e-manufacturing gets started
Yes, Virginia, it's been slow coming, but the tools are now available for manufacturers to take their processes to the Web.
By Bob Trebilcock, Contributing Editor -- Modern Materials Handling, 5/15/2001
At the height of dot com fever, the letter e preceded nearly everything. We saw e-business, e-commerce, e-tailing, e-fulfillment, and e-finance. The world was e-volving. We were in the middle of an e-volution. Shoot, it was e-mania.
But rarely did we see e-manufacturing.
It was as if the economy was throwing an Internet party, and manufacturers weren't invited.
"Manufacturers were inundated with advertising from companies that claimed to put the dot in the dot com," says John Bridges, vice president of marketing for IFS North America, Chicago, Ill. "But the messages were all about e-tailing and the consumer. The manufacturer wondered: Why do I care?"
Quite honestly, answers were few and far between. When manufacturers were mentioned, it was in the context of eliminating the traditional distribution and retail channels that do the warehousing, packaging, selling, and servicing for manufacturers.
The response from most manufacturers was a combination of skepticism and false steps.
"Manufacturers were told they were now going to serve a customer base of one," says Kevin Prouty, research director, manufacturing strategies, AMR Research, Boston, Ma. "And that was a customer who would deal with them based on how easy they were to do business with. That scared manufacturers."
It was a wake-up call. Although the dot coms that were going to rule the world have gone bust, forward-thinking manufacturers realize that the last few years were only the first mile of an ultra marathon. If manufacturers are going to compete, they need to find ways to take their business process to the Web and to connect with their customers.
It's time for them to put the e in front of manufacturing.
Now, we're not talking about manufacturing in cyberspace. Rather, this is about re-thinking traditional processes and relationships with suppliers and customers, and enhancing those with technology in order to collaborate with trading partners in real time.
Call it e-manufacturing or collaborative manufacturing.
| e-manufacturing creates a window onto the shop floor |
|
|
In the traditional manufacturing model, the plant is an island of automation. Orders enter the factory at one end and finished goods exit the other end. But in between, the activities on the shop floor are invisible to suppliers, customers, and even the rest of the enterprise unless the plant chooses to share the information. |
|
|
The e-manufacturer is integrated with the rest of the supply chain. Orders still enter one end and finished goods exit the other, but the activities on the shop floor are now visible in real time to trading partners. |
While collaboration is an oft-used word, sharing accurate real-time data is at the heart of e-manufacturing, and e-manufacturing is the essence of business-to-business e-commerce.
By all accounts, we are at the very front end of the Web-enablement of the manufacturing process. Draw a timeline from the Stone Age to Star Wars, says AMR's Prouty, and the Fortune 100 have launched Sputnik: sure, they're the first into outer space, but there's a long way to go before they conquer a galaxy far, far away.
As to the rest? "They're still dragging their knuckles," says Prouty. "Most companies are struggling to survive."
For the first time, manufacturers have a genuine interest in these new processes. "A year or two ago, no one talked to us about e-manufacturing," says Gregory C. Gorbach, director of e-Manufacturing, ARC Advisory Group, Dedham, Ma. "Today, the calls are going through the roof. This stuff is real, even if only a few companies have actually implemented an e-manufacturing strategy."
The companies that have found a way to juggle the competing goals of lowered inventory but higher customer service are few and far between, resulting in a kind of manufacturing Darwinism. "The leaders in virtually every industry are continuing to improve while the average players continue to remain average," says Gene Gutman, a partner in the supply chain practice at Accenture, Dallas, Texas.
The result is a widening chasm between competitors.
e-manufacturing to the rescue
E-manufacturing is in part an attitude. Manufacturing partners must be willing to agree on a set of business practices, to share information, and to compete as if they are one vertically-integrated company. Everyone must win, not just the channel master.
But it is an attitude enabled by technologies and the Internet that shares that information that has been locked in departments for years: While supply chain visibility and event management focus on order fulfillment activities, e-manufacturing looks at all of the processes involved in getting a product to market.
Gene Gutman and his colleagues at Accenture have identified at least six key processes that can benefit from collaborative manufacturing:
Planning and Scheduling, including forecasting, the positioning of material to fulfill demand, and capacity management.
Product Design, including mechanical design, electrical design, test design, and de-sign for supply chains.
New Product Introduction, including bill of materials management; prototyping, design validation, testing, and production validation testing.
Product Content Management, including change generation, change impact assess-ment, product change release, and change cut-in/phase in.
Order Management, from order capture to order tracking and exception management.
Sourcing, including approved vendor management, strategic sourcing, and supplier selection.
The ultimate point of those systems is to react to demand in real time.
Making the move
Before making the move to e-manufacturing, addressing the fundamentals of your business processes and strategies to create value for the enterprise is an imperative. "Before you can collaborate with your trading partners, you need to address infrastructure issues first," says John Bridges of IFS North America. "If an inventory control or manufacturing system needs to be fixed, start there and build out."
That point is echoed by Accenture's Gene Gutman. "Your focus has to be on execution at a much higher level of precision," says Gutman. "If not, your old problems will be coming at you faster with even less time to react than before."
The new infrastructure needs to be designed around data integrity. What's more, that data has to be in a form that can be shared. "It's no good to clean up your processes if you're still generating paper reports and designs," says Mike Mansbach, vice president of marketing and business development, See-Commerce, Atlanta, Ga. "You have to convert that information so it can be transmitted electronically."
Next, you have to understand how the Internet and collaboration can enable a new business strategy and design, test, and build a solution to enable that process.
To extend those processes to your trading partners, you need a platform to provide connectivity and integration across the supply chain. In the view of many, trading exchanges, marketplaces, and private exchanges are filling that role.
"Marketplaces haven't fared well so far," says David Cope of Extricity, a Belmont, Calif., vendor recently acquired by Peregrin Systems, "but businesses are beginning to realize that if they are going to collaborate, they don't want to manage thousands of connections with their partners if they can manage just one. Providing that connection seems to be where e-marketplaces are heading."
This is still an e-volving area, but as the e-tailers fade, it does appear as if manufacturers are stepping up to the plate.
"The opportunity to leverage the Internet is beginning now," says Mike Mansbach of SeeCommerce.
Click on this icon to read more about e-manufacturing.
Taking the pulse of ERP
01/31/2001Swisslog focuses on North America
03/31/2001Software: A new supply chain by design
11/30/2008Software Alert! - September 2006
09/20/2006
View All On-Demand Webcasts
