Evolving Enterprise - Summer 1998: Musings on the Millennium

VOLUME 1, NUMBER 2 | SUMMER 1998


	Holster your pistols, folks, there are no silver bullets. Instead, common sense, careful planning and willingness to change will determine which companies are left standing in the years ahead — and which ones will bite the dust.

by David Blanchard

With the 20th century rapidly drawing to a close, prognostications of what's in store for us in the next century are starting to appear everywhere you look. Part of it is due, no doubt, to the near proximity of the 21st century; a year from now, such predictions will be synonymous with "coming next year" analyses.

Be that as it may, manufacturers are only beginning to grapple with issues that will be of paramount concern to them in the opening years of the coming millennium. Year 2000 compliance, for instance, poses a very real threat to organizations of all shapes and sizes, and yet enterprise-wide implementations of Y2K-compliant solutions are few and far between. Everybody seems willing to wait for a magic box to miraculously appear at the last moment, when all evidence points to the contrary � that it will take a long-term, concerted effort to ensure Y2K compliance.

The same holds true, of course, for any other enterprise-wide effort: Anything worth doing is worth doing well, and that means eschewing a pie-in-the-sky longing for silver bullets in favor of knuckling under and taking the time to think a project through. With customer expectations ever increasing, and time-to-market cycles ever decreasing, it will take a lot more than wishful thinking to succeed in the new millennium.

According to Robert Burrows, CEO and president of Intrinsics International, the 21st century will be known as the "100-percent-on-time, now, period" era of manufacturing performance requirements. As Burrows observes, simply installing new software and throwing a switch won't solve any problems if there has been no inter-company planning along the supply chain. "Fresh approaches are required to provide maximum flexibility to meet customer requirements without investing large quantities of cash in inventory or operating at less than peak efficiency," he says.

Burrows was one of an impressive roster of speakers at the National Manufacturing Week Conference, held earlier this year in Chicago. Conference attendees whose minds were numbed by the dizzying array of vendor booths in the exhibition halls found a refreshing attitude of common-sense foresight and planning in many of the conference sessions. The message of the conference wasn't one of embracing innovation for innovation's sake; rather, manufacturers need to understand their own corporate culture, and then determine what solutions � and not necessarily hardware/software-based � will best deliver them safely to the 21st century.

To compete successfully in the coming years, Burrows listed six new approaches manufacturers should consider:

True integration � using not-yet-available collaborative planning techniques across the supply chain to identify points of true accountability between members.
A realistic mathematical definition of the service-to-inventory relationship.
Simulation modeling for all production, such that an overview approach replaces excruciating detail, and the rampant use of the 80/20 rule renders the planning process feasible.
Business gaming � to train and to fully involve all people making decisions along the supply chain.
Third-party inventory management.
A new insurance approach � this approach encourages "collaborative execution" among supply chain members inside a "local net."

A local net, as Burrows explains, is a combination of suppliers, manufacturers, distributors and customers working together to deliver a product using significant but definable amounts of capacity at each location. The local net is the key to enabling the fresh approaches outlined above, and the central player within the net is the manufacturer, the main value-added provider in the net.

Those manufacturers "who can harness the intellectual prowess of specialists, experienced in the collaborative planning arena, will have the greatest success" in the 21st century, Burrows believes.

Seven-days-a-week scheduling

Like Burrows, Richard Coleman, president of Coleman Consulting Group, envisions 21st century manufacturers competing as much with the knowledge of their own companies as they do with state-of-the-art systems. Coleman addresses the importance of capital and personnel deployment technology, but at the root of his scheduling paradigm is an idea that sounds more in tune with the 19th century than the 21st: a seven-days-a-week manufacturing schedule.

Coleman gives five reasons why 21st century manufacturers should go to a continuous schedule:

To defer capital expenditures.
To produce more with the current capital.
To consolidate the current capital.
To avoid costly start-ups and shut-downs that occur every weekend.
To reduce overtime pay for exhausted workers.

The key to successfully launching a 168-hour-a-week schedule is to communicate the business reasons to all employees. For instance, it is important that employees realize that improving competitiveness, and not reducing overtime, is the main reason for the changeover (in fact, as Coleman illustrates, overtime is actually increased in the new plan; the goal is to spread the overtime among several employees rather than overburdening a handful).

Who's in control?

The chief information officer (CIO) has been identified as one of the major role players in manufacturing environments, as it is the CIO who is ultimately responsible for all technological issues. Various technological strategies � virtual enterprises, supply chain management, electronic commerce, mass customization, outsourcing, etc. � are "driving the need for uniting all the computing systems in a manufacturing enterprise into a comprehensive IT structure focused on enhancing the competitive posture of a manufacturing corporation in its markets relative to its competitors," explains Eric Marks, strategic marketing manager, MES/enterprise solutions, with Schneider Automation/Square D.

According to Marks, the CIO of the new millennium will be responsible for IT, manufacturing and control systems, despite the fact that most are ill-prepared to manage the organization, the technology and the integration issues inherent in control systems. These CIOs will have to deal with both IT and control systems environments, and will be accountable for business success through IT deployment as well as manufacturing success through control systems management.

Acknowledging that this is a rather heavy load to drop on somebody's shoulders, Marks points out that the best strategy for success is to define "an overall information architecture that supports the business needs of a manufacturing enterprise." Part of this strategy includes the exploration of new technology, such as ERP systems, Internet/intranets, data warehousing, decision-support systems and others.

"Developing an information architecture will help eliminate the need for development, maintenance and support of custom interfaces between IT systems, manufacturing information systems and control systems," Marks observes. "This should facilitate better data management, smoother technology upgrades and system modifications, as well as driving lower IT support costs. Most importantly, this architecture must support the business strategies of the manufacturing enterprise. Should manufacturing or IT information needs change, the architecture will be able to accommodate them without developing custom interfaces or drivers to proprietary equipment."

The role of concurrent engineering

One of the emerging technologies that will play a central role in the upcoming years, particularly now that it has been effectively linked to the Internet, is concurrent engineering. In its original incarnation, dating back to the 1980s, concurrent engineering was conceived as a way to integrate product and process teams by physically collecting specialists from various disciplines in a single, interdisciplinary team. The idea hasn't really changed much, except that now, thanks to the World Wide Web, the members of this team do not have to be in the same location; indeed, they can be (and often are) spread across the globe.

A panel discussion on concurrent engineering at National Manufacturing Week '98 disclosed such benefits for this approach: reduction in development time and cycle time; reduction in costs; fewer total resources used; higher quality of designs; and improved concept development. However, as with all approaches that show promise of ratcheting the status quo up a notch, concurrent engineering is not necessarily the be-all and end-all of paradigm shifts.

One unfulfilled expectation, according to Subhajit Chatterjee, a member of the technical staff at Bell Labs/Lucent Technologies, is that "once concurrent engineering is started and practiced, all organizational barriers will disappear. This cannot be realistically achieved unless and until the entire organization is aligned with a common strategy." It is quite possible that design, manufacturing, installation and other departments can be integrated, and yet have the entire project undermined by corporate politics, Chatterjee notes. Furthermore, while "concurrent engineering has the potential for reducing cycle times, it cannot rectify project lateness due to poor management."

Jimmy McCoy, systems development manager with Abbott Laboratories, notes that expectations were not met in such areas as simulation and analysis, and CAD/CAE. "After depending heavily upon simulation and analysis to reduce prototyping, it was quite a surprise to find areas where simulation and analysis did not work as well as expected," he says. It is therefore important, McCoy stresses, to understand the limitations of key tools in the process before depending heavily upon them.

Similarly, McCoy observes that "CAD/CAE systems exhibit limitations which often are not obvious at the start and result in unmet expectations." Also, when dealing with new technology, discretion needs to be exercised in the planning of tasks, i.e., more time needs to be factored in for new technology than for "follow-on" products.

Looking into the future, Richard Obermayer, an engineering supervisor with Ford Motor Co., predicts the formation of "virtual corporations that bring together groups of small companies for the purpose of developing new products," in effect expanding the concurrent engineering concept to a larger scale while achieving the same benefits. McCoy envisions the embedding of knowledge and experience into artificially intelligent expert systems, which would allow less experienced engineers to accomplish concurrent design. And Chatterjee notes that the application of virtual reality into various areas � assembly planning, product and process integration, etc. � as well as the continued development of Internet-based tools, will promote and increase the effectiveness of concurrent engineering.

Nothing exceeds like excess

Ultimately, is there any single strategy most likely to carry a manufacturing organization into the next millennium? Yes, according to Gary Landis, president of G.A. Landis Associates, although this strategy does not depend upon commercial hardware or software implementations, nor is it something a consultant can set up for you. Briefly, the strategy is to exceed customer expectations. Why is it that the simplest strategies are usually the toughest to pull off?

Landis explains that an important area for exceeding expectation is to design for service or manufacturing operations. "Having this technical expertise makes two important commercial contributions," he notes. "One, it permits an organization to design a more perfect solution to the market needs. Second, a high degree of technical expertise occurs along with well-developed R&D; and marketing department interfaces."

Landis offers a list of performance metrics that can help a manufacturer gauge their levels of customer expectations:

Customer feedback.
Dealing with wait time.
Evaluate and document returns and rework.
Perform failure analysis.
Collect yield and defect rates.
Evaluate engineering change orders.
Determine field service activity.

If you can learn what your customers' expectations are in terms of your products, performance and service, and then exceed these expectations, you'll not only have satisfied customers but customers who return to you again and again. To accomplish this, Landis urges, design and build quality into your products. Landis' final suggestion serves equally well as a summary for the entire conference: Those companies that maintain an open mind, seek opportunities, and are not afraid to change will be the winners of the 21st century.

David Blanchard is the senior editor of Evolving Enterprise.

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