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Mar 28 2012

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Why “Go Global” with Manufacturing Operations Management?

Over the past several years I have worked with many companies trying to evaluate how to implement a global manufacturing operations management (MOM) solution across all of their plants. These companies quickly discover that this highly strategic choice impacts multiple operating units, departments and people. This decision will ultimately determine competitive relevancy in areas such as how quickly they can respond to change, how well new products are scaled into full production and how cost effectively manufacturing processes are managed on a global basis.

But why are these companies still seeking to achieve such competitive differentiators? Most of them have already invested 10s to 100s of millions of dollars on ERP, SCM and other enterprise solutions. Could they not achieve such capabilities through the deployment of these solutions? Did they not gain the competitive differentiation they were seeking through these investments? Unfortunately, in most cases the answer is “no.”

Achieving visibility into, control over and synchronization across manufacturing operations is probably the most sought after outcome from deploying a global MOM solution. It also provides the most compelling value proposition. Some members in the companies I work with feel that they have already achieved these capabilities. In reality, it is more a matter of degree of the time and detail that now exists.

For example, most companies know their inventory and production capacities on a monthly basis. But does this really help the sales person trying to win a competitive bid? In most cases, it doesn’t. These decisions are often needed quickly. Can the order for a particular product be delivered on time and at the right price, in order to win the deal? Real-time visibility into global operations and understanding the enterprise’s production and inventory situations at any time enables profitable decisions to win new business and satisfy current customers.

Visibility is just one consideration when deploying a global manufacturing solution. Control of operations is just as important. Suppose you see an issue in meeting the requirements of a customer order. Either a shortfall in inventory, limitation of production capacity or delivery cost constraint. It is only through being able to change or control what you see that you can truly possess a competitive “leg up.” Multiply this benefit across many plants and quickly becomes clear the potential upside for implementing a global platform-based approach to manufacturing operations management.

One of the clients I have had the pleasure to work with is in the process of improving their global visibility and control over the processes that actually drive their operations. With this control, they plan to make informed decisions on what to make where, and when, based on the demand they see in the market and the understanding of their enterprise-wide production and delivery costs. This is an important distinction. Manufacturers looking to optimize their global operations should consider in terms of what level of visibility and control they require to be competitive in today’s global markets. I believe that many will find out that the level provided by ERP and SCM solutions does not give sufficient competitive advantage to win in today’s environment.

If you are a global manufacturer supplying many different components to multiple clients located all around the world, it might be a good idea for you to consider what processes you need visibility and control over. A solution that enables more standardized processes across all operations will pay a hansom dividend in many ways, including greater efficiency, higher quality and lower costs. These all seem like excellent objectives and worthy consideration when choosing a global approach to manufacturing operations management.

Permanent link to this article: http://www.apriso.com/blog/2012/03/why-%e2%80%9cgo-global%e2%80%9d-with-manufacturing-operations-management/

2 comments

  1. rubber manufacturing

    Dear Gerry,

    This is a great post, and I particularly enjoyed how you tied in all the elements of the business cycle. Manufacturing is often seen in a vacuum. In fact – as you point out above – it’s just one link the chain, and for example is inextricably intertwined with sales.

    Cheers
    Claudius Jaeger, Artemis Rubber

    1. Gerry Fosnick

      Claudius,

      Thank you for your positive comments. It is good to hear feedback re-enforcing manufacturing as a key component of the supply chain and business competitiveness in general. When dealing with companies looking to be globally competitive we find they understand this aspect. However we are still finding a fair number of companies that do not consider these aspects upfront and then will run into challenges down the road due to undervaluing manufacturing contribution to the business.

      Kind Regards,

      Gerry

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