Case Studies
Supply Chain Planning
WA global manufacturer of automotive products has 15 production facilities throughout Europe to serve a European customer base. The company makes around 20 variants of its product, not all of which can be made at each plant. Each plant has different capacity and their manufacturing output for each product varies from plant to plant.
The problem is familiar. What is the best way to allocate production across the factories to meet customer demand?
Typically they started with a “high-level” annual plan which comprised a yearly demand made up of actual orders in the short-term ( 1-2 months ), plus a sales forecast for the remainder of the year.
Not unlike many companies, they used complicated spreadsheets to “model” the business. At best they were inaccurate, time-consuming and difficult to understand, and at worst, they could result in seriously wrong and costly mistakes being made.
If the plan changed, e.g. new orders, changed orders, etc. it was difficult to adjust, the effects were difficult to quantify, and communicate to the plant management. Equally, if there were changes at the plant level, (e.g. machine breakdown, material shortages, etc.) which affected the plant’s capacity, then these too would impact on the high-level plan.
A major concern was the increasing transportation costs. Running in excess of £200m annually, they needed to re-organise the supply chain in order to achieve cost savings.
Orchestrate has been used to optimise the production allocation in order to minimise transportation costs.
The result is a 30% saving resulting in immediate bottom-line benefits to the business!
Furthermore, the plan now has visibility across all the manufacturing sites.
It means that changes can be swiftly communicated to plants, everyone can see and understand the effect, and communicate back.
It has also lead to better supply chain management,, improved on-time delivery performance, reduced stock levels and accurate predictability of customer deliveries.
Orchestrate is also being used to aid future investment decisions. For example, the company is considering expansion of one of its plants in Italy to meet growth in demand for a new product. The extra capacity this would provide will affect how production is allocated in the future, and what plants serve what customers.
With Orchestrate they can perform rapid “what-if?” analysis to produce optimum plans. |
