Apr 02 2013

Investing in Global Traceability to Ease Regulatory Compliance

Categories:

Globalization, Product Traceability & Genealogy, Regulatory Compliance

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April 2, 2013

Translation

Recent and emerging regulations across multiple countries and regions are putting pressure on all manufacturers, from batch processors to complex discrete industries, to strengthen their capabilities around traceability and chain of custody. Pharmaceutical companies, for example, have renewed urgency to meet California’s new e-pedigree law due to take effect in January 2015, which requires serialization and full upstream and downstream genealogy. These laws are meant to ensure public safety and to help eliminate counterfeiting which poses significant health and safety risks.

A quick Google search uncovers the following sample of regulations manufacturers must respond to:

  • US Federal Track and Trace law 21 U.S.C. 355e
  • 2011 FSMA attempts to move towards prevention rather than reacting/responding
  • European Union (EU)’s European Food Safety Authority (EFSA)’s Regulation EC/178/2002
  • Bio Terrorism Act 2002, Section 306: one up, one back tracking

 

The volume of regulations impacting manufacturing operations is hardly a new challenge. Over the past 20 years, regulations have steadily increased. According to a recent study: “Macroeconomic Impacts of Federal Regulation of the Manufacturing Sector,” it is estimated that “2,183 unique regulations have been imposed on the manufacturing sector between 1981 and April 2012,” most coming from the EPA in the United States (source). According to the National Association of Manufacturers, these regulations are costing the manufacturing industry between $265 and $726 billion a year, a large chuck of the $1.7 trillion a year manufacturing industry.

Regardless of where a business is domiciled, manufacturers are subject to the regulations in the regions that their product is sold. What this means is that a given product must meet the strict requirements of multiple countries and governing bodies. In some industries, the cost of compliance can be upwards of 35% of COGS and an even higher percentage of R&D costs. And, while the cost of compliance can be high, the cost of not complying can be even higher. A compliance failure can result in significant direct costs in the form of fines or litigation. All industries can benefit from a global traceability solution that helps reduce both risk and cost.

Those manufacturers that have invested in a global traceability solution gain significant advantage over those that lack this type of global visibility. For starters, elevating traceability to the enterprise level enables these manufacturers to measure product compliance consistently and in near real-time across their enterprise. Plant performance can be benchmarked and compared with minimal impact to plant level resources and systems. Furthermore, a single, global traceability repository enables pro-active monitoring which reduces both cost and risk.

Manufacturers that fail to upgrade their traceability across their supply chain expose their shareholders to undo risk. Planning for business continuity must include a solid plan for capturing a minimum of “one step forward, one step back” capability in order to ensure access to both developed and emerging market. Investing in “end to end” traceability may be one of the best ways to protect your brand, maintain existing business relationships or develop new ones, and ensure access to high-growth developing and emerging markets.

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Mar 26 2013

Is Risk-Averse Innovation an Oxymoron?

Categories:

Agile, Continuous Improvement, Innovation, Manufacturing Execution System, Manufacturing Operations Management, QMS, Technology, Warehouse Management System

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March 26, 2013

Translation

According to a recent IDC webcast I attended, nearly 60 percent of CIOs interviewed claim their top goal is to better align their IT organizations with their business. In other words, these CIOs feel they must now focus more on business versus technology strategy (register to attend this free webinar here). On one hand this seems reasonable – CIOs are part of the senior management team, so should be focused on the business first, and how IT can be used to further advance these initiatives.

At the same time, the business has made significant investment in its IT systems. CIOs “own” wide range of strategic applications (ERP, MES, WMS, QMS, CRM, etc.) used across multiple locations by nearly every employee in the company. Maintaining manufacturing execution systems and others takes a huge effort, especially for those organizations that truly operate on a global scale across their enterprise. The decision on how to maintain and invest in these IT systems has a direct impact on overall company performance.

Industry leading CIOs strike a balance between their strategic business objectives while maintaining an IT investment strategy. Successfully achieving this objective can help the business to grow while improving competitive advantage.

As part of achieving this balance, some CIOs attempt to rationalize their applications portfolio to remove those programs deemed too costly to maintain, but don’t actually deliver much business value. But, all too often, this discussion is limited to what applications are going to survive instead of a broader discussion about technologies and IT platforms that could best address the future business needs of their enterprise.

Other CIOs take a different approach, electing to simply keep maintaining their legacy applications. This strategy feels “safe,” and falls under the guise of “if it isn’t broken, don’t fix it.” Unfortunately, a CIO that adheres to this strategy over an extended period of time will eventually run into trouble … systems integration problems begin to occur, training needs are unmet and staff turnover can create a nasty support issue if no one knows how to make an adjustment or perform a system upgrade. In the end, there comes a time when legacy applications simply cannot be supported anymore and must be retired.

Reducing Risk to Accelerate Innovation

The best approach is to simply avoid getting “backed” into a corner where a legacy application suddenly fails, which then creates enormous pressure to find a quick solution for a problem that might not be that easy to address. It is all about finding a balance between a risk and return on investment. Now is the time to start thinking about a strategic lifecycle for the legacy applications that are, in essence, orphaned today with not real tie-in to your broader manufacturing strategic objectives. The best perspective is to think about its value to the business, not just to IT.

The visionary CIO looks ahead and changes before they have to. They seek an opportunity to support business changes and elevate the value they bring to the table. If you want to be such a leader, then you will need the “tools” to do so. That means having the flexibility to perform frequent changes within your IT environment without worrying about how to accomplish these changes.

Implementation of a flexible IT platform that adapts to the changing needs of your business can be a powerful enabler of innovation. For the innovative CIO, an introduction of a next generation IT platform for manufacturing is an incredible opportunity to shift their focus away from simply maintaining IT applications to how they can enable the business to take new directions and respond faster to change.

This type of thinking can literally change the way a company does business. New processes and strategic opportunities can instead be embraced and pursued rather than minimized and avoided. This type of mindset can be a turning point in defining a company’s manufacturing transformation and landscape.

Visionary CIOs have the courage to enter the path of improvement rather than stay in status quo. They carefully identify business needs. Then, they plan, design and execute this transition in multiple steps, learning from each step in execution.

Are you a visionary CIO? If not, what is holding you back? Are you risk-averse? One of the most important decisions you face on your career journey is choosing the right IT strategy that also supports your business strategy. If given the choice, I would propose the flexible option results in less risk than the static one … but in the end, you will need to make this decision.

 

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Mar 20 2013

5 Ways to Best Leverage Your “Internet of Assets”

Categories:

Cloud, Collaboration/Social, Globalization, Lean, Manufacturing Intelligence, Manufacturing mobility, Mobility, Technology

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March 20, 2013

Translation

I just read one of IDC Manufacturing Insights’ latest top 10 predictions reports, entitled: Operations Technology 2013 Top 10 Predictions. Prediction #6 caught my attention as an interesting perspective on what it will take to be a global manufacturer today. This prediction states that manufacturers seeking to operate on a global scale must increasingly invest in the technologies that will allow their operations to be more virtual, for the simple fact that manufacturing operations management is increasingly being performed on a more holistic, global scale. Greater virtualization means greater reliance on automation and remote reporting, which explains why there is such a great need for expanded operational intelligence.

Plant-floor equipment must share operational status with other equipment, which might now be located in other factories at various locations. Data and intelligence requirements will only escalate, creating huge pressure to more efficiently access and understand big data now being generated by each of these plants. Obviously, this requirement might be seriously at risk if your equipment is not capable of remote management, monitoring and sharing of operational performance. Collecting and processing all this information will be essential to coordinate the global plant floor. Your operations network will become more agile and dynamic. And, it will support rapid reconfigurations of production operations, and will be able to flexibly respond faster to ever changing customer fulfillment requirements.

It is for this purpose that the “Internet of Assets” can become a real value-add. Let me explain.

Machine-to-machine or m2m communications become an important factor on how operations are managed and executed. Many remote sensors and tracking mechanisms are already located throughout a factory floor, helping to track Work in Process inventory to ensure the highest efficiency as well as to reduce waste. Once your factory “floor” goes virtual and is located across multiple geographies, however, it is no longer possible for this machine-to-machine communications to occur locally, within a wide area network. Now, this communication must rely on a different technology to share data, which is where the Internet comes in. By simply integrating Wi-Fi into your equipment, it can then be possible for m2m communications to occur anywhere, across the globe.

According to IDC, the following technology enablers will put you on the fast track to achieving your own global plant floor, letting you best leverage your “Internet of Assets”:

 

  1. A network of intelligent sensors, devices and equipment that can share plant-specific information on a wireless network, in real time.
  2. A cloud-based platform that enables those intelligent devices to interact and cooperate with people and IT applications.
  3. A decision support system based on Big Data analytics that finds patterns in huge amounts of information and helps manufacturers spot trends and track issues back to their root causes.
  4. Social business tools that act as a collaborative hub to enable the rapid diffusion of information, for example machines that can tweet their status.
  5. Mobile applications that enable knowledge workers on the plant floor to access intelligent information in real time.

 

Those manufacturers that invest in the above technology investments will be well poised to take advantage of enormous productivity opportunities by operating more holistically, on a global scale. The reporting and process improvement advantages alone should pay for the technology investments, given the ability to perform and maintain process improvement is indeed possible.

How far along are you with your “Internet of Assets” journey?

Gordon can be found on Google+.

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Mar 14 2013

10 Ways to Engage in Better Decision Making

Categories:

Agility, Business Process Management, Manufacturing Intelligence, Mobility, Technology

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March 14, 2013

Translation

Every enterprise is at a different point in developing their process for converting data to information and leveraging intelligence to develop insights. Based on recent market studies, in person interviews and my perspective of the industry, it is clear that significant opportunities await those who better align and integrate manufacturing and business intelligence systems. Those electing to make this investment will most likely be rewarded with improved operational and financial performance, allowing them to differentiate from competitors.

However, it does take effort, investment and the courage to move along your intelligence lifecycle, in order to reap the rewards of your efforts. What is most important is to have the vision of where you want to be in the end, which can then provide the direction on where to proceed. Regardless of where you are in your company’s evolution, here are ten ways to help achieve progress along your lifecycle and engage in better decision making:

 

  1. Evaluate and renew your business processes holistically, on an end-to-end basis, so as to support more intelligent decisions and improvement
  2. Automate data collection and cleansing through plants and enterprise
  3. Implement global manufacturing intelligence, and consider implementing it as an embedded component of an enterprise Manufacturing Execution System (MES) or Manufacturing Operations Management (MOM) solution
  4. Expand your operations management capabilities to be more global in nature, to support process improvement and quick action across more functions and locations including partners and suppliers
  5. Ask production & other line of business teams what decision support they most need to succeed, and then begin to add this capability to your existing MI / BI systems
  6. Craft information flow so MI feeds “cleanly” and quickly into BI
  7. Consider what self-service reporting capabilities you could provide directly to end users to empower them with better intelligence
  8. Leverage mobility, social, and cloud technologies to make data capture and intelligence distribution more efficient
  9. Create collaboration opportunities based on integrated MI/BI data
  10. Renew business processes and support them with your software to fully leverage the power of business insights

The benefits can be big for those who can successfully align and integrate their manufacturing and business intelligence systems. Those with granular, actionable insights into their current situation will be the winners. They will learn and benefit from these insights. As leading manufacturers embrace this strategy, they are raising the bar with customers, shareholders and employees, creating a viable business strategy for sustained competitive advantage.

The critical question to ask is, what path will you follow and what will be your next step?

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Mar 12 2013

Working with the White Space

Categories:

Agility, Business Process Management, Enterprise Software, Manufacturing Operations Management, Technology

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March 12, 2013

Translation

In the 1990s, when companies were looking to extend material requirements planning (MRP) into the enterprise, ERP was born. The purpose of the initial application was to automate back office functions, such as financial accounting and human resources. Eventually, however, front office functions that catered to customer and supplier relationships were integrated in, as well.  Of course, the more one gets, the more one wants, and customers were soon asking vendors to design turnkey application platforms that integrated everything under the sun.

Large software vendors complied, making acquisitions to build-out functionality or going back to the R&D drawing board. Soon, vendors were promising to deliver all that their customers were asking for, and more. But despite the fact that a vendor may be able to check off every capability on your RFP, inevitably, you will find that the software does not fully meet your needs.

Your business has unique requirements based on industry, geography, business processes, and power users. There is no such thing as “one size fits all,” when it comes to application bundles—especially when a company is trying to connect the shop floor to the top floor.

This type of scenario means that there will be coverage “gaps” when purchasing any type of enterprise IT application. Despite investing in a large-scale software deployment, a company will likely have to dig deeper into the corporate coffers to do some customization work in order to fill the gap between the enterprise and manufacturing IT systems.

This fissure in functionality is what we refer to as “white spaces.”

In a business context, white space refers to the areas in an organizational or functional chart where there is no accountability. This can then become an area that presents the most potential for things to fall through the cracks.

In software, white space exists when the tightly coupled “application bundled suite” does not fully support the organizations needs. When this happens, the solution is not to buy more software because it is not an application issue, it is an architectural issue. What companies really need are flexible IT platforms that can serve up information where and when it is needed.

A Three Platform Architecture Is the Answer

Of course, if you find yourself in a situation where the chosen software suite is not delivering on its promises, your first step is to perform a complete gap analysis. Identify the functional tasks, determine the requirements for each task, and then figure out how the software application presently supports, or fails to support, the business objectives, processes and systems within the organization.

The next step is to use this as a starting point for adopting a review of whether the gap or white space to be filled is best identified as planning, design or execution. Based on your evaluation, the best way to fill the application gap will then come from your ERP (planning), PLM (design) or manufacturing operations platform (execution). Rather that adopting a mindset of throwing more applications at your solution, consider what existing application could be extended to fill the gap. Industry leading manufacturers understand that all activities and processes can be grouped into one of these three categories, as a way of further simplifying their operations while steadily eliminating application gaps. Read more on this topic here: What is a Three Platform Strategy?

Once an application gap is identified as planning, design or execution, the next step is to decide how your existing application capabilities can be expanded to fix the gap. Service Oriented Architecture (SOA) and Business Process Management (BPM) are technologies and frameworks than can help address this challenge, laying the framework for a business methodology that focuses on continuously improving business processes. What results is that you now have really powerful and agile IT platform. It is one that can not only transform the way your organization handles change, but it is hands down the best way to wipe out the white space problem.

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Mar 07 2013

3 Ways Demand Response Will Lower Costs for Industrial Facilities

Categories:

Best Practices, Business Process Management, Continuous Improvement, Quality Improvement

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March 7, 2013

Translation

Is your facility struggling to pay its daily expenses?  Maybe your organization is just looking for an additional source of income.  In the midst of our nation’s hard economic times, thousands of businesses are searching for an answer to their financial struggles.  Participating in a demand response program will not only save your company money, but it will also supply it with that extra monetary cushion you’ve been searching for.  There are three main aspects to demand response that will be able to help any struggling facility.

Before reviewing these aspects, please note that even though demand response events are called only a few times per year, those facilities looking to participate must be flexible in their processes and schedules.  Notifications of an emergency event can be issued as little as 10 minutes before the event starts.  To make it easier, reputable demand response providers will work with your facility to come up with the simplest, most effective reduction strategy to perform during these events.

1. Earn Additional Income to Offset Overhead Costs

Demand response is a program that utilities rely on to protect the electric grid during times of high demand.  In order to compensate during these peak hours, participants in a demand response program voluntarily reduce their electric usage.  After successful reduction, the participant is financially compensated for their time and efforts.

As an example, if a large plastics manufacturer reduces 1,500 KW during a demand response event, that company will receive a check for approximately $65,000, which they can use however they like.

This popular program recently emerged over the past decade, and thousands of organizations are taking advantage.  Typically, there are no requirements for performance and no penalties if your facility is unable to reduce when reductions are called for.  Plus, there are no upfront costs to get started.

2. Save on Monthly Utility Bills

Participation in a demand response program can also help to save money on your facility’s electric bill.  During peak hours, demand for electricity is high, which consequently leads to a spike in price.  By reducing electricity consumption and shifting workload to non-peak hours, your company will see a reduction on your electric bill.

3. Prevent Damage to Expensive Machinery and Equipment

When a utility thinks it may not meet demand, it will sometimes reduce voltage until a supply of electricity builds up again.  These voltage fluctuations will lead to brownouts, and these brownouts can cause serious damage to your facility’s equipment and heavy duty machinery.  Repairing or replacing damaged equipment could cost thousands of dollars, but those who take part in demand response will be notified when voltage fluctuations are expected to occur.  With advanced notice, your facility will have enough time to power down any large machinery that may be harmed by a blackout or brownout.

On the rare occasion that the electric grid experiences a large amount of stress, facilities that take part in demand response will be the ones to benefit.  With monetary payments, a lower electric bill, and notifications of voltage fluctuations, facilities enrolled in demand response will be given the opportunity to stabilize the grid while creating another source of revenue.  Visit Energy Curtailment Specialists to learn more about the program and how to get started.

Sarah Battaglia
Energy Curtailment Specialists, Inc.

Sarah can be found on LinkedIn and Google+.

 

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Feb 28 2013

5 ways To Advance Lean Manufacturing with Real-time Intelligence

Categories:

Agile, Agility, Business Process Management, Innovation, Lean, Manufacturing Intelligence, Manufacturing Operations Management, Supply Chain, Supply Chain Visibility, Technology

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February 28, 2013

Translation

Previously in a post titled: Using Real-time Intelligence to Enhance Lean Manufacturing, I wrote about how the necessary technology now exists, and is increasingly being used by manufacturers and their suppliers, to apply greater automation through the use of real-time information as part of a Lean manufacturing strategy. Interestingly, the full potential of the “The Toyota-Style Information System,” as Taiichi Ohno envisioned it, is finally being realized today.

Here are five specific ways this new-found real-time capability can be used to take Lean manufacturing to a new level:

 

  1. Leverage second order information – Dynamic data, such as the up-to-the-minute or up-to-the-second standard deviation, micro-trends and variability can now be used to trigger better actions and control processes (such as dynamic buffers, dynamic Kanban flow, real-time TOC). These data can of course be used to support Six-sigma improvement efforts and reduce DMIAC cycle time for projects, as well as to improve the accuracy of master data in planning systems (standard lead time, standard cost, etc).
  2. Extend in-process visibility/intelligence for enterprise operations decision support – This is different from typical batch-based business intelligence or after-the-fact analysis. Real-time in-process visibility enables prompt human decision-making, in effect putting executives in direct control of the manufacturing “steering wheel”. While executives do not need to know all the real-time details in operation, this capability is especially important when dealing with a critical event in the supply chain, such as during a natural disaster or an unplanned failure of a bottleneck machine.
  3. Enable pull process to supply chain partners and customers – Synchronization of suppliers and sales is key to Lean initiatives, even when most Lean improvement efforts are focused within the four walls of a production facility. Only by coordinating in real-time with outside upstream and downstream partners can manufacturers approach the full potential of Lean practices.
  4. Sustain Kaizen – Kaizen drives many small steps of change in the Lean journey. The effect of the small changes in shop floor layout, work sequence, equipment, methods, people and material can all now be captured and made available in real-time. This makes possible rapid measurement of Kaizen results and the bench-marking of operational KPIs across multiple facilities to reinforce common goals.
  5. Increase process and supply network flexibility – Real-time data, if coupled with the ability to act, opens up the possibility for new levels in process and supply network flexibility. Companies now have the information they need to make decisions about ramping up suppliers, switching processes and reconfiguring supply networks to meet changing conditions.

 

Harnessing real-time information in these ways is not just possible, it’s becoming more and more practical and cost-effective. In some industries, it’s becoming a financial and competitive imperative. Today is nearly 25 years after Taiichi Ohno’s seminal book, and we finally have the technologies to unleash the full potential of Lean methodology. This accomplishment was beyond the reach of its inventor, but it’s now within ours.

Are you using real-time access to manufacturing intelligence to support your Lean manufacturing across the enterprise? If so, I would be very interested to hear your stories in the comments below. If not, I would be equally interested in have a discussion to explain what is now truly possible!

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Feb 26 2013

Using Real-time Intelligence to Enhance Lean Manufacturing

Categories:

Agile, Agility, Lean, Manufacturing Intelligence

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February 26, 2013

Translation

Lean_manufacturing_intelligenceWhen Taiichi Ohno first formulated his concept behind the Toyota Production System – now evolved into Lean manufacturing – he was several decades ahead of his time.

As described in his 1988 book, “Toyota Production System: Beyond Large-Scale Production,” his concept was based on a Pull approach to manufacturing, where processes and actions are triggered by actual events in the real world – such as a machine failure or the need for a part on the production line. This was opposed to the old way of production, called Push, where processes are guided more rigidly by plans and schedules.

In theory, Mr. Ohno proposed 2 pillars that formed the foundation of TPS. These are JIT (Just-In-Time) and autonomation (Jidoka). Both pillars are based on the concept of a Pull signal triggering a business process based on actual, real-time information.

JIT requires production activities to be carried out at just the right time in order to minimize any queuing of jobs or materials, which are considered waste. For example, the completion of a product downstream automatically triggers the start of an upstream assembly operation, so there is no unnecessary queuing of work-in-process materials.

Autonomation is about automating the business process of stopping machines and correcting problems based on a real-time response to the unplanned event of machine malfunction. This can prevent production of defective parts, eliminate overproduction and avoid delays. Autonomation relieves the workers from the need to continuously judge whether the operation of the machine is normal.  The workers are then only engaged when there is an alert for a problem and hence can simultaneously supervise several machines to achieve better cost-effectiveness.

So why was Mr. Ohno ahead of his time?

Because the technology to fully enable his vision didn’t exist in 1988. Pull approach requires the real-time flow of data among all the steps of manufacturing, so that processes and timing can be tightly synchronized. Back then, with only mainframe batch-processing and rudimentary event sensing available, Taiichi Ohno sought to implement his system without the use of computers. And while he couldn’t fully realize his vision, he was able to succeed sufficiently to revolutionize production at Toyota and at manufacturing facilities around the world.

But that was then. Today, the necessary computer technology not only exists, but it is increasingly being used by manufacturers and their suppliers to explore the usage of real-time information in a complex production and supply chain. That means the full potential of the “The Toyota-Style Information System,” as Ohno envisioned it, is finally beginning to be realized today. And, it is making a very large impact on manufacturing enterprises.

In my next post you can read about specific examples how real-time visibility to manufacturing intelligence can be used to take Lean manufacturing to a whole new level.

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Feb 15 2013

5 Ways to Measure Operational Excellence

Categories:

Agile, Agility, Business Process Governance, Continuous Improvement, Globalization, Innovation, Traceability

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February 15, 2013

Translation

5 ways to measure operational excellenceI find it interesting how phrases get coined and become part of our vocabulary, when in fact, considerable confusion exists around a given term’s definition. These “pie in the sky” phrases sound good, so people are eager to use them to describe how their production processes are performed or their inventory tracking capabilities are achieved. But, in the end, if a common definition doesn’t exist, what is really being said at all?

It is under this scenario that I would like to talk about the phrase “Operational Excellence.” On paper, it not only sounds good, it looks good. Who can argue with a manager explaining that they adhere to a strict set of guidelines to achieve the highest levels of operational excellence? But, if we peel back the onion, what exactly does it mean to perform at a level of operational excellence?

The first question is “Must it be comparative?” In other words, can only the top 20% of manufacturers truly be operating at a level of operational excellence? Or, theoretically, could all operations be performed in an “excellent” manner? I think culture must be considered in order to find an answer. For example, from my experience in working with our German colleagues, they are uncomfortable with using this phrase because the term “excellent” has extraordinary qualities, which are seldom seen in business. In the end, my answer is that some threshold must be identified, which can then be used as a barometer to measure what level of operational excellence has been achieved. Can everyone be operating at this level? Most likely not. True operational excellence is rare because it is difficult to do.

One way to better address this question is to establish a set of criterion as an evaluation metric. A company’s ability to score well on each attribute would suggest a high degree of operational excellence. Here are the criterion I would suggest:

 

  1. How collaborative is your enterprise? How well do you work together within departments as well as across plants? How easy is it to solicit feedback from peers in other regions, or from simply down the hall? Those organizations that have instilled a sense of ‘social’ in how they operate tend to deliver greater results, contributing to a higher achievement of operational excellence.
  2. What levels of process governance exist? This is a far-reaching topic, as it impacts not only regulatory and corporate compliance initiatives, but also to your firm’s ability to effectively implement Lean manufacturing, Six Sigma and other continuous improvement programs. If processes are inconsistent and improvement can’t be readily identified, improved and replicated across your organization, it will be difficult to truly achieve “excellence” status.
  3. How agile are you? This is another one of those terms that is often used but seldom specifically defined. I am referring to an organization’s ability to change quickly to new market opportunities, demand shifts, supply chain disruptions as well as simply the need to re-tool operations. How tough is this for you to accomplish? Does it take hours, or months? Based on what measure you use to accomplish change, you can then score yourself on how responsive your organization actually is.
  4. Do you have a culture of innovation? I know … another one of those vague terms. Here I am referring to not only an ability to consistently deliver new products to market that serve new needs, but also an organization’s ability to think creatively to solve business issues, such as resource constraints, economic down turns or labor shortages. Those that have a good track record of innovative thoughts and processes to address these challenges score well in this criterion.
  5. How well do you operate on a global scale? This factor encompasses a company’s ability to design, build, distribute and service anywhere. It is one thing to operate one plant and service one market. It is a completely different animal to do so effectively across locations, geographies, cultures and regulatory environments. Those organizations with a platform for manufacturing operations management that can track and trace materials, processes and resources on a global scale will be more readily capable of achieving a higher degree of operational excellence.

There you have it. My five criterion for operational excellence. For those engineers in the audience, you could apply a score of 1-5 for each of the above criterion. Then, if you score a 20 or higher, I would propose you are operating at a high degree of operational excellence, at least according to me! How well do you operate? What do you think of my criteria? I welcome your suggestions.

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Feb 13 2013

Why a Process-based Approach to Manufacturing and Quality Management Makes Sense

Categories:

Business Process Management, Manufacturing Operations Management, Quality, Quality Improvement

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February 13, 2013

Translation

Executives understand the value for adaptability and speed to effectively optimize processes across the value chain in a fast-paced and uncertain business environment. People, processes, and technologies must be aligned throughout engineering, manufacturing operations, quality, distribution, and service along with external suppliers and customers. Depending on your IT capabilities, though, mapping, executing, and optimizing end-to-end business processes can be a challenge.

Market leaders are meeting this challenge head on by leveraging emerging technologies such as quality management software and manufacturing operations management (MOM) software that is architected on a BPM platform and easily interoperates with ERP and other enterprise applications such as PLM or CRM. The below analysis addresses this issue more in depth, touching on challenges with mapping end-to-end processes and then diving into the benefits of implementing a BPM-based MOM platform.

Challenges with Mapping End-to-End Business Processes

Without the right tools, a considerable amount of custom IT work is needed to connect resources that traditionally don’t talk to one another. For instance, significant coding effort is typically needed to share data between ERP and MOM software. When dealing with a large enterprise that has tens or even hundreds of distributed facilities, where each may bring its own unique requirements, this challenge becomes even more significant.

In the above situation, standardizing business process across plants can become too costly and time consuming to even consider. However, executives recognize the value of business process standardization including lowering the risk of compliance, improved quality and flexibility to rapidly move production capacity. Consequently, organizations should start to consider the effectiveness of existing IT architecture and whether or not a rip and replace scenario is needed to meet these goals. With the right toolset, mapping end-to-end business processes can be a reality without ripping and replacing.

Connecting the Enterprise with a BPM-Based Software

By implementing a BPM for manufacturing or process-based MOM, EQMS, or ERP solution, manufacturing and industrial organizations can connect manufacturing and quality processes to one another as well as to the broader set of enterprise applications. Leveraging service-oriented architecture (SOA), these solutions create an environment for taking a workflow approach to mapping processes that’s more intuitive and less dependent on highly skilled technical resources.

There are many benefits that can be achieved by embracing a process-based approach to manufacturing operations and quality management, both from an IT and operational perspective. In my next post, I will go into detail on what those specific benefits are.

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