Jun 13 2013

Manufacturing-as-a-Service: Are We There Yet? Almost.

Categories:

Agile, Cloud, Manufacturing Intelligence, Technology

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June 13, 2013

Translation

manufacturing_in_the_cloudWhen it comes to the cloud, companies are porting just about everything they can into this pay-to-play architecture that enables IT departments to offload applications and even infrastructure while gaining seamless scalability and anytime, anywhere delivery of services without the maintenance headache.

The cloud, in fact, is a critical aspect of the modern data center—which also now encompasses virtualization (where several virtual servers run on a single physical platform), converged fabrics (a consolidation of all of the communication between the local area network, the storage network, and the processing clusters), and data center infrastructure management (DCIM) tools (which provide a way to manage all of the organization’s physical assets in one dashboard).

With this new IT environment, many manufacturers are questioning how they could possibly incorporate product design, engineering, production processes, and quality control as part of the solutions that are popping up in IT. For the past several years, industry experts have dismissed the notion that anything to do with manufacturing operations management could possibly be moved into the questionable cloud. There are security and intellectual property risks, the argument has been. And that mindset has kept the factory floor locked safely behind the firewall, and even isolated from the enterprise by a demilitarized zone (DMZ), offering an extra layer of protection against incoming malware.

But the future of manufacturing just might depend on a company’s ability to change with the times and the technology. The news of Dassault Systèmes’ bid for Apriso really got me thinking. These are two leaders in 3D simulation/PLM, agile manufacturing operations management and manufacturing intelligence. Together, they could change the business of manufacturing as global operations require visibility, agility and analytics – something this duo could easily deliver.

In addition, the service age is upon us. As an industry we’ve embraced Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), even IT-as-a-Service (ITaaS). Don’t you think it’s time manufactures start to think of Manufacturing-as-a-Service (MaaS) as well?

The idea of MaaS does not equate to outsourcing, rather, as a way to deliver customizable, on-demand manufacturing scenarios. Imagine having the ability to add new functionalities to plant floor software systems and quickly adjust production systems to new requirements? This concept hinges on an inter-factory model that serves as a marketplace for virtualized manufacturing services. And, it is already being tested.

Behold “The ManuCloud” project, a consortium of European companies, universities, and industry organizations, which have been testing the concept of a service-oriented IT environment as the basis for the next level of manufacturing networks.  ManuCloud seeks to implement the vision of a cloud-like architecture concept. It will provide users with the ability to utilize the manufacturing capabilities of configurable, virtualized production networks, based on cloud-enabled, federated factories, supported by a set of software-as-a-service applications. The concept is currently being tested on the photovoltaic, organic lighting, and automotive supply industries.

Meanwhile, other seeds of a similar sort are now being planted as a result of The Mozilla Ignite Challenge, an open innovation challenge from Mozilla and the National Science Foundation, to show how next-generation networks can revolutionize healthcare, public safety, manufacturing, energy, and more.

The teams are designing applications for the future in hopes of getting funding. One such app is the Manufacturing and Simulation for Virtual Enterprises solution.  The goal is to use an ultra-fast gigabit network which supports collaboration among distributed tools and resources for design analysis, assembly planning, simulation and final assembly in a physical micro factory. In a nutshell, it creates a directory of manufacturing services that can be accessed and executed remotely.

While the ideas are currently being proven, the adoption of such set ups as part of mainstream manufacturing could take some time. Certainly many questions remain, including the concept of how strategic your ability to uniquely execute a manufacturing process. But, the recent news of Dassault Systèmes’ intended acquisition of Apriso could mark an important turning point in the adoption of these future applications. By integrating digital manufacturing technology with highly flexible operations management, companies could gain real-time control over design, production and quality across their global manufacturing networks. Together, these companies could change the whole manufacturing dynamic, opening new doors to innovation.

Yes, it is just the beginning. But, based on what’s happening in the industry right now, the future of manufacturing is bright. Very bright.

 

Stephanie can be found on Google+.

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Jun 10 2013

10 Tips to Motivate Excellence in Teams

Categories:

Best Practices, Collaboration/Social, Continuous Improvement, Innovation, Maintenance Management, Quality Improvement

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June 10, 2013

Translation

In today’s competitive economy, efficient productivity is everything. This blog has presented numerous examples of systems and methodologies that can lead to exceptional performance to best weather today’s manufacturing transformation. But operational excellence requires more than better equipment and IT systems – your human capital must be carefully selected, groomed and maintained. Whip-cracking and obsessive time-and-motion studies are not likely to produce the results you want. In fact, the return on investment of implementing new machinery and systems can all be lost if your employees don’t feel like they are an important component to your company’s success.

The following 10 guidelines consider factors of psychology and communication that I believe are essential to managers to embrace if they are ready to transform a room of hires into a dynamic dream team capable of delivering the levels of manufacturing operational excellence that is needed to remain viable in today’s fiercely competitive global economy.

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Image Courtesy of Wikimedia Commons

1. Set a clear protocol for goals and expectations

Even the most efficient team in the world will have difficulty in reaching goals that are unclear to them. By the same token, you should outline the parameters of your own role in a relation to the team in an unambiguous way.

Whenever and wherever possible, quantify the goals and roles that you set for your team. For example, if your company needs to fulfill a production quota within a certain amount of time, it is crucial to let your team know of what is expected. This not only prevents unnecessary friction when a quota is not met, it’s an automatic morale-booster when the team has exceeded in meeting the quota.

2. Avoid sending mixed messages

An effective manager should be a bit of a psychologist, in the sense that he or she needs to understand how to best reinforce positive behavior and discourage unwanted behavior. While your team members are more complicated than Pavlov’s dogs, requesting one thing one day and providing inconsistent feedback when they produce the results you specified on the next is not going to produce the behavior you desire.

3. Offer solid incentives

Just as goals should be translated into numbers, so should rewards systems. In manufacturing, this is a straightforward task: simply set up a bonus system that rewards team members’ production of units. When your entire team exceeds expectations, provide gainsharing. Because gainsharing incentives have been shown to raise productivity by an astounding 1,000%, such a strategy will be a bottom-line boon even with generous compensations.

4. Criticize in private; applaud in public

When giving feedback to your team, the context of your message can be as important as the content. On the one hand, make sure that you deal with individual, personal problems are harming efficiency, embarrassing  that worker in front of peers is likely to make the problem worse. For similar reasons, you should vocalize approval for a job well-done in front of the crew.

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5. Facilitate interaction among workers

Study after study has shown that when a set of individuals identifies as a group, productivity rises. Therefore, encourage your crew members to interact as much as possible. This might mean designing the work area to allow for banter among team members, or even sowing the seeds for more extracurricular bonding (such as group lunches or after work socializing).

6. Don’t ignore employees needs

A team’s sense of well-being is crucial to maximizing performance, so make sure you meet this on every level. From creating a safe, efficient and even aesthetically pleasing workspace to giving promotions when warranted, addressing the very human desires to feel secure, appreciated and meaningful to others will help them—and you.

7. Lead by example

While this is not literally feasible when there is a qualitative gap between the duties of workers and management, you should demonstrate precisely the ideals you would like your team to embrace. For example, giving speeches about making sacrifices and working overtime when you regularly take executive lunches is not likely to boost morale.

8. When possible, encourage variety

Employees who are appointed to different roles tend to be more productive. Of course, this is a trick on floors that rely on an acute specialization of labor, but to the extent that you can, switch up job assignments from time to time. When workers see their vocation as an endless treadmill, their efficiency suffers.

9.  Seek out feedback

Many of the steps above are worthless without a clear and honest feedback loop between team members and management. In every way possible, create conditions in which every member of the crew feels that their voice is appreciated.

10. Be aware of your emotions

Workers rarely respond well to irritable, negative or manic bosses. Without being overly stoic, try to keep business all business and never personal. Showing that you can be calm in challenging situations will bolster group confidence in your leadership skills—and help productivity.

Communicating with your team effectively is key to maintaining overall efficiency. If you find that your team is running behind and lacks motivation, consider these tips to boosting their morale. A company that has invested in world class systems processes and equipment won’t be able to function competitively if their staff are disgruntled or are not operating cohesively as a well-integrated team.

Marcela De Vivo can be found on Google+.

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Jun 04 2013

Bombs, Earthquakes and Cost of Quality

Categories:

Manufacturing Intelligence, Product Traceability & Genealogy, Traceability

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June 4, 2013

Translation

The Power Law

What do the recent tragic events in Boston and Sichuan in China have in common with the Cost of Quality (CoQ) at a manufacturing company? They all follow a statistical rule called the Power Law. Simply put, plotting the logarithm of the magnitude of an event against the logarithm of the probability that event will occur results in a straight line with a negative slope relationship. In the case of a terrorist event, the magnitude is often sadly measured by the number of casualties. Considerable research has shown that historical attacks have obeyed this law. In case of an earthquake, the relationship between magnitude and the probability of occurrence at a given time and region is described by the Gutenberg-Richter law, as the same type of Power Law distribution.

How are these related to CoQ? Figure 1 is an analysis of the warranty claim data of an Automotive Tier 1 supplier within the period of one year.

power_law_warranty_cost_graph

 

This data set indicates that larger claims (above $10,000) follow the Power Law very well. The circled area shows smaller claims, likely indicating smaller sized defects that skipped the system, have a lower occurrence. Assuming these data are representative patterns, they are showing that the power constant is approximately equal to -1. This means that the occurrence of above $100K claim is about 100 cases in a year, and those above $1M claim are about 10 cases a year, those above $10M claim are about once a year.

Studies on terror events all over the world have found that very similar relationships exist between casualty and the probability of occurrence. In fact, the power constant for terrorism is found to be about -2.5. In other words, the occurrence of a 200 casualty event such as the Boston bombing is approximately 10^2.5 = 316 times more likely than a casualty 2,000 and above event, such as the Sept 11 attack on the World Trade Center in New York.

Why Do Quality Events Exhibit Power Law Behavior?

There are two major reasons why quality events follow the behavior suggested by the Power Law, both are tied to the networked nature of the supply chain.

  1. Interdependency – Supply chain elements are highly interdependent. For example, I have experienced an instance where a small crack was discovered in a critical glass furnace at a remote factory in Japan. This turned out to be a devastating event. As a sole producer of glass substrate for storage media in magnetic drives, the crack disrupted the entire server and PC supply chain for days, costing manufacturers millions of dollars.
  2. Positive feedback – Public awareness can distort the actual cost or danger of a defect. A now “famous” example is Toyota‘s “unintended acceleration” case, which ended up being settled by Toyota for $1.1 billion dollars (story here). When Toyota identified a potential root cause to be floor mats made by certain suppliers, the number of reports increased exponentially and the publicity of the case became a media frenzy.

Six Sigma and the Power Law

The Power Law behavior of CoQ offers important insights into how quality executives should deal with important quality events. This concept, however, might be counter-intuitive to those practicing Six Sigma, which has a foundation based on a normal distribution or the Bell curve. CoQ, however, observes the Power Law distribution, not the normal distribution. Here are some of the major differences:

  • It is meaningless to talk about the average size of a warranty claim – the shape of the Power distribution has no mean or standard deviation (sigma)
  • The most important data points are outliers – in our data set, the top 10 claims among all 412 contributed to over 50% of total warranty cost, but these large claims were outliners typically ignored by Six Sigma methodology
  • Black Swan events occur – The theory was developed by Nassim Nicholas Taleb to describe highly unlikely events that determine the course of human history. According to extrapolation of the above data set, warranty claims that cost more than a billion dollars could occur about every century. Such an event, though rare, could easily lead a company to bankruptcy.

 

The Power Law Strategy

Just like security gates alone cannot eliminate a terrorist event, implementing a traditional quality management system might not be enough to prevent quality defects when the Power Law is in effect.  A different strategy is needed that involves three major steps. The first is to enable detailed product traceability across the interdependency of the supply chain. Once this has been established, the second step would be to build an early warning system, perhaps based on “big data” enterprise manufacturing intelligence, which establishes granular traceability across the value chain. The third step is to tie such warning signals to a series of actions that involves the PDCA (Plan Do Check Act) cycle as well as a containment strategy.

These preventative measures could significantly lower the probability of an isolated event escalating into becoming catastrophic by self-reinforcing cycles of positive feedback. It is worth noting that traditional ROI analysis on annual return can rarely be used to justify investment to implement such strategies and solutions. When dealing with the potential catastrophic effect of the Power Law, executive leadership is required to set organizational direction. Seeking average annual return of such investment just does not make sense in a world with Black Swan events.

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May 29 2013

The Next Step for Global Manufacturing Operations Management

Categories:

Collaboration/Social, Enterprise Software, Manufacturing Operations Management, New Product Introduction, Product Lifecycle Management

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May 29, 2013

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next_steps_gobal_manufacturingToday is an important day in the history of the Apriso – Apriso has agreed to be acquired by Dassault Systèmes. FlexNet will become an integral part of the DELMIA suite of products.

For the past couple of years, we have been writing about the importance and value of embracing a three platform strategy, consisting of Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM) and Manufacturing Operations Management (MOM). In Digital Manufacturing, collaboration is key. The more readily information from product design is made available to production and planning, the greater value that is created across the enterprise.

In following that theme, today’s announcement is validation that this direction is one worthy of pursuit. By combining Apriso’s manufacturing solutions with Dassault Systèmes’ engineering and design solutions, significant value is possible by those manufacturers that embrace a combined solution which supports better collaboration and access across platforms. This merging of product suites creates enormous potential value by ensuring the integration between planning and execution is secure, current and possible, in real time. Manufacturing and design intelligence can now be shared in real-time, with the potential to significantly improve efficiency, reduce waste and accelerate the time to market for new product launches.

When I started at Apriso about eight years ago, the concept of globally deploying a manufacturing operations management solution was virtually unheard of. Plant-by-plant implementations of manufacturing execution systems were the norm.

An incredible transformation has since occurred over the past decade whereby the possibility of managing manufacturing operations as an enterprise solution is now definitely possible. In fact, it is rapidly becoming the norm. With this evolution has come a reality of truly synchronizing design with execution, regardless of how many plants a manufacturer has, or where they are located. This joining of forces between Apriso and Dassault Systèmes marks an important transition point to further validate the need to manage manufacturing operations on a global, enterprise scale.

Thank you to all who have helped to be part of the manufacturing transformation we have already experienced. Now comes the hard part – doing what we said we’ll do! Stay tuned to see how this venture delivers upon its promises.

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May 21 2013

It Pays to Collaborate In Manufacturing

Categories:

Agility, Collaboration/Social, Mobility

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May 21, 2013

Translation

In today’s highly global supply chain and manufacturing economy, it is no revelation that better communications are needed to cross the geographic, cultural and language distances that must now be covered as part of running nearly any sized company. Better communications means improved efficiency, less waste and higher customer satisfaction. The challenge with these types of concepts, however, is how do you measure and justify future investments to take advantage of the perceived benefits? What are reasonable assumptions when evaluating this type of investment decision?

Fortunately, Aberdeen Group just published the following “Sector Insight” research report: A New Age of Collaboration and Communication in Manufacturing. This report did a great job in trying to better explain and quantify some of the benefits of improving collaboration, which I thought might be interesting enough to share with our readers.

The first concept worthy of mention is the fact that collaboration today is much more “unstructured” that it has ever been in the past. Rigid IT infrastructures that might have worked well in the past from a support, security and management perspective, don’t work as well today. Today there are so many options on how to reach out and speak with a colleague today, it can be a bit overwhelming to decide if you should telephone, email, Instant Message (IM), texting, or even trying to use another company communications platform, such as SharePoint, Lync or wiki sites. The key is flexibility, and ensuring your IT platform can adapt as quickly as you need it in order to take advantage of the latest communications options.

Those willing to embrace new communications mediums will be rewarded. According to the Aberdeen Group report, benefits that separated the “Leaders” from the rest include:

  • +11% Overall Equipment Efficiency (OEE)
  • +8% Operating margin vs. corporate plan
  • +18% Successful new product introductions

Taking a deeper look into the findings, it turns out that Communications and Collaboration (C&C) Leaders were about 33% more effective in streamlining and accelerating processes to improve efficiency and productivity. Of course, other factors likely contributed to the Leaders improving their performance, but, this is a significant figure that certainly justifies spending attention on improving communications.

The research continues to point out the specific benefits that were achieved after implementing new C&C initiatives, providing a more cause and effect benefit comparison. Performance improvement was across the board and significant, as shown in Chart 1.

chart-1_collaboration_communication_benefits_manufacturing

With regards to the communication venue of choice across manufacturing employees, email came in as the top medium, with 85% of the Leaders accessing it from their desktop computers (vs. 71% of the Followers). This isn’t surprising given its ubiquity and age. What is interesting is the speed with which new mobile platforms are gaining traction. Smart phones are now the third most popular collaboration tool, now used by half of the Leaders and around a quarter of the followers. I don’t see this trend slowing down anytime soon. To read more about the mobility in manufacturing transformation, be sure to read this post.

In closing, the need to improve collaboration and communication across manufacturing is a worthy goal to pursue – the benefits are legitimate and significant. The more you invest to increase the flexibility of your operations IT infrastructure, the greater the opportunity you have to collaborate, and the greater upside you unlock to improve your own operational excellence.  And, if you can extend your ability to collaborate across mobile platforms, then the upside will be even greater!

Gordon can be found on Google+.

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May 14 2013

Navigating the Operational Intelligence Selection Process

Categories:

Enterprise Software, Manufacturing Intelligence, Technology

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May 14, 2013

Translation

operational_intelligence_selection_processOperational and business intelligence are very broad and open terms used in day-to-day conversation by not only manufacturers, but by many businesses. Because of this, the market is now quite saturated. Vendor messaging can be 75-90% the same or very similar, which makes the selection process for a solution a difficult one. “Capturing data in near real time from multiple data sources and turning it into valuable information” is heard time and time again, using roughly the same terms. This messaging confusion made me wonder about what really matters. What would be most important to me, if I were responsible for selecting a new enterprise manufacturing intelligence solution for my employer?

In response to this query, I have identified five key capabilities that you should seriously evaluate when selecting your next Operational or Business Intelligence (BI) solution.

 

  1. Ease of development and maintenance.  What is the point of a solution if you can’t get it implemented or keep it up and running in a reasonable time frame without spending a lot of resources to deploy? Understand what is “under the hood” and see how well it can support your IT staff. Even more importantly, ensure that visualization, validation, integration and collaboration of the product can be done quickly and efficiently with your existing IT landscape. Make sure you also take into consideration after the first go-live and understand how hard it is to roll out fixes, dashboards, KPIs, measures and even rolling the entire solution to different plants. Deployment and maintenance occur at many levels. Just like getting a puppy, you will have to take care of it for its entire lifetime.
  2. Empowering the end user.  There is inevitably going to be conflict between business users pressured to sell more product at better margins, the operations / engineering team to “make it happen” and those in IT tasked to give them both the data they need to make the right decision. The end result is an IT department that is flooded with multiple report, screen and execution changes from across many of their complex systems. Due to this scenario, most changes take between three to six months to complete and roll out to the users. Operational Intelligence tools that empower business and operations people to get their data, perform all sorts of analysis, collaborate and then publish – all without IT intervention – are winning the war. Requests like “For product ABC, what is the most common reasons for failure between stations three and nine during the night shift?” should be easily answered without a new report. An operational intelligence solution that empowers end users to use tools they already know (ex: Microsoft Excel) is ideal, so that no training is required.
  3. Pre-packaged solution, not just a tool.  Most BI solutions are massive and very powerful in their features and functions. Yet, despite their size (and cost), in the end they are typically very “tool-like.” What I mean is that you still have to understand and validate your business requirements. Then you must define the process, understand the source system, implement, test and complete deployment. This is often the hardest part, and can often require many iterations to get it right. World class operational intelligence systems instead offer more of a pre-configured, out-of-the-box solution that is based on not only international standards but also real world experience within their verticals. Providing existing integration, Key Performance Indicators (KPIs) and measures, reports, dashboards and screens significantly reduces the risk and time required for new implementations, helping to accelerate time-to-value.
  4. Complex analytics.  The world is getting smaller, faster and more technologically powerful. What was not even possible three years ago is now the norm. It seems like sometimes the only constant is change. As such, when you are evaluating new operational intelligence solutions, look for those in the marketplace that can support predictive, multi-variant Statistical Process Control (SPC) and other complex statistical modelling capabilities. Further, understand which vendors are continuing to invest in their product and whose product enables frequent changes and updates. The manufacturing world continues to grow more complex. End users naturally expect more, given the pressure to increase margins while competing against greater global competition. Any advantage that can let end users make decisions “beyond the horizon” before they are visible to others – such as by leveraging more advanced, complex analytics – will surely provide significant return on investment in the form of profits, customer satisfaction and competitive advantage.
  5. Aimed at operations.  It sounds simple, but this concept is often missed. Operations people need many different tools that allow them to perform their jobs better. These tools must be tailored specifically for their role and day to actions including metrics, alerts, cockpits, reports, screens, widgets and scorecards.  Basically, any solution which offers the capability to enable decisions to be made faster, easier, to the point and more accurately is a valuable asset in today’s market.

 

That sums it up. I hope you find this list of five capabilities helpful as part of your operations intelligence evaluation process. Obviously there are other factors, so please take the time to understand and evaluate what’s important to your selection process with the appropriate weighting. Just remember to consider this decision is for the product’s entire lifecycle and rollout plan, and not just a decision of cost. You can always negotiate price, but you can’t simply do so with regards to product capabilities. Anyhow, good luck, happy hunting, and may your decision be the right one!

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May 09 2013

Vertical Launch: Urban Legend or Manufacturing Revolution?

Categories:

Enterprise Software, Innovation, Manufacturing Execution System, Technology

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May 9, 2013

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vertical_launchIs a “Vertical” product launch just an urban legend, or is it really possible?

No, I’m not talking about a rocket launch. I’m talking about a well-oiled perfect product launch that is on-time and achieves full ramp-up on Day One. This type of new product introduction would appear as a vertical line on a time / volume graph, and would notably win a marketplace for an enterprise, and at the very least, make a career for the product manager. This kind of innovation could revolutionize manufacturing.

Is such a thing possible? Let’s consider exactly what challenges would need to be overcome in order to achieve a vertical launch. Then we’ll have a better idea if it’s possible or not.

 

Challenge 1: Engineering Change Order fluidity

Engineering Change Orders (ECOs) are the enemy of a smooth product launch, and it is unlikely they are going to disappear. S%#t happens. In the real world, new products undergo significant engineering and design changes, often all the way up to launch. I know of one Consumer Products Company that was experiencing 10 to 20 ECO’s per week for new products. With dozens of manufacturing facilities, keeping up with that level of ECOs is downright brutal!

If you hope to launch a product smoothly across multiple manufacturing facilities, change orders have to run like clockwork. How can this be done? The only answer is really tight integration with PLM on the one hand, and all the production floors on the other. So, if a change order comes through for any reason, all members of the team and all facilities must know about it and be completely aligned. That goes for ECOs generated downstream, such as when the factories discover they can’t produce the parts with sufficient quality or for a low enough cost. And it goes for ECOs generated upstream, such as when market research discovers halfway through the project that consumers want a different set of features.

 

Challenge 2: Instantly programming changes to shop floor equipment

It’s not enough for the plants to know about the ECOs. The various plants have to be able to act on them quickly and efficiently in order to minimize delay. And there’s the rub.

Manufacturing actions typically are performed at the machine layer by Programmable Logic Controllers (PLCs) that execute instructions according to a process plan. For many manufacturers, when adjustments to the process are required at this level, production must stop until the changes have been programmed directly into the machines. The more plants and equipment in the manufacturing landscape, the harder it becomes to coordinate and keep up with product launches as the final design is completed.

This challenge can be overcome by implementing adjustments at a higher level – at the Manufacturing Execution System (MES) layer, instead of the machine layer. Changes can then be made automatically to multiple plants, by distributing new processes to the MES systems (ideally from a Center of Excellence).

This will be harder to do for manufacturers who have a lot of legacy equipment on their plant floors. Nevertheless, a growing number of manufacturers have solved this problem by implementing a standardized MES as a platform-based solution. Under this scenario, it is possible to use machine interfaces that allow virtually instant and simultaneous process updates across an entire manufacturing enterprise – cutting weeks and months off of product launches.

If you can effectively address these two challenges, then the potential to achieve a vertical launch is now on the horizon. But, we’re far from reaching it. In my next post, I’ll take a look at two more major hurdles that must also be overcome before we can even begin to talk about achieving a perfect, vertical product launch.

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May 07 2013

How BPM-based Traceability can go Beyond Regulatory Compliance

Categories:

Business Process Governance, Business Process Management, Manufacturing Software, Product Traceability & Genealogy, Traceability

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May 7, 2013

Translation

BPM-based_traceability_takes_you_beyond_regulatory_compliance

Yesterday, I had an interesting phone call with some very smart people from ChainLink research (www.chainlinkresearch.com/).  We were discussing business drivers for global traceability initiatives when Bill McBeath, their Chief Research Officer, used the term “incident driven” initiatives. Basically, the point being that manufacturers don’t look to improve their traceability processes and supporting manufacturing systems until they’ve had a quality or compliance failure that impacted a customer or resulted in regulatory attention.

My experience certainly supports Bill’s observation. Some of the manufacturers that I have spoken with have come to the table because a quality escape or noncompliance event that created a business risk or pain.

At the same time, there is an emerging cadre of proactive, visionary business leaders who recognize the strategic value of building traceability and compliance into their business and manufacturing processes. A recent Analyst Insight by Mariela Koening from Aberdeen seems to support this finding (see the report here: The Practical and Strategic Side of BPM).

Mariela’s findings show that manufacturers using Business Process Management solutions (BPM) to standardize quality, compliance and traceability processes, which can then be reported across the enterprise, are reaping substantial operational benefits, beyond simply compliance. Examples include:

  1. Better customer complaint handling
  2. More successful new product introductions, and
  3. Substantially more effective recall processes (you’ll have to read the report if you want the numbers!)

One thing that is hard to quantify, but I would argue is equally as important as these findings, is the inherent flexibility that a global BPM platform affords your organization. As the regulatory environment continues to evolve regionally, domestically and internationally, a global traceability solution built on a BPM platform can seriously reduce your business and operational risk. This type of an architecture gives you a cost effective way to rapidly evolve your traceability systems and processes in order to keep you in compliance – regardless of what market you sell your goods and services.

I recommend you read the above Aberdeen Group report thoroughly. Mariela also discusses how linking operational and enterprise performance to your traceability processes can lead to improved performance and managerial effectiveness. And, she illuminates the value of incorporating collaborative capabilities into your quality and traceability processes to accelerate your response to a quality event. After you’ve read it, consider the different ways that a BPM-based, global traceability solution that incorporates collaborative technologies, such as Microsoft Lync or SharePoint, could provide you with a competitive advantage for your business. Here is another thought … what if your competitors were to embrace such a solution first?

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May 02 2013

Leveraging the Industrial Internet for Operational Excellence

Categories:

Aerospace & Defense, Maintenance, Maintenance Management, Manufacturing Intelligence

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May 2, 2013

Translation

industrial_internetOver the last few months, the manufacturing technology industry has seen the popularization of a new term: the Industrial Internet. The term describes the network that connects sophisticated machines embedded with sensors and computer software so manufacturers can gain real-time insights into everything from materials planning to pending maintenance issues. Some estimate this technology could potentially add $15 trillion to the global GDP through gains in manufacturing productivity by 2030.

Whether the Industrial Internet can deliver these gains is up for debate. However, manufacturers can certainly stand to benefit from connecting their increasingly automated shop floors to intelligent software systems that can boost productivity, reduce waste and enable preventative maintenance.

In this article, we’ll look at five specific ways that manufacturers can take advantage of data analytics and related technologies.

1.  Improve efficiency

One of the first ways that the Industrial Internet can help manufacturers is by enabling more accurate and detailed monitoring of machine efficiency levels. Manufacturers can equip their machines with sensors and then connect these sensors to internal Ethernet networks to relay information relevant to productivity such as energy consumption, average plant temperature ranges and machine output levels.

For example, a large industrial machinery firm recently equipped machines in one of their advanced battery manufacturing facilities with 10,000 sensors and began relaying production information to their internal network. To give workers insight into the production process, employees are now able to access real-time data over the network via a tablet computer, which allows them to push their machines to their technical limits.

2. Reduce waste

These software systems can also help build an energy monitoring system to optimize power consumption within a manufacturing facility. These systems can track energy usage in real-time, and then create alerts for production workers to tell them when to reduce machine production levels to prevent overuse. Of course, this type of monitoring can be used in other aspects of production to do things like predict the most efficient inventory levels to keep on hand in order to meet current (and near-term) demand.

3. Improve machine productivity

Machine output can be carefully tracked and measured by data analytics technologies to prevent machine downtime and increase productivity. German auto manufacturer Audi recently installed a system to track the production levels of all of their machines. The system can immediately flag machine downtime and alert workers of the issue as soon as it happens to prevent losses in productivity. Since implementing the system, Audi claims that the productivity of their machines has increased by 20 percent.

4. Identify and predict maintenance issues before they happen

In addition to getting the most out of their machines, manufacturers can also use the Industrial Internet to predict when their machines will need preventive maintenance, allowing them to get more usage out of their equipment. By tracking and modeling a machine’s usage patterns, software can alert workers when a particular part (e.g. a belt) is about to give out.

This can be a big boon to manufacturers. As Jim Pinto, author of “How to Win in the Automation Business” points out, Maintenance up until now has been after-the-fact. However, Industrial Internet maintenance is really about predictive maintenance so that the Internet automatically tells you when a machine is about to fail.” By some projections, reducing unscheduled maintenance by one percent could result in savings of $30 billion to the aviation industry over the next 15 years.

5. Cut production costs

All this information in aggregate can help cut downtime (and lost productivity) to ensure manufacturers spend their time producing rather than tending to low-value tasks. Whether it is identifying a machine that is about to fail, or reducing wasted inventory levels these systems can help cut unnecessary production costs.

The Internet is obviously not going away. As new ways to harness the value of seamless connectivity to plant, processes and equipment are identified, the “early adopter” manufacturers that embrace this technology first will reap the biggest advantages. As these integration strategies continue to evolve and become increasingly common, this strategy will likely continue to grow in importance and become a “must have” for manufacturers.

For a more in-depth discussion of this topic, please see this post.

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Apr 30 2013

A New Model for Manufacturing Innovation

Categories:

Agile, Agility, Continuous Improvement, Innovation, Manufacturing Intelligence, Technology

by

April 30, 2013

Translation

The Austrian Economist Joseph Schumpeter argued that industries must incessantly revolutionize their economic structure from within. I interpret this statement to mean that manufacturers must continually strive to innovate with better or more effective processes in order to build new products. Many examples exist. Innovation in the Telecommunications and Information Technology (IT) industries have really changed the way we communicate and share information. Manufacturing innovations includes various automation, Lean and other cost reduction strategies. And, an ease of use to replicate operations processes across sites has helped to ensure higher global quality standards and greater control, visibility and synchronization across operations.

What is Innovation?

Innovation means to develop new solutions or apply new processes that meet new customer needs or add value to the existing products and services to optimize their value or productivity. As a result, innovation can be an excellent catalyst for growth. As products and services are manufactured with improved quality, durability and safety, which are typically enabled by advancing technology and organizational strategies, overall market demand will often expand as a result.

Innovation impacts economics, business profitability, product design, technology or engineering best-practices. Further impact occurs when innovation creates improved efficiency and effectiveness in the business, comfort and convenience of consumer goods, often driven by enhanced technology (Go Green) and safety (Aerospace & Defense).

Innovation Constraints

When shop floor operations at global manufacturers consist of integrating heterogeneous processes and production methodologies, it can be difficult to manage innovation – effectively blocking all of the potential benefits.  It is in these situations where manufacturing leaders have emerged with effective strategies to simplify their process frameworks such that process improvement can be accommodated faster and more easily. One approach is to unify shop floor operations with a Center of Excellence team and an IT framework, which can then ensure comparable and measurable manufacturing standards on a global scale. As they say, you can’t improve what you can’t measure.

Sources of Innovation

Peter F. Drucker noticed that the general source of innovation is tied to changes in industry or market structure, which can result from changes in local or global demographics, changing tastes, new technology, etc. Innovation can often appear random, coming when you least expect it. Figure 1 depicts a more traditional model that illustrates how an invention could trigger innovation, which must then be transitioned into the marketplace. Today, I would argue that this model is too simple. It really misses the upside of process innovation. A new process that cuts 10 percent of your operating costs could be quite significant in the consumer goods industry where margins are thin.

Figure 1: Traditional linear model of the processes of technological change

 

Regardless the source of your innovation, traditional theory suggests that if you are to achieve successful innovation, the following factors must exist:

  1. Clear goal definition with excellent alignment of actions to goal
  2. Mutual participation across stakeholders
  3. Accurate monitoring of results
  4. Open, trustworthy communication
  5. Access to current, accurate information.

I would argue another factor must also exist: your organization’s ability to change, starting at the process level. If you identify an opportunity for innovation but can’t get the new process in place, then no benefits can be achieved and all your work was for nothing. Once your innovation has been implemented, the entire process should be re-evaluated for further continuous process improvement. Figure 2 illustrates a more modern perspective on the process of innovation, demonstrating the fluid and dynamic need for change as part of your quest to achieve manufacturing innovation.

Figure 2: New manufacturing innovation model, a continuous loop of technological change

 

Measuring Innovation

Innovation can (and should) be measured on an organizational level, in form of balanced scorecards. The implementation of manufacturing intelligence solutions is often justified by this single function, as part of a manufacturer’s quest to achieve better visibility across operations. This approach can cover several aspects of innovation, such as business measures related to profitability, innovation process efficiency, employees’ contribution and motivation, as well other stakeholder benefits. Measured values depend on the specific industry and business, and might include new product revenue, spending in R&D, accelerated time to market and greater access to fuel strategic growth in emerging markets.

What is pivotal is that innovation aligns with corporate strategy and global manufacturing performance in order to ensure continuous growth and return on investment. A well-defined innovation program with an IT infrastructure that not only supports frequent process changes and other innovations but encourages it will lead to an aggressive growth strategy and sustained competitive advantage for many years to come.

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