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Modern manufacturing relies on collaborative know-how

This article appears in the issue May 1999 [Volume 8, Issue 5]

During the last two decades, discrete manufacturers have pushed more and more of the traditional factory out into the supply chain. Today, suppliers not only bear inventory risks but also the production changeover costs. As a result, the current challenge concerns communication as much as control.

As the number of outside suppliers grows and the complexity of the relationships deepens, a greater number of final manufacturers operate in an environment resembling an automotive OEM supply chain. As discrete manufacturers participate as either a hub or spoke or both in a network of constant product introduction, there is a very active and constant process of product and option revision and rationalization. Sales and marketing, manufacturing, engineering and procurement all play an important and collaborative role.

This is where knowledge management enters the picture. Shrinking product lifetimes force manufacturers and their supplier partners to exchange vital, if short-lived, information. Collaborative relationships are fluid and renegotiated constantly. There is a clear need for information-sharing applications before, during and after production across a supply network.

Having taken initial steps toward materials and distribution-focused collaboration, leading manufacturers are embracing a move from ‘getting the orders and the plan right"to an endgame shaped by manufacturing concerns. Today’s efforts are galvanized by two challenges: synchronizing product orders and manufacturing process integrity and meeting customers’ and suppliers’ demand for production visibility.

Product life cycle collaboration and the production information desk are two kinds of collaboration discrete manufacturers are commonly supporting or considering.

Product life cycle collaboration strategies create a coordination point for product and process definition and change in the extended enterprise. In most cases, the objective is to reduce new product development time either by speeding collaboration with suppliers or reducing the number of internal engineering and documentation applications clogging the product rollout process.

Production information desk applications function similarly to the customer service elements of an airline’s Web site. Those extranet applications are being used as repositories for data related to active production. Audiences ranging from customer service reps, salespeople, customer planning and engineering groups use those sites to query the status of pertinent orders.

In both instances, in-house IT projects, rather than packaged applications, are the rule rather than the exception. Manufacturers are combining traditional transaction applications such as enterprise resource planning and product data management (PDM) with groupware and Internet technologies to create a competitive advantage.

Product and process collaboration extends beyond planning

Having replaced inventory with information, the next logical challenge is speeding up the process of moving data through the supply chain. From telecom equipment to automotive parts, product life cycle collaboration typically focuses on reducing information turnaround and replicating best-in-class manufacturing processes across global organizations.

Configuration management, for many OEM assemblers, connotes managing the communication of change to providers of commodity manufacturing services and materials. The greatest complexity comes from the constant editing and communication of product bills, workflows and, ultimately, inter-enterprise business processes. In other words, time, date, customer and configuration, and supplier contract may all play a role in defining which member of the supply chain is responsible for on-time shipment to the customer.

On a daily basis, companies are colliding with the same communication and coordination issues traditional, integrated complex product manufacturers had inside their plants. That extends to managing multiple versions of product configurations, obsolete inventory, part shortages, outdated assembly instructions, and tracking as-built data. However, the speed and scope of the problem have changed dramatically. It is highly doubtful any make-to-order shop in 1980 could have imagined managing 300 product introduction-related change orders a day across a tiered network of over 200 suppliers. This is the pace for many high-tech manufacturers in the global economy.

Sales configuration and engineering change functions may not be converging but they are increasingly aware of each other. Corporate IT is also aware, painfully so, since it is supporting best-in-class applications to manage product configuration in at least three, if not four, separate departments. IT departments find themselves managing parallel systems and juggling heavy administration costs. Worse, they support manual processes and bear the risk of inaccuracies at every handoff.

In order to bring sanity to the process, manufacturers choose a system of record and, at the outset, decide whether or not to pursue a unified internal platform for product and process engineering.

There are signs the commercial market is waking up to that opportunity. Despite the potential for consolidation, the near-term prognosis for most users is they will continue to manage parallel systems for product and process configuration in the front office, back office and various engineering groups.

Consolidation of the engineering and manufacturing applications may be an acheivable goal. PDM vendors such as MatrixOne (www.matrixone.com), Agile Software (www.agilesoft.com) and Parametric Technology (www.ptc.com) are positioning themselves as the best candidate to be a system of record within collaborative extended enterprises. Leading enterprise vendors, such as SAP (www.sap.com), Oracle (www.oracle.com) and I2 Technologies (www.i2.com) will not be content to cede their turf.

However, for the time being, most companies are resigned to paying the price for best-in-class applications for the various silos of enterprise automation. Thus, in the immediate horizon, the best opportunity exists for focused systems integrators and enterprise application providers. Primix (www.primix.com) and Inventa (www.inventa.com) are two examples of consultants actively integrating front-end configurators to back-end systems. At the same time, actual physical assets, established ‘human automation" practices and software investments play such a critical role that few companies were relinquishing the lead project management role to an outside player.

Risk-sharing drives factory data exchange

Think of it as MyOrders.com for your supply chain. Reducing the cost of answering the question, "Where is my order?"drove first-generation efforts to post production data on the Internet. Second-generation efforts are more formal and are recognized as a form of output management. When defining those projects, manufacturers focus on security management, data granularity and improved production data collection.

Pioneering manufacturers are already in discussion with vendors about migrating away from home-grown intranet deployments. Concrete projects by vendors Datasweep (www.datasweep .com) and IndX (www.indx.com) are in the early stages of implementation. Traditional discrete MES vendors such as GR Software (www.genrad.com), Real World Technology (www.realworldtechnology .com) and USData (www.usdata.com) will be competitive players as well. USData’s recent alliance with portal technology provider TopTier (www.toptiersw.com) is likely to be the first of many focused partnerships. The ERP vendors, such as Peoplesoft (www.peoplesoft.com) and Baan (www.baan.com), are likely to leverage their comprehensive portal strategies. For the present, those are less tangible in terms of product but formidable in terms of established customers. Competition could quickly become furious in the high-tech industry. Varied rivals such as component-supplier player Aspect Development (www.aspectdevelopment .com) and PDM provider Agile Software could join the fray.

Knowledge management moves into high gear

Too often discussions of knowledge management practices have remained the bastion of theory and idealized models of how people should work together. With the viral spread of Internet throughout business, companies have often continued that tradition by limiting knowledge management to the development of online forums for the exchange of internal best practices.

However, discrete manufacturers operate in a fast paced, collaborative world outside the company’s walls. Their need for focused collaborative applications represents a concrete opportunity for knowledge management to improve the state of the business in a dramatic manner. That is especially true as manufacturers try to move beyond their largest partners and automate value-added communications with their entire supplier base. As manufacturers reach out to their smallest suppliers, lower cost of ownership and ease of use become mission-critical.

Critically, the potential lies not in static repositories or process models. Rather, the challenge is managing the dynamic change. Rapid product innovation decreases the half-life of a manufacturer’s entire knowledgebase. As they configure to the customer order, many discrete manufacturers even extend the change process all the way to the shop floor. Work instructions have always been an everyman example of codified, static knowledge in manufacturing. Today, manufacturers are delivering dynamic instructions for once-in-a-lifetime, customer-specified orders.

Unfortunately, those developments proceed informally under various guises today. They take the form of local, tactical reactions rather strategic pursuits. And, only in the most forward-thinking companies, are those efforts understood as a component of a knowledge management process. True learning organizations move into high gear by incorporating their supply chain. The issue is whether or not your company appreciates the scope of the shift.


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