Customization at scale: A challenging proposition
Probably the best way to illustrate the power of Blue Yonder Production Planning is through a recent customer case study. A major original equipment manufacturer (OEM) of trucks, vans and buses needed to optimize its supply chain operations to produce several product variations simultaneously, to meet customer demand. The manufacturer needed to produce variations of both two-axle tractor units and four-axle all-wheel drive (AWD) vehicles.
This was not an easy task. The different vehicle configurations required diverse components and assembly processes. Belt structures needed to be fixed in advance, with a range of automated guided vehicle (AGV) belt structures required for different frame lengths. In all, at-scale customization meant the automaker had to create approximately 90 assembly stations, as well as high standardized part volumes. Clearly, this company required complex and individualized manufacturing capabilities, coupled with speed-to-market and a profitable production model. The OEM had to address three significant challenges.
First and foremost, the manufacturer required a program management approach that could change flexibly, based on the market situation. Quick, timely production sequencing and scheduling changes needed to be accommodated. The company needed a build-to-order environment that produced only the occasional stock vehicle.
As any manufacturer can tell you, this is an enormous hurdle. The lack of backstock makes an organization much more vulnerable to supply chain and environmental disruptions. It was crucial to have a high-volume delivery capability, ideally with a delivery time less than or equal to competitors. But, simultaneously, program management had to be profitable, balancing constant production with fluctuating market demand — a goal that many organizations strive for, but not all achieve. Operational flexibility was a clear, overarching requirement for this automaker.
A second challenge? The availability and number of order slots depended on the particular variants of each product in question. Every customer order had different manufacturing requirements, and slotting and sequencing would change with each order. But every order did not exist in isolation, so slotting and sequencing had to be orchestrated strategically across all orders.
This led to the manufacturer’s third challenge: Achieving a high level of throughput by intelligently balancing orders. To ensure profitable production, the mix of orders had to be maintained within defined limits. The number of vehicles in production at a given time had to drive efficiency, while minimizing the risk of delays and errors.
The numerical complexity of these three challenges demanded a digital, intelligent solution. Manual analysis, human cognition and non-specialized planning solutions were not up to this complicated task.
Blue Yonder Production Planning provides a solution
The OEM’s goal was to use a pearl chain approach to achieve profitable mass personalization. The pearl chain philosophy supports stable order sequencing, in which every product is made through a clear, pre-defined chain of actions. This approach is particularly useful because it maps the production sequence for complete vehicles — such as trucks and buses — directly to the fabrication of individual components like chassis, cabins, axles and engines.
The manufacturer chose to implement and manage its pearl chain production approach by partnering with Blue Yonder. Scheduling and sequencing capabilities from Blue Yonder enable the OEM to operate with maximum flexibility, while still tightly controlling the production environment and closely mapping final assembly to component production. As demand and orders shift, the solution supports autonomous, dynamic planning and re-planning for both final assembly and component production. As Blue Yonder software ingests real-time data, it instantly performs analysis and arrives at new order sequencing and slotting plans that maximize speed, efficiency and profitability.
To add even greater value, Blue Yonder’s scheduling and sequencing solution accommodates the business requirements of individual planners by allowing them to create their own unique production rules and constraints. For example, to ensure delivery timeliness, the OEM programmed the Blue Yonder solution to monitor level changes with a minimum lead time of three months, as well as prioritize a full order book. The automaker defined minimum and maximum quantities per time unit — such as a month, week or day — to ensure an optimal balance of orders. Lead times are factored in, and production rules are adjusted accordingly. Any empty slots are automatically filled with real customer orders.
The chosen solution also enables the automaker’s planners to simulate the results of different production schemes via what-if scenarios. Before they define new rules or make sequencing decisions, planners can see the likely impact on service levels, costs, waste and other outcomes.
