Operate reliably to meet customer commitments

What is your reputation worth to you?

American businessman Warren Buffet said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” It doesn’t matter if you have been delivering on your customer obligations for 20 years; all it takes is one missed delivery to sow the seeds of doubt in your customers’ minds.

Many companies missed deliveries in the last eighteen months due to supply and demand disruption, and faced increasing costs to fulfill previous obligations to customers and by responding to the shifts in demand. While most customers were understanding of delays during a pandemic, they won’t be as flexible when businesses settle and operate in what’s considered the “new normal”. Now is the time to start rebuilding their trust and preparing for demand rebound and sustainable growth. That starts with building a value chain that can profitably and reliably deliver on your customer obligations and allows you to reduce the impact of external disruption on your operational efficiency.

Value chain reliability is based on predicable production asset availability and operational efficiency. Reliability can also be improved with sales and operational planning and supply chain management to create feasible production plans. Unfortunately, operational planning, supply chain management, and production operations often occur in isolation. Planning decisions based on forecasts and assumed operational capacity often deviate from demand or operational and supply reality. Corrective actions cause disruptions to production schedules and daily operations. These disruptions result in waste and loss such as production downtime or rework and delayed shipments. They can also lead to additional costs such as overtime pay, demurrage, or expedition fees and in lost customer trust.

Fortunately, there are several opportunities to improve the reliability of your value chain by leveraging today’s digital technologies. You can overcome the inefficiency of functional silos in operational planning, supply management, and production execution by enabling your people and systems with cross functional visibility into the business and access to operational status information.

Many organizations develop control towers or operations centers to overcome the impact of information silos and enable collaboration across teams. These centers consolidate and contextualize the information views across planning and scheduling, inventory, and plant execution, for end-to-end asset and process visibility and improved decision support. This helps to minimize the impact of external and internal disruption on operational execution and to deliver on your customer commitments.

Cloud computing and services make it feasible to bring operational and engineering data together in context and combine it with advanced data analytics to uncover new reliability and efficiency improvement opportunities. There’s a wealth of utility in your data when you’re able to identify complex data relationships to improve the utilization of production assets and reduce the risk of unplanned production downtime.

Within the plants, the utilization or equipment effectiveness of production assets is further improved with advanced process control or by leveraging machine learning and AI to maximize asset reliability and process profitability while minimizing energy consumption.

That’s what we call Value Chain Optimization at AVEVA, bringing together edge to enterprise visibility in the cloud, with integrated production planning, scheduling and execution. AVEVA provides you a complete software portfolio to continuously improve your operations and reliably deliver on your operational plan in time, in full, and meet commitments made to your customers.

When you are ready to learn more about AVEVA’s Value chain optimization approach, see our Reliability infographic.

Check out our previous blog on reducing waste by optimizing your value chain.

Stay tuned for the next blog on improving value chain agility!