ADC & collaborative manufacturing

Shop floor data, once used only within the four walls, is becoming essential to the relationship between manufacturers, their customers, and suppliers.

By -- Modern Materials Handling, 3/1/2001

Q & A with Greg Gorbach, ARC Advisory Group

Q: A year ago, few people were talking about collaborative manufacturing. But now it's on a lot of people's minds. What is it exactly?

Traditionally, manufacturers receive an order for a product and then either make it to order or ship from stock. There is little information sharing between the manufacturer and its customer other than basic order placement and then shipment data including an invoice. In collaborative manufacturing, the two companies work much more closely together during the production of that product. At the order level, there is information sharing with the customer through all phases of manufacturing. We're still in the early stages. But already, companies are evaluating what they have to do to build out their information infrastructure.

Q: How does it change a manufacturer's approach to information?

To begin, it replaces the conventional internal focus of information about the shop floor and activities there with an external focus. Information about the process, order status, product genealogy, and quality, to name a few key areas, is now made available to the customer as well as the ERP system. In the collaborative manufacturing world, information and the ability to share it is as important as the product itself. The information can actually become a deal maker.

Q: What does this mean to the manufacturer's information system including automatic data capture?

In the past, data from bar codes and other technologies was captured on the shop floor and fed to an ERP system or other information management tool. But with collaborative manufacturing, bar code data is a part of a much broader business process that extends to the customer. In other words, the collected information is not only for internal controls and updating the ERP system, but to keep the customer updated on what is happening and how well it is going.

Q: Does that mean that ADC will be used differently on the shop floor?

Possibly. Managers need to map all of the business process, not just the shop floor, to find out where ADC is needed. For instance, it might be decided that bar codes are needed to track all inventory transactions and make customers aware of their status. That allows the manufacturer to say up front when that order will be filled.

Q: This all sounds like a one-way flow of information to the customer. Is that the case?

No, not at all. The key word here is collaboration. Customers or even suppliers could well feed data to the manufacturer about their processes. It might come in the form of an alert that there is a problem on their end that will impact how and when the manufacturer can or should make and deliver the product. And this isn't just about concepts, not even at this early stage. Companies of all stripes are trying to do it.