Insurance can’t fix the gap between Planning and Execution

In manufacturing, execution rarely aligns perfectly with the original plan. To deal with this, manufacturers buy what essentially amounts to “insurance policies”. These include everything from longer order lead times and excess inventory to overtime labor and premium freight. The general idea is to absorb the shock of plan variances. But often, the mix or volume of these buffers isn’t quite right to handle execution variance effectively anyway. All of this drives up cost and complexity. Yet, that’s exactly how most manufacturers are forced to operate. They are spending money to buffer against unknowns that a tighter connection between planning and execution could mitigate.

The hidden costs of buffering against uncertainty

So even with “insurance,” manufacturers still face unnecessary inefficiencies and disruptions. They then scramble to adjust the plan, communicate changes, and reset customer expectations, all at a high cost to performance and customer satisfaction.

The underlying reason is twofold: technology limitations and siloed systems. The technology was never powerful enough to do it, and a real-time optimization layer was missing.
Historically, ERP and planning systems were disconnected from execution realities. Each team operated within its own silo, planning, procurement, materials, and scheduling, often working against each other rather than as an integrated operation. This siloed structure meant any adjustment in one area could unintentionally confuse another.

In the absence of powerful optimization and unified data models, heuristics were used instead of true decision-making engines. The result? Suboptimal outcomes forced companies to keep defaulting to costly safety nets.

Breaking the siloes: Why traditional systems fall short

But with new technological advances, we’re now at a turning point. By closing the gap between planning and execution, you can unlock two major forms of value: efficiency and responsiveness.

Though continuously planning and incrementally adjusting for what is going to be executed, businesses can:

• Reduce their reliance on buffer stock.
• React in real time to demand shifts.
• Inform customers of realistic and accurate delivery schedules.
• Eliminate over-reliance on costly insurance-like buffers.

By doing this, you can now deliver to market, and you don’t have to make educated guesses at the insurance policies you’re going to need. This isn’t theoretical. For example, in automotive, what used to be a 60-day vehicle order-to-delivery cycle can now be done in 14 days, because the system dynamically tests and adjusts in real time without hurting, e.g., paint shop sequencing or engine-transmission coordination.

We can test in real time whether we can make the change and still execute per the KPI. That’s the shift from static planning to Enterprise Resource Execution (ERE), a complete rethink of the traditional ERP structure.

From theory to practice: Real-time execution in action

Finally, how do we solve it? The answer lies in unified, composable platforms, built with real-time optimization, robust manufacturing execution representation, and a shared data model at their core.

If execution can become a single version of the truth and in real-time adjust for changes in the mix and volume or changes in supply, now it provides manufacturers with the ability to do Enterprise Resource Execution.

With Eyelit Technologies, this is more than theory. Our integrated planning, scheduling, and execution capabilities close the gap, enabling dynamic decisions during execution that reach back into planning and forward into order fulfillment without requiring a full system overhaul. Therefore, you don’t have to live with the pain of forecast error; you can completely close that gap between planning and execution.

The manufacturing world no longer has to run on outdated assumptions. Buying insurance to cover a broken system is no longer necessary. So why not achieve real-time planning, scheduling, and execution that adapts to every disruption and every opportunity?

Are you ready to bridge the gap between planning and execution and take the next step on your digital transformation journey?