but many companies will fail to become truly Lean because they don’t have an environment to implement and maintain Lean.

    Most people believe Lean is just a set of tools (One Piece Flow, JIT, Kan-Ban, 5S, Six-Sigma, Kaizen Teams, Push / Pull Systems, etc.) that can be used to cut waste. However, Lean is not only a set of tools, it is a culture. If a company has severe issues with employee turnover, employee morale, product quality, product delivery, equipment uptime, plant housekeeping, etc., it will be extremely difficult to shift the employees to a new way of thinking and conducting business. In other words, if your employees are in constant fire fighting mode, they will not be able to properly implement Lean.

    Fix the obvious problems first

    To prepare for Lean, you must “fix the obvious problems first”. Many times employers will know exactly what the problems and solutions are. They just don’t have the time, resources, or incentive to fix them. If you have an automobile that is constantly breaking down because of a bad transmission, then fix it! Repair or replace the transmission. Do not implement a Lean Strategy to fix the car. Just fix it. Lean is not used to fix broken processes. Lean is used to continuously improve working processes to eliminate waste. When all the obvious problems are fixed on that vehicle, it’s then time to fine tune it to become more efficient. It’s time to look at ways to cut waste (cost) to ultimately save money!

    A Word about Six-Sigma

    Some companies now mandate that Six-Sigma be used to fix problems. Unfortunately, Six-Sigma isn’t always used correctly. Six-Sigma is intended to solve complex problems that have numerous variables that cause variation in a process, which ultimately cause defects. Six-Sigma uses statistics to systematically identify what the different variables are doing in the process and points to potential solutions. It eliminates guessing as to what’s causing the variations. Again, fix the obvious problems first. Many problems don’t have to be analyzed to detect solutions. In many instances, the solutions are obvious: i.e., If the light bulb is blown, then, change the light bulb.

    Value Your People

    Society generally refers to companies as entities. We speak of IBM, GM, and Microsoft as entities; however, they are really groups of people. GM doesn’t build cars, the employees of GM build cars.

    To develop that culture as successfully as Toyota Corporation has, companies must first realize that they have to develop, nurture and value their employees. In order to build a culture of people wanting to continuously improve, people have to be engaged in their jobs. They have to feel valued by the company. They have to feel they are noticed and rewarded for their contributions. Ultimately, the company has to value having low employee turnover to create consistency. A company with high employee turnover cannot maintain a successful Lean environment.

    To foster this type of environment in today’s business world isn’t easy. There is low loyalty between U.S. companies and their employees for a variety of reasons. Some companies look at employees as an expense rather that an asset that can be easily cut. If employees of a company do not feel the company values them, they will find other jobs. With today’s business world, it’s difficult to implement a long term Lean strategy. Yes, a company can dictate to it’s employees to use Lean tools to cut waste, however, to sustain that ideology long term require an engaged, loyal, consistent, work force.

    Develop and Retain Strong Leaders

    Good managers are coaches, poor managers are dictators. A good manager will believe in the team concept where every member of the team is important and his/her opinions are valued. A good manager will value his/her employees and realize that for him/her to be successful, the team has to be successful. A poor manger will dictate to his/her employees, which creates havoc! A good, efficient, business unit with high employee morale will fall apart within weeks if a poor manager has taken over. Poor managers fail because they don’t have strong leadership skills. They lack people skills, communication skills, decision making skills, and delegation skills necessary to develop and maintain effective teams. A strong leader must sell the Lean Strategy and realize that ultimately the employees as a team are the ones to make it happen.

    Think and act World Class (even if not there yet!)

    To become Lean is to become World Class. When walking into a facility that has an unclean, unorganized work environment, one knows he/she haven’t walked into a World Class facility. There is no need to look at the productivity numbers to determine whether or not the facility is World Class. If a plant is World Class, it looks World Class as soon as you walk into the door.

    A Lean facility is thoroughly organized. Every process is clearly defined via standards. Production is operated via very clear Visual Management. A true World Class facility has the discipline to sustain organization. Outside auditors, potential customers and employees will be turned off if the work environment isn’t clean and organized. Keeping a work area clean and organized is simple; however, many companies overlook this simple task.

    Make Decisions Based on Logic and Not Politics

    Most of the time decisions made senior management are implemented without questioning regardless if the decisions make sense or not. Too many times, decisions are made by senior management without them fully understanding the process and issues. Lower-level managers ultimately implement ideas and strategies that are not based on logic but politics. They will implement ideas even if they themselves do not believe in them. This can create numerous problems which makes implementing Lean Strategies difficult.

    Decisions should be made throughout the organization through effective communication. Senior management should not just mandate, but sell their ideas and be open to questioning and suggestions from lower-level managers. Senior management should fully understand the issues and processes by effectively communicating with the managers at the different levels. Major decisions whenever possible should be made as a team vs. an individual.

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    Supply Chain Advances and Inadequacies

    Over the past 10 years a great number of businesses ranging from SME’s to Blue Chips have been rolling out or updating their Enterprise Resource Planning (ERP), Distribution Requirements Planning (DRP) and Advanced Supply Chain Planning solutions (APS). There are a variety of reasons for this intense activity, ranging from the need to consolidate IT following an acquisition, through to the desire to improve the IT capability in order to implement a particular supply chain strategy.

    When the dust settles after the implementation many businesses, having spent a lot of time and money, are left with a very inflexible IT solution whose core planning principles are routed in the thinking of the late 60’s, and not compatible with the agile, flexible, supply chain processes required to be competitive today.

    It seems that our understanding of what is required to build a competitive supply chain has evolved considerably over the past 40 years, however the range of IT solutions available to support our ambitions has not.

    The problem with Forecasts

    Fundamentally, most ERP/DRP systems provide a very robust operational platform, on which the majority of a business processes are supported, from Finance to HR. Where they are weak however, is in the provision of planning tools. Most come equipped with a basic MRP (Material Requirements Planning) engine, and the more advanced ones may supplement this with predictive safety stock planning or re-order point logic, usually under the guise of an Advanced Planning Systems (APS) module. Or to put it another way, your multi-million dollar IT super-car has a tractor engine lurking under the bonnet. The fundamental flaw with all of these MRP variants is that the starting point for all calculations is a Forecast.

    Most planners know that the best Forecasts are 70% accurate at best. APS systems may buy a few percentage points of improvement in exchange for a hugely disproportionate monetary investment, but have categorically failed to deliver the advertised benefits. The real problem is that MRP then compounds the situation by using this imperfect forecast to precisely raise planned orders and set predictive levels of safety stock. What this does is push wildly unplanned and unpredictable levels of inventory, effort and cost into our supply chain.