Sep 01 2015

Kenzo Takai

Global Traceability Part 2: Harnessing the Power of Big Data

39816158_sIn my last blog post, “What does Global Traceability Give you that a MOM Doesn’t?,” I discussed why companies with an enterprise solution for manufacturing operations management should also invest in an enterprise solution for global traceability. The rationale revolved around the typical issues: contain quality “spills,” protect the brand, comply with regulatory compliance, and appease to consumer pressure and expectations. Those are good reasons, and they are the historical drivers for implementing a global traceability solution. Enterprises need traceability to survive and stay in the game these days.

But now that the early adopters of global traceability have conquered their trace and containment issues, they are beginning to realize they are sitting on a gold mine of process and operational data that can be leveraged for much more than crisis-resolution. Global traceability involves gathering, storing, and reporting detailed information about every important event throughout supply and production. That information can then be used in many different ways to improve operations or resolve seemingly unrelated challenges.

The following examples of business improvement were all based on what happens when a global traceability solution is put in place. The references are all from real companies. The names, however, were withheld for confidentiality and competitive reasons. We are still in the early days of leveraging this data, so these examples are only the tip of the iceberg.

Use Case #1: Global Inventory and WIP Visibility

Global traceability provides enterprise-wide visibility to inventory levels, location and status.

A semiconductor manufacturer has leveraged this data to provide contract manufacturing inventory and WIP information to help with their supply chain planning, closing the loop on their “Plan-Do-Check-Act” cycle, at an enterprise level.

While Enterprise Resource Planning solutions are often touted as the “single source of the truth,” in all likelihood, there is not a standardized deployment across the enterprise. What this means is information is seldom readily available and visible. As a result, ERP is a difficult way to approach managing the data that is part of global traceability, despite its role as being the main repository for current inventory and Work in Process (WIP). Having implemented a separate global traceability solution, this manufacturer is better poised to manage operations on a global level, and to better support their “Plan-Do-Check-Act” process loop.

Use Case #2: Lead Time / Value Stream Analysis

One of our customers is using global traceability information to understand manufacturing and supply chain lead time through global genealogy. The company also benchmarks performance at multiple plants that are producing the same products. This knowledge then helps them to analyze lead time data against master data. This information is then provided back to the supply chain planning team to enhance the quality of their master data settings. The aim here is to improve the quality of planning, re-position strategic inventory, and ultimately reduce the cost of inventory and lost opportunities across their global operations.

Use Case #3: Process Intelligence Analysis

A few manufacturers are now using big data collected from multiple sites to perform predictive analytics to spot potential areas for improvement. This information is then fed into their traceability program, which then becomes part of their quality planning and process planning systems. The insights are also used to help plan “vertical launch” New Product Introduction (NPI), where production and sales are launched simultaneously across multiple regions from day one. Detailed histories and genealogies from past launches can be the basis for continuous improvement.

Use Case #4: Maintenance, Repair & Operations (MRO)

Global traceability captures as-built history from the complex supply network that creates finished goods. Some companies are going further downstream in order to capture as-maintained history. They can then utilize all the related track and trace history in their MRO activities to analyze and improve predictive maintenance and global spare parts inventory management. This strategy is especially applicable for those manufactures that operate in an aftermarket, or have large-scale maintenance operations such as is the case in the medical equipment, automotive, aerospace, and industrial equipment industries.


Global traceability is no longer applicable just for traditional use cases. Manufacturers are utilizing the data to close the global PDCA loop, optimize supply chain processes, improve New Product Introduction, and find new opportunities for business improvement in critical operational areas. The necessary enablers are now available to manufacturers, and widely in use. It’s just a matter of seeing the possibilities and taking the next, incremental step.

Now is an excellent time to invest and capitalize on global traceability big data, and that will be my last topic in this series.


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Aug 27 2015

Containment is now Critical in Today’s Global Economy

global_containmentThe nature of today’s global economy means that manufacturing processes need to be monitored more closely than ever. Supply chains are complex. Intense competition means that continuous improvement is a relentless endeavor. Manufacturers today are constantly pushing for any marginal gain that might provide an edge in the marketplace. In a perfect world, adjustments to manufacturing processes could be made without fearing a negative impact on quality. However, experience has taught us that when things change, errors can occur, and quality issues can arise.

When such events do unfold, the results can vary dramatically, depending on a number of factors. A good containment strategy – one that limits the damage of non-conformance to the plant floor, or should I say, “plant floors,” in the age of the enterprise manufacturing network – is worth its weight in gold. We’ve seen the damage done once a defect goes undetected and  multiplies across the marketplace. Increasingly, containment is being viewed by manufacturers as a required capability, rather than merely an insurance policy to rely upon in case of emergency.

Proactively putting a containment strategy in place can prevent defective parts from spilling into the broader supply and demand chains. This strategy can then avoid a domino effect resulting in costly recalls, extended warranty claims, and in some cases, injuries or death. With such high potential costs, it shouldn’t be surprising that implementing such a strategy can achieve a strong Return on Investment or ROI. I know of several cases where a return on investment was achieved in just a few months, simply based on the cost savings of being able to react faster, contain non-conformances, protect brand integrity and avoid potential recall actions.

No Shortages of Examples

We have all read about the challenges that the automotive industry has had in the area of defective airbag identification, so I won’t repeat here. Suffice it to say that this entire ordeal has been quite costly to the corporations involved and has impacted thousands of workers and consumers – not to mention the families that have lost loved ones.

The challenge is that no single producer can ever be perfect in every design and production process. However, the ability to quickly investigate, identify and mitigate any product anomaly is now the minimum bar for entry into automotive. The pursuit of operational excellence demands recognition of this fact. It is incumbent on all manufacturers to implement not only the processes required to address non-conformance situations without delay, but to have the framework and tools required to expedite changes when process adjustments must be made.

First Step – See the Problem

Any plant manager, supervisor or global vice president of operations will tell you that the first step to responding to an adverse condition is to know about it. Visibility must be as near to real-time as possible. Hence, this explains the drive by supervisors to have access to a dashboard – ideally on a mobile device. Another term for this strategic imperative is “operational agility.”

Second Step – Do Something

While step #1 is all about knowing you have a problem, step #2 of actually doing something about it. I call this having visibility to intelligence that is “actionable.” What action can I do to assess the extent of the situation immediately, once I become aware of an adverse event?

Here is where a good containment strategy comes into play. Having an ability to quickly identify the potential scope of the problem, and then actually isolate the defective components quickly, so as to prevent them from moving forward or escaping into the wider production process is now critical. This capability dramatically minimizes the impact from such an event. In many cases, a product issue caused by an up-stream supplier might not be found until much later after the product has been shipped, or worse, consumed. The ability to execute quickly can go a long way to minimizing the impact from this type of event.

The complexity of today’s value chains means accurate product traceability and genealogy data is imperative in order to react in a timely manner. With cases stretching as far back as the early 2000 time period, this has clearly not been the case for the recent airbag debacle. With a lack of detailed traceability and genealogy data one has to assume, whatever containment processes were in place across all manufacturers involved have been rendered useless. This has in turn resulted in a lack of control and an inability to efficiently resolve this issue. Both the financial and human costs have been significant. In this instance, the right containment strategy would not only have delivered a return on investment (by all parties involved), it could have potentially reduced the human toll.

Next Step – Establishing the Framework

As is the case with most large projects, at a high level it is clear what is needed. But, taking that first step to move towards the bigger solution can often be a challenge. There are many benefits of improving real-time visibility to operations – improving traceability and containment effectiveness is just one. Perhaps an ROI can be justified simply based on improved performance. Just be sure that your solution also includes the capability to offer enterprise-level traceability and containment capabilities. Then your project can be off to a good start.


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Aug 25 2015

Kenzo Takai

What does Global Traceability Give you that a MOM Doesn’t?

trackandtraceIn a desire for better quality and continuous improvement, companies and industries are looking to take advantage of all the data that is available when manufacturing goods. The most obvious reason is to avoid embarrassing recalls that can damage brands and take years to recover from. But, in most cases, it’s companies looking to advance their capabilities to meet increased market demand for better quality products in a shorter time frame. The opportunity to gradually ramp up production and quality are gone. Product lifecycles have become significantly compressed, so manufacturers no longer have this luxury anymore.Much has been written on this topic, so you might wonder why I’m writing this post – and two others as a follow up – as a series. The reason is that the issue is moving very quickly—faster than some manufacturers can keep up with. As a result, this topic is now starting to have a major business impact.

In this series, I’ll look at how global traceability is about to move beyond defensive measures to become one of the next big-data frontiers for business improvement. Then I’ll discuss why manufacturing enterprises need to start moving now instead of playing catch up later. For this article, I want to address a very basic question: Why isn’t a global MOM (Manufacturing Operations Management) enough and why should manufacturers invest specifically in a global traceability solution?

MOM is Critical, but Still Only a Starting Point

Global manufacturers are moving rapidly from the old siloed, plant-level Manufacturing Execution Systems (MES) to enterprise Manufacturing Operations Management (MOM) solutions that provide a more broader perspective on how to manage operations as an enterprise capability. This means a consolidated vantage point on how to manage plant and supply chain operations. One of the many benefits of implementing a MOM is improved quality and traceability. Specifically, this type of solution can provide:

  • Governance and standardization of best practices—discover and deploy improved practices across the enterprise
  • Common master data—a single version of the truth is essential for visibility and understanding
  • Capture of all events—a MOM captures all “5M” events of interest (Man, Machine, Material, Method, Measurement)


Why isn’t that enough? It’s certainly better than the “old” days when there was little or no visibility into production. However, the stakes are much higher today. MOM systems can now be significantly extended in terms of quality and traceability.

To put it simply, MOM is focused on the “now.” MOM is all about what is being built today or this week, and maintaining the associated data required while parts and materials are active in the manufacturing process. MOM is addressing the need for speed, and not having a massive amount of data being processed that might slow down production systems.

Of course, this concept is counter to today’s obsession with data, and the desire to collect more and more of it. Here is where Global Traceability comes in.


  1. Global cross-instance traceability. Today’s manufacturing environment is highly distributed, in terms of how finished goods are produced, delivered, and maintained. The complexity of managing production and product supply networks makes it difficult to trace activities across operations and suppliers. A global traceability solution can connect the dots across instances, providing a single view both forward and backward across multiple sites and systems. Problems that would take days or weeks to trace can be solved in minutes, leading to rapid containment and minimal impact.
  2. Handling mid- and long-term big data. Increasingly, manufacturers must archive data to meet regulatory and/or customer requirements. This means storing vast amounts of historical trace data for a long period of time, while offering online availability. Imagine a typical scenario where key components are serially tracked, a Bill of Materials (BOM) structure is complicated, and production is extremely high volume. All of this data must be archived and retrievable for analysis at any time—indeed, at a moment’s notice. This is too big a task for a MOM, but it’s exactly what global traceability solutions are designed for.
  3. Third-party collaboration. To achieve true end-to-end global traceability, you need integration with multiple third-parties—from suppliers and logistics companies to end customers. And, this integration may need to change quickly if a supplier should go bankrupt or have a production disruption. A global traceability system will integrate all this data to create a single repository for real-time visibility and control, along with user apps and interfaces that present the right information in the proper context. Most importantly, this type of system will retain the precious knowledge of what materials and components were part of what build process, part, final assembly and ultimately, each final product – a truly daunting task.



An enterprise MOM solution, while a key component to managing manufacturing operations, is not a global traceability solution. Rather, it provides the platform and data that make a global traceability solution possible. When viewed as an incremental investment, and as a way to leverage the investment in an existing MOM solution, adding a global traceability capability is very easy to justify.

So far, manufacturers have used global traceability primarily as a defensive measure to contain a problem. Now they’re beginning to realize that this type of solution can be leveraged for much, much more. Global traceability is poised to be a driver and enabler for process and operational improvements, and could be “the next big thing” in manufacturing big data. In Part 2 of this series, I’ll look at how some actual manufacturers are capitalizing on global traceability to create new business value through new and deeper visibility.


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Aug 20 2015

The Post-Fourth Industrial Revolution World – Part 2

21884137_sThis article is a continuation of a post I just wrote that explores in greater detail the hype that may, or may not exist in our future (link to Part 1). The topic is around expectations on what life will be like living in a Post-Fourth Industrial Revolution World.  But first, let’s take a look back in time to see if some of the origins of this transformation might have sown their seeds …

It is 2008 All Over Again

To judge whether this could be truly revolutionary, I believe one should fast-forward and take a look at the new industrial world that is in the making. The industrial world today is somewhat like the consumer world seven years ago, before cell phones become “smart” and mobile tablets were almost unknown. Probably very few could have seen why we need our mobile devices to connect to the Internet, other than for the purpose of reading emails. And most would contend with their lives without Apps, social media or all other gadgets such as watches that now can connect to their cell phone.

Back in 2008, some of the most advanced phones were made in Japan. Names like Nokia and Blackberry were the dominant forces in the cell phone market. Few would have seen the coming of iOS and Android as the dominant software platforms that would eventually push out phone giants who did not adapt. It has become a world that is all about mobile phone Apps. Phones that cannot run these killer apps don’t sell, despite their superior HW capability. Hundreds billion dollars of transactions are now running on these platforms – touching almost every part of our daily life.

The Brave New World

In the post-Fourth Industrial Revolution world, industrial Apps will be running on a few dominant software platforms that orchestrate smart products, people, devices, sensors, production cells, robots, production lines and factories, each of all these will not only have its own IP address, but will also have “smart” built-in logic with a capability to collaborate with each other through a set of standards and protocols.

The manufacturing of a product could be about running an App on an operating system platform that coordinates all the manufacturing resources globally, on demand. Production Lines would become so adaptable that they are no longer lines but individual cells, reconfiguring themselves according to the product coming down the line carrying its own specifications and Bill of Material (BOM). Any unplanned interruption like a quality issue, machine problem or skilled worker out sick could be easily handled on-the-spot, through dynamic negotiation between intelligent agents, to arrange an alternative path. This scenario is somewhat similar to how flight delays and changing weather conditions are handled by travel agents.

This new world would operate in drastic contrast to the paradigm of factory automation and CIM (computer integrated manufacture) initiatives from a decade ago, based on centralized control. This world of distributed intelligence operates through a dynamic network of smart devices that are capable of identifying themselves, discovering others as well as collaborating and optimizing on-the-fly!

The endgame does not stop there. In the post-Fourth Industrial Revolution world, these industrial Apps will talk to other Apps, including those in the consumer world. Facebook, Amazon and Twitter, among others, will have access to vast resources from the industrial world to better connect industrial output to consumer demand. The line between B-to-C and B-to-B will be blurred and consumer will experience a whole new world.

The world of design and applied research will also join the game. The science of physics, biology, chemistry, material science will be part of the building blocks for designing new products from a molecular level, as they are being exposed as Apps and services, pulled by consumer demand as needed. This mechanism is sometime called “Smart Pull.”

There are apparent obstacles ahead in coming to terms with global standards, converging SW, HW, ICT technologies and some of today’s players will extinct or evolve. This new world may dawn slowly and gradually through-out the next decade as the industrial world is highly complex and interwoven. Many leaders are currently caught up by the complexity and forgot to view Industry 4.0 in the light of new era of experiences.

The Unique Experience

Getting back to Veerle’s business trip, she celebrated her wedding anniversary two months later. She was surprised when her husband bought her a new watch with the same design that delighted her in California. But this watch had a new silver material engineered just for her DNA, thereby avoiding any skin allergy. Intelligent Apps and Agents spanning consumer and industrial platforms have been actively working behind the scenes to dynamically synthesize science, design, manufacturing and logistics. What has been created is nothing short of revolutionary, when viewed from the perspective of consumer experience. This is our new reality that in the post fourth industrial revolution world, we will be hard-pressed to imagine how we lived without this incredible new level of product personalization.


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Aug 19 2015

The Post-Fourth Industrial Revolution World – Part 1

29178156_sWhile on a business trip in California, Veerle met her colleague Linda, who was wearing a silver bracelet with a spiral design that got her attention. She took a picture and posted it to her Facebook account, commented that while it was a really nice piece of artwork, her skin may be allergic to silver and so she would not be able to wear it. She then attended a business meeting on the topic of the Fourth Industrial Revolution. She did not realize at that time, but what she would soon learn will change her whole experience on her tasteful affection towards jewelry accessories.

Hype or Hope?

There have been many interpretations and messages overflowing the media about the Fourth Industrial Revolution. Depending on the agenda behind the government, technology or automation vendor, system integrator or consulting partner, the emphasis and story is different. Some of the common themes would include:

  • Integration from top floor to shop floor
  • Integration across supply chain
  • Integration between engineering, design and manufacturing
  • Shift to a service-oriented business model
  • Installation of new robots and automated equipment (digital factory)
  • Proliferation of the Internet of Things (IoT)


But weren’t we already doing all these things before someone labelled it as the Fourth Industrial Revolution, or Industrie 4.0, or any of the other names currently being used?

Is there anything truly revolutionary going on, or is this just marketing hype? Adding to the confusion is the fact that the “Industrie 4.0” terminology came from the Germany government, as an initiative to spur investment in manufacturing. Then, many other countries followed suit to start their own similar initiatives. China 2025, La Nouvelle France Industrielle, Smart Manufacturing Leadership Coalition (US) and the Robot Revolution Initiative Council (Japan) are just a few. Each of these initiatives is backed by government resources. What is the common core concept that is driving these initiatives and their respective terminologies?

What is Different This Time?

This is not a revolution that has already happened. It is about groups of organizations putting resources to start a revolution. Many who do not understand this core concept and its endgame might easily jump to the conclusion that this is nothing more than an abstract marketing hype without any substance behind it. The truth is this revolution has been gaining momentum for quite some time, with some origins that can be traced back to 2008.

Part 2 of this article will explore the roots of today’s revolution, and will then point to the brave, new world we are now entering – with user experiences that are far beyond what exist today.


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