The great divide: conquering the gap between manufacturing & warehousing systems

There are 2 types of supply chain facility maintained by most big shippers. The first type is made up of a few, highly complex production sites—these are usually run by manufacturing teams equipped with manufacturing execution software to help streamline operations. The second type is a much larger number of distribution centers—often run by the logistics and operations teams with the help of 3PLs, Warehouse Management Systems (WMS), and possibly a Yard Management System (YMS).

The two types of facility rarely interact. Production sites live in their functional silo, and distribution centers focus on the demand trickling down to them from the Enterprise Resource Planning (ERP) software. The fact that there is so little interaction between the two types of facility is interesting because most production facilities have a nearby distribution center to receive finished products (and possibly a raw materials warehouse to source feeder stock to production, too!).

With such a tight geographic coupling, you would expect the manufacturing plant to communicate frequently with the distribution centers and vice versa, but in reality, the opposite happens today. More often than not, the DC’s customer shipments and the plant’s production schedule are not in sync and all sorts of operational disruptions occur. To understand why that is, it’s important to understand how these sites operate.

 

The layout of complex production sites

A complex production site that includes both a manufacturing facility and a finished goods distribution center is often referred to as a “campus”. This campus has an easy to understand flow of operations on paper:

  1. Raw materials are shuttled into the production building
  2. Production is run, producing finished goods
  3. Finished goods are shuttled or conveyed to the finished goods facility
  4. Customer shipments or STOs (stock transfer orders) are fulfilled from the finished goods facility

Unfortunately, it’s never that easy. Production schedules change, the finished goods distribution center also has to manage receipts from other sites, some customer shipments or STOs could be shipped straight off of the production line, and then there are all sorts of other standard DC constraints that the finished goods facility might run into like labor, space, or inventory shortages.

To fully operate these complex sites, a team of highly dedicated planners is responsible for controlling the movements of all inventory throughout the facilities. This means all of the following tasks need to be performed in sync to meet end-customer shipment times and prevent bottlenecks:

  • Managing raw material transfers into production
  • Line loading directly from production where possible
  • Planning shuttles between buildings
  • Allocating inventory for customer shipments
  • Waving out work for the loading & unloading of trailers
  • Managing the case pick queue
  • Ensuring Replenishment tasks are triggered in a timely fashion

To do this effectively, most sites leverage an early morning planning meeting and a whole lot of grit and elbow grease to handle around the thousands of exceptions that come up. As the demand from the business continues to grow, this combinatorial scheduling challenge has become untenable.

 

Rewriting the campus software ecosystem

To make operations even more complex, the team of planners has to interface with multiple different software systems to even understand the current state of the operation. Because of this, making ends meet is the objective and optimizing activities is wishful thinking.

Unfortunately, this practice of just “making ends meet” results in millions of dollars of inefficiencies. If you ask any Director of Logistics which site is the biggest pain, it’s almost a guarantee that they name a production campus. Most organizations recognize that campuses are inefficient, but there is almost no solution on the market today that helps them to optimize their operations, reduce bottlenecks, and increase capacity.

This is where WMS accelerators come in. Solutions developed like AutoScheduler.AI’s AutoScheduler platform exist for the sole purpose of providing advanced prescriptive analytics on top of existing software systems to perform 3 functions:

  1. Aggregate all of the data across disparate software systems
  2. Predict what is going to happen and which processes will be the biggest bottlenecks
  3. Prescribe the optimal plan of activity so that all work is completed in an orchestrated, optimized fashion

This WMS accelerator software is designed to optimize all functions simultaneously. Instead of reviewing production schedules, receipts, picks, STOs, and customer shipments as separate processes, they are all planned in tandem to maximize efficiency and smooth transitions between the historically siloed operations.

This manifests in a massive number of benefits to the site. Raw materials receipts can be sequenced to ensure production doesn’t go down while simultaneously understanding when to bring in loads based on constraints from other parts of the business like dock space. Line loading from production can occur to meet orders and reduce touches. Receipts and shipments can be balanced while considering dock/staging space and labor availability. Transfers can automatically be created to ensure all orders are fulfilled On-Time-In-Full while simultaneously minimizing the number of bring-backs (reducing transportation costs and increasing trailer fill). A more streamlined operation results in a need for less planners and increased capacity per floor staff.

In the end, this orchestrates highly complex sites with numerous functional silos to run smoothly with minimal disruption and maximum efficiency. Planning automation occurs every few minutes, changes are made, and the site continues to operate at the optimal level while respecting the multitude of constraints that exist. That’s nirvana, right? Well, it’s now much more possible to get there.

 

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