In March, we undertook an extensive trip to China with PAILOT and held open discussions with several manufacturing companies about their corporate strategy. What was striking was the uncompromising willingness to innovate and the determination to gradually digitalize and automate production and work towards AI-based processes. While in Germany the consequences of potential projects are debated for two years, in China AI projects are implemented as pilot projects within a few months, with half the effort.
Challenges in digitalization and AI implementation
The large manufacturing companies in Germany are aware of this and are launching a series of AI projects. Medium-sized companies were hesitant for a long time, but are increasingly taking measures to ensure they do not fall behind. It is often difficult for companies that are looking at digitalization and AI innovations for the first time to identify the right topic to start with. In addition, not all companies have the same level of digital maturity - the choice of topic should be adapted accordingly.
Experience from 8 years of AI projects
Over the past 8 years, we have both seen and implemented numerous AI projects - for companies of all sizes. In the course of these collaborations, we have realized that AI can address a variety of topics, each with a different cost-benefit ratio. Through our experience with AI in various successful projects within these 8 years, it has become clear to us that detailed planning in manufacturing companies often acts as an optimal starting point for the implementation of AI to maximize the return on investment.
Why is detailed planning important in companies?
To understand the relevance of this assessment - why is detailed planning important in companies at all and what impact does an improvement in detailed planning have? It is obvious that planning processes are extremely complex! So complex, in fact, that we cannot claim to explain them fully in this short article. Planning processes permeate all organizational areas of the company, be it sales, purchasing, scheduling or production itself.
A crucial step in the planning process is rough planning, which provisionally determines the delivery date and ensures that material availability is guaranteed. However, rough-cut planning does not take into account production capacities such as machines or labor - this falls within the remit of detailed planning. Detailed planning therefore determines the exact sequence of production and the optimal utilization of existing production resources.
You can find more details on detailed planning vs. rough-cut planning in our article Rough-cut planning and detailed planning.
Current practice of detailed planning in SMEs
Nowadays, it is common for small and medium-sized companies in particular to carry out rough planning in the ERP system. Detailed planning, on the other hand, is often carried out either by individuals or in complex Excel spreadsheets that are only overseen by one person. Detailed planning is an extremely complex problem with a direct impact on capacity utilization, throughput, lead time and production costs. To illustrate the complexity and relevance: there are 3.6 million possible detailed schedules for just 10 orders on one machine. But which company has so few orders on just one machine?
Advantages of AI-based detailed planning
Detailed planners have a challenging task to master, as they have to constantly adapt their plans - they are never fully completed! Whether a machine breaks down, someone falls ill, an urgent executive order needs to be prioritized (we discuss whether and which executive orders make sense at all in this article) or the customer wants an earlier delivery date. This is where AI can enable a rapid response to changing conditions. It can suggest the best possible plans for the current circumstances to the detailed planner at the touch of a button. This provides the detailed planner with essential support and allows them to consider the effects of decisions together with production, scheduling and sales at any time.
While it would take a person a long time to create an optimal plan, this is now done at the touch of a button. This increases resource utilization, punctuality of delivery dates, increases throughput and improves throughput times. In the future, AI could even make suggestions to adjust shifts or staff schedules to enable drastic cost optimizations depending on the company's current situation.
Short and sweet
Intelligent detailed planning based on AI starts at the core of the company - where the real value is created: in the optimal use of available resources, be it personnel or machines. At the same time, it has a positive impact on sales, scheduling and production and enables them to make decisions on a sound basis.
