Do you keep an eye on your supply chain transparency?

The customer is the best appointment hunter in the company! Does that also apply to you? Or do you know what is going on in your factory, in your materials management, in your supply chain? In our projects, we repeatedly find that many companies don’t really know this. When we ask about basic key figures such as inventory ranges, delivery readiness levels or plant utilization in projects, we sometimes don’t get spontaneous answers. Detailed information such as delivery status and production progress is even less transparent.

Why is there so little overview in the supply chain? In my experience, there are four main reasons for this: lack of data integration, data quality, functionality and organization.

In companies with sales branches or production plants in different countries, it is not uncommon for other ERP systems to be in use at various subsidiaries in addition to the ERP system at the company headquarters. This can make perfect economic sense, but the entire supply chain should still be mapped in one system. This is often easier to accomplish in an add-on system than in the central ERP system.

If an ERP system is fed with incomplete, incorrect or outdated data, the system will not show a realistic operating status in the factory or the entire supply chain anyway. Since no user or manager trusts the data, they will react according to the situation, but will not trust themselves to make long-term and therefore timely statements about completion dates for production or customer orders with regard to delivery dates for orders. Even if the required functionality is available in the ERP system, nobody will run evaluations because nobody believes the figures.

However, the functionality required to carry out differentiated analyses of production progress and impending backlogs of production orders and customer deliveries is often lacking. Many ERP systems do not even have a usable multi-stage availability check, which means that delivery dates are given that cannot be met from the outset. If capacities cannot be flexibly adapted to requirements, but on the other hand the ERP system cannot handle order planning against limited capacity, the ERP system in turn does not show a realistic operating status in the factory or the entire supply chain.

Even if the data quality is right and the planning and control functionality is available, sometimes nobody finds the time to monitor the delivery status of all articles and orders in the daily duel with customers and orders or – even worse – it is not defined at all who checks the order situation how often and when and who informs the customer.

Ultimately, in many companies it is not even precisely defined who is responsible for monitoring the overall context and who has the competence to initiate strategic measures to balance delivery capability, availability and capacities.

The planning and control train is also moving towards automation. It’s time to lay the tracks, otherwise Factory 4.0 will fall into the track bed.

Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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