Brexit has focused the attention for manufacturing companies but there are fundamental aspects of the manufacturing sector that need to be addressed – most notably culture, training and education. Roger Fleury, Director, Ardent Solutions and Kevin Boake of B2Wise make the case for innovative thinking as well as technology to inspire the next generation.
The news generally from manufacturing companies has been positive post Brexit – with British manufacturing rising up the global rankings, according to figures from EEF, the manufacturers’ organisation and Santander. Britain is now the ninth largest industrial nation with an annual output worth $247 billion, with manufacturing also accounting for 14 per cent of business investment and 68 per cent of business R&D. In addition, according to the OECD, UK manufacturers have outperformed any country except the United States for job creation since 2010.
However, concerns continue – not least regarding the ongoing skills shortage and the challenge of recruiting into the industry. When the best young brains in the UK consider their careers, manufacturing is still low down the list. Indeed, when looking at global STEM graduates the UK doesn’t even figure in the top six. Just look at our top manufacturing degree courses and the majority of both students and lecturers are from overseas.
Rapid technological innovation is set to change manufacturing fundamentally over the next decade, as the impact of digitisation technologies including Artificial Intelligence and Virtual Reality becomes clear. According to the PwC recent Industry 4.0 survey, the biggest implementation challenge isn’t the right technology, it’s a lack of digital culture and skills.
Today’s new recruits are a digital-first generation; they are actively seeking technology innovative organisations and looking for skills diversity. Those organisations exploring AI and IoT will have obvious employment appeal. But state of the art technology alone cannot transform an essentially inefficient manufacturing model. With growing numbers of organisations admitting to turning off their MRP systems due to their inherent inability to manage today’s complex and volatile supply chains, there is a rising reliance on manual planning processes and spreadsheets. Luring a millennial to the business with IoT and then presenting a tortuous and inaccurate planning model is a fast track to disengagement and staff turnover.
New thinking is required that reflects the reality of today’s global supply chain. Organisations across the US and Europe have already begun to embrace planning methodologies created specifically to support a volatile and customer focused marketplace – such as Demand Driven MRP (DDMRP).
Planning in an uncertain world requires a radically different approach to traditional MRP methods that institutionalise forecast errors and order volatility. Demand Driven MRP removes the overhead of perpetually adjusting order recommendations while dispelling the myth that you just need more inventory to maintain higher service levels.
The simplicity of the Buffer Zone concept underlies a strong analytical and rigorous approach to material planning. Strategically positioned inventory is designed to decouple supply and demand in order to reduce variability whilst at the same time compressing lead times.
DDMRP delivers the answer every finance and operations manager should want to know:
How to get the right stock in the right place at the right time
Demand Driven MRP has evolved just in time to cope with modern market conditions that are here to stay.
DDMRP was introduced to the world by Carol Ptak and Chad Smith in the revised third edition of the book that kicked off MRP, Orlicky’s Material Requirements Planning.
“In the 1950s, a planning method was conceived called “Material Requirements Planning (or MRP).” MRP changed the world of manufacturing forever. But times have changed-customer tolerance times are much shorter, product variety and complexity has increased, and supply chains have spread around the world. MRP is dramatically failing in this “New Normal.” Demand Driven Material Requirements Planning (DDMRP) is a practical, proven, and emerging method for supply chain planning and execution that effectively brings the 1950s concept into the modem era. The foundation of DDMRP is based upon the connection between the creation, protection, and acceleration of the flow of relevant materials and information to drive returns on asset performance. Using an innovative multi-echelon “Position, Protect, and Pull” methodology, DDMRP helps plan and manage inventories and materials in today’s more complex supply scenarios, with attention being paid to ownership, the market, engineering, sales, and the supply base. This method enables a company to decouple forecast error from supply order generation and build in line to actual market requirements, and promotes better and quicker decisions and actions at the planning and execution level. DDMRP is already in use by MAJOR Global 1000 companies.”
For full details on the principles of DDMRP also see Demand Driven Material Requirements Planning (Ptak and Smith, Industrial Press, 2016)
Offering new recruits the chance to be part of this innovative approach, rather than hamstrung by planning models developed over half a century ago, offers clear appeal. From technical training to creating a new culture of manufacturing thinking, DDMRP supports today’s global supply chain challenges and opportunities – and enables organisations to effectively explore the potential of digitisation technologies.
Manufacturing is on the up but in a fast changing and challenging economic climate, the onus is on UK business to take a long hard look at the future, especially the role innovation – both technology and process – should play in enticing new recruits to the sector.