Current situation: Extensive challenges in global value chains
The consequences of the Covid-19 pandemic are posing extensive challenges for many global value networks. Low capacities and increasing industrial production are currently affecting supply chains and the global movement of goods. In addition, a limited range of air cargo space and capacity bottlenecks in sea transportation are adding to existing challenges. As a result, air and ocean freight rates will remain high.
Challenge: Planning and managing supply chains
In the near term, increased protectionism will have an additional influence on supplier networks: Trade barriers, such as changed customs formalities resulting from Brexit, or simmering trade conflicts, such as those between China and the USA, will make planning and managing supply chains much more difficult. Insolvencies or fluctuating customer needs due to shifts in demand, such as for semiconductor chips in the automotive and consumer electronics industries, amplify these uncertainties.
Impact: Customer satisfaction decreases as costs rise
With production and delivery backlogs, customer satisfaction is drastically reduced. Transportation costs for special trips are increasing while lead times and delivery times are getting longer, which has an extremely negative impact on efficiency.
“In order to counteract the risks, it is necessary to build a robust value network that is transparent and flexible across all levels. This is the only way to quickly identify performance and acute weaknesses."
Katharina von Helldorff-Mager, Partner at 4flow
Solution: Ensuring delivery capability at short notice with active task force management
With active task force management, critical situations such as delivery bottlenecks can be promptly addressed. Acute risks are recognized quickly, while targeted measures are implemented to ensure delivery capability at short notice and to stabilize the supply chain.
Task force management methods
The task force comes into play when supply chain planning and management is affected. Acute risks should be identified immediately and targeted measures must be taken at once to promptly address delivery bottlenecks. In this way, the roles of task force members are defined in detail, and resources and relevant information are bundled. At the same time, coordination and decision making are facilitated by informal information channels. The objective is to ensure delivery capability on short notice and to stabilize supply chains.
Success factors: Identified and established from numerous 4flow task force projects
Mission control room
Task force members and their roles are defined right from the start while all resources and relevant information are centralized in a mission control room. This is also where daily situation briefings take place – both online and offline. Alignment is carried out quickly, decisions are made, and progress is evaluated. Members of the task force work together in the same room at all times, which ensures quick, informal paths of communication.
Best and most reliable information
The work of the task force is based on data and information. Initially, necessary information is consolidated and processed. This pooled data serves as the “single point of truth” for all members of the task force – it creates clarity about the current situation and absolute transparency about material requirements, inventories and available production and transportation capacities.
“The live dashboards offer quick and reliable access to all information. This means that every task force member is able to provide management with updates at any time. Additionally, specifically defined key performance indicators make it easier to quickly recognize decisive developments and to measure and evaluate progress."
Hanka Smiejczak, Principal at 4flow
Well-founded decisions are made within an optimal time frame. This is due to the fact that the task force works out and prioritizes suitable measures for the respective challenges with the utmost precision and competence on a daily basis. They verify the effectiveness of the measures and ensure and implement them upon approval.
Getting ahead of the game
To make time-critical decisions on complex measures at short notice, a suitable structure is essential. In the intensive processing phases, a Kanban system enables the visualization, coordination, and prioritization of open tasks. This shows exactly how many tasks are processed at the same time to achieve the greatest possible benefit. In quieter phases outside of peak work hours, it is essential to evaluate achievements and objectives and to draw conclusions about upcoming tasks to stay a step ahead of the game.
Reconfiguring value networks
After a short-term disruption has been dealt with, long-term stability in the value network needs to be addressed. The task is to optimize forecasting and sales planning and to achieve transparency in the processes of production planning, production control and order management. The consistent introduction of integrated supply chain planning processes and systems not only enables faster responses but also to scale volumes up or down in a quick and agile way. In addition, a Transportation Management System (TMS) helps reduce costs and to deal with disruptions and deviations in a more targeted manner. To anticipate and resolve bottlenecks, the introduction and use of a WMS is a clear advantage. Digitization in the plant enables the continuous tracking of inventories and capacities as well as the monitoring of parts quality.
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