Resource Optimization Starts with Supply Chain Capacity Planning
LA: I’m here with Chris Platz from Woodward. Tell me a little bit about what you do at Woodward, Chris.
CP: Well, I’m in charge of our corporate supply chain. So I deal with all the machining aspects of the products that we bring in to Woodward, roughly about $400 million a year in spend. a couple of hundred suppliers that we deal with, people around the world.
LA: So what was the problem that you were trying to solve when you brought on aPriori?
CP: Oh, there’s a lot of problems to solve in supply chain management. The first is what is fair and reasonable to earn a profit? At the end of the day, we can meet with capacity planners, we can get quotes from dozens of providers, but what really is fair and reasonable when you come down and actually do pricing on a part? That was the first problem to solve. But we’re actually expanding it from there. We’re looking at production capacity and capacity planning within our supply base. There’s limited supply labor out there — staffing is difficult, especially for complex manufacturing processes, and most factories don’t have enough team members to meet the actual demand. So we really have to make sure we have capacity planning strategies in place so that we’re putting parts in the right place to make the best allocation of available resources. And obviously, we’re using digital factories to simulate current capacity in real time and to choose key suppliers that meet our capacity requirements.
LA: So you started off with using aPriori in the short-term to get pricing metrics, and then you’ve transitioned to using aPriori for demand planning over your whole supply chain. What’s next in your capacity planning process?
Planners Join Designers in Real-Time Decision-Making
CP: We’re going to move to the Cloud next, probably, and then we’re going to start doing overnight modeling with ERP. So as design engineering is designing parts, we can actually keep track of the cost of those items in real-time, which will reduce the amount of time it takes to forecast. We’re working on creating digital factories with our suppliers, negotiating the upper level labor rates, cost of raw materials, operating costs, direct and indirect overheads and margin. So we’ve got all that established right up front, we’ve got their equipment list built-in. So I can do capacity planning with less lead time, and answer the question: Can they meet demand? What’s their maximum capacity?
LA: So it’s a huge work saving for your procurement team members.
CP: It’s a one-to-one relationship, not a one-to-many, at this point.
LA: And the benefits of capacity planning extend to your suppliers as well.
CP: Absolutely. There’s no two ways about it. It’s perfect.
LA: Thank you so much for talking to us today.
CP: Absolutely. Thank you.
