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Apr 23 2013

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The Manufacturing Process as Competitive Advantage

“Business processes are the main intellectual property and competitive differentiator manifest in all business activity,” – Peter Fingar

 

It is time to reevaluate how we look at our information management toolset and examine our business from a process-centric perspective. Information silos cannot be accepted and information can no longer be departmentally owned.  We need to orchestrate information into strategic and sustainable competitive advantage processes that support the extended enterprise and include a wide range of stakeholders across the value chain.

In 2003 there was a hotly debated article by Nicholas Carr in Harvard Business Review titled IT Doesn’t Matter.  He argued once all companies have an ERP system there is no advantage as every company will have the same toolset.  Peter Fingar, a leading professor and business advisor, argued strenuously in his responding book, IT Doesn’t Matter: Business Processes Do, that it never was the IT tools but the processes within the company that provide differentiation.  That argument seems even truer today, so why are most manufacturing companies still deploying rigid, data-centric, licensed software silos on the manufacturing plant floor instead of unique, distinctive, strategic and changeable business processes?

My recent whitepaper, Improving Manufacturing Excellence, explains and outlines the idea of Production Process Management (PPM) as the new process-centric approach for manufacturing companies.  In the world of PPM, information technology is used to identify and support a process-centric environment based on the chronological steps necessary to operate your business as you see your needs today and to provide an easy revision path as you adjust to changing conditions in the future.  As is the case with Business Process Management or BPM, in the world of PPM you also own your processes–they are not the property of a software vendor.  You can easily make changes to your processes using process modeling concepts, not software code. Very importantly, a process-centric view gives rise to the concept of sustainable competitive advantage through best proprietary processes, not industry-wide company leveling best practices.

Information technology is arguably the most cost effective investment to build your competitive advantage. This seems especially applicable on the plant floor, where we have only just begun effective strategic enhancement.  If you still have dozens of disparate and disconnected software applications (as exists in most plants) that do not represent a fully connected process-centric environment, then you probably have opportunities for improvement.

In place of another software application, think in terms of holistic objectives supported by sequential and chronological processes that are aimed at company-wide goals while supporting individual steps in the work space.  Begin by assessing where you are and how technology might affect your company over the next few years.  Examine your ability to make changes to processes or to even understand how the existing processes work or were developed. Think in terms of cross functional requirements that begin with the customer and conclude as a satisfying financial return. If the vision is adequately holistic and seen from the highest level, the lower level processes and their intersection with departments will be self-evident.

If you are interested in learning more, you can download and read the entire “Improving Manufacturing Excellence: Managing Production Processes Across the Value Chain” white paper.

 

Permanent link to this article: http://www.apriso.com/blog/2013/04/the-manufacturing-process-as-competitive-advantage/

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