While the "e" in e-manufacturing stands for electronic – as in the Internet and the world of data sharing it brings – it could easily stand for evolving or eventually.

While the luster has faded from some aspects of the e-business world, the potential for e-manufacturing is promising, but not likely to gain critical mass until sometime in the future. There are, though, brief glimpses today of what is to come. For instance, visibility into the supply chain is one emerging area that is already helping manufacturers, suppliers and customers better handle their inventories and costs.

The Internet is increasingly being used to monitor processes on the manufacturing floor and the materials handling systems there to assure that all are operating at optimal levels.

Additionally, e-based systems assist in planning and scheduling, design collaboration, procurement of materials, order management, and the testing and validation of finished products.

Growth in these areas has slowed from anticipated levels due to the downturn in the economy, the restructuring of business-to-consumer e-sectors and the slowdown in capital expenditure investment lately. Even so, the future will certainly be quite different from today when the potential benefits of e-manufacturing are realized.

In order for supply chain managers to improve their manufacturing operations, they increasingly have to know more of what is going on as early as possible. This is where visibility software comes in. It allows tracking of assets across the supply chain from raw materials acquisition to the time that finished products reach customers.

"People today need visibility to help them improve their response to change," says Michael Burkett, senior research director at AMR Research (617-542-6600, www.amrresearch.com). "They need to look at both the supplier side and the customer side."

Few companies have excelled at this. Those that have some sort of visibility system typically apply it to only a limited part of their supply chain. It may, for instance, be implemented only to monitor existing inventory or to track parts arriving from overseas.

Some companies also provide visibility software that allows customers to view their orders.

Dell Computer is one company that has established visibility as part of its customer service. A customer can place an order and then track its progress anytime simply by logging into Dell's Web site. The customer is also sent regular e-mails at various steps in the process, such as when the order is received, the unit is built and shipped, and the expected date of delivery.

"Dell couples this with a good physical response. They take your order and then ship it quickly," says Anand Sharma, CEO and founder of TBM Consulting Group (800-438-5535, www.tbmcg.com).

Sharma says that many talk about visibility, but few are doing it (see side bar below about a third-party logistics success story - Visibility is key to 3PL's success ). He says companies that have a quick response actually make visibility easier because they then have fewer points that need to be viewed.

Two years ago at this time there were literally thousands of public trading exchanges. They were created to allow manufacturers to use the Internet for finding new suppliers who could then bid to supply services or products. The goal was to cut the cost of materials and commonly used parts dramatically. However, they didn't all work as planned. Only a handful of meaningful exchanges remain serving select industries, such as automotive and aerospace.

"A lot of trading exchanges were more hype than reality," says Sharma, "but there were others that gave real value to their customers."

"Successful trading exchanges are those that have focused on commodities and indirect materials not used in production of the product, such as office supplies," notes AMR's Burkett.

He adds that some other exchanges, such as Freemarkets.com, have survived because they are niche-minded.

"They succeed based on strategic sourcing and have developed additional services that help client companies control their spending," Burkett says.

Some private exchanges are designed not to find new suppliers, but to connect individual companies to their existing suppliers – exchanging information about current inventories and needs. For instance, a major aerospace designer is linking with its suppliers to build a new breed of fighter jet.

Richard Schonberger of Schon-berger and Associates (425-467-1143, www.wcm-wcp.com) agrees with this approach to manufacturing. He says e-technology that exchanges information should ideally be used to develop better relationships with suppliers, not to look for new ones.

"Many are searching the planet for low-cost suppliers, which can cause some destabilizing of the supply chain," he says. "Purchasers typically look for price, quality and delivery. It is easy for someone to pretend they can meet all three. But, stability is necessary if you want effective suppliers."

The Internet is also being used for remote monitoring of operations on the factory floor. An engineer or supply chain manager can look at inventories, work-in-process and access data from anywhere that there is an Internet connection. Remote monitoring can increase a facility's speed, correct deficiencies, provide information to those who need to know and aid in troubleshooting problems (see sidebar below about Kodak - Kodak monitors AS/RS from afar ). The software for these functions is improving as the marketplace matures.

"A year ago we had MES (manufacturing execution systems) on the shop floor and then some supply chain simulation programs," explains Burkett. "The disconnect was between planning and execution. Supply chain event management systems are helping to fill the gap."

While connecting to the shop floor can be an important function, it cannot help a company that has poor production design or the inability to respond quickly to changes. "That is just automating waste," says Sharma of TBM.

Schonberger agrees that wiring the factory provides only a portal into seeing what is there and is not an answer in itself.

"There is lots of software that looks at the factory floor, but not much really happening," he says. "Some companies might be better off spending their money on creating flexibility, improving the visual management on the floor, and cross training their workers."

So, what is the future for e-manufacturing? Many companies in the age of terrorism are beefing up their inventories, especially the foreign parts and commodities that could be delayed through customs if another major attack were to occur. This is particularly true for specialized parts that may not be readily available from domestic suppliers. Using the Internet to better track inventories can be crucial for companies that aim to control these inventories while remaining lean in other areas.

"Know your suppliers better," suggests Schonberger. "This can help overcome disruptions that occur, like 9-11."

Increasingly, the Internet will be used for collaboration between designers and suppliers as well as for internal communications within a company. But it cannot be an end in itself and can only complement what is already there.

"Software does not replace organizational dysfunction," warns Burkett.

"It takes design, sales, marketing and distribution working together. Simply putting the software on-line will not help until you first look at how you do business and the kind of information you need to share."

One legacy that has been left from the dot-com era is the expectations of customers for quick response. The same demand pressures that require retail distributors to now process and ship products quickly will also be pushed along the supply chain to manufacturers.

"What I see in the future is the need for the Internet to help create very lean and responsive manufacturing systems," says Sharma. "It is not enough to ship something in three or four days. It needs to already be in the customer's hands by that time. It will take smaller, more agile plants able to do mass customization. The Internet will be used in these flexible factories to download design, manage orders and provide visibility."