When closeness counts
Flash Electronics and others succeed by working more intimately with partners
By Alex Anderson, contributing editor -- Manufacturing Business Technology, 2/1/2003 12:00:00 AM
Collaborative manufacturing is defined by the Manufacturing Enterprise Solutions Association as a strategy by which all appropriate individuals—both internally and externally—work together to better support business processes using real-time information to integrate design, planning, production, and delivery. Within this concept, traditionally plant-oriented applications such as manufacturing execution, enterprise manufacturing intelligence, supervisory control, and enterprise asset management systems play an important role. However, these applications have become more Web-based and externally focused than before, and other solutions outside the traditional boundaries of plant operations software—such as planning, enterprise, or product definition management systems—support collaborative manufacturing.
Prior to adopting a collaborative business model, Flash Electronics—a Fremont, Calif.-based contract electronics manufacturer—was running into all kinds of difficulties interacting with customers.
"Our previous system was archaic. We were getting very poor ratings from our customers in their service evaluations because we weren't talking to them," says Chuck Word, quality control manager. Today Flash pulls real-time quality information off the plant floor through Advantage, a Web-based solution from San Jose, Calif.-based Datasweep.
The data can then be shared both cross-departmentally within the enterprise, and across corporate boundaries. In fact, says Word, Flash provides weekly reports to about 25 customers on what's happening with their orders on the shop floor, and can generate daily reports when required—a key element in improved customer satisfaction.
Advantage's manufacturing execution functions also help prevent problems in the first place. Says Word, "Profit margins are so thin that you have to get it right the first time. If we don't address things immediately here, we lose money. So problems are hunted down and dealt with immediately—usually within an hour."
For example, the software enabled the company to implement a line-stop process to ensure that every manufactured component passes every quality step before it's shipped to customers. Such integration between the plant floor and the quality control and shipping departments has allowed Flash to give its customers detailed on-line access to product genealogy and tracking information.
Flash's deployment is but one example of collaborative manufacturing, an over-arching concept that takes in all manner of systems that help manufacturers work more intimately with partners. While different market research firms have different definitions and terminology regarding this broad area, most agree that it is a necessary element in supply chain management.
Why now?
The upside credited to collaborative manufacturing processes is impressive, including, but not limited to: lower inventory, lower production costs, shorter cycle times, a greater ability to manage product customization, and more agility in shifting work between plants or in response to shifts in demand. How these benefits are gained, and via what software applications, is a trickier question.
The short answer is that a range of applications are involved in collaborative manufacturing, including manufacturing execution systems, plant portals and plant intelligence solutions, quality management systems, production scheduling solutions, supervisory control software, and a host of other capabilities.
"We're seeing more demand from manufacturers for collaborative manufacturing methodologies," says Greg Gorbach, a research director with Dedham, Mass.-based analyst firm ARC Advisory Group. "Sometimes it's explicit, and sometimes it's implicit—in that they are trying to solve problems [that are best addressed through collaboration], and are trying to figure out how to organize it, and tie it all together."
Considering the broad footprint of applications that are encompassed by the "collaboration" moniker, it is very difficult to assess the growth rate. "It's a complex process with a lot of different things going on, especially when you start thinking about multisite manufacturing that involves major geographic changes," says Gorbach.
According to Gorbach, collaborative manufacturing calls for business process integration, not just data integration. "There is a technology component. It's proven and it's available, so it's definitely not beyond the reach of most manufacturers."
However, Gorbach doesn't advise rushing out and buying a big collaboration system. Instead, he suggests establishing a service-based infrastructure for collaboration that entails capabilities including security management, role management, business process management, and integration—and then implementing functional applications as needed.
Sometimes collaborative manufacturing is supported by applications and middleware that enhance the movement of execution-related data into an enterprise resources planning (ERP) system. Such was the path taken by Halliburton Energy Services following a corporatewide implementation of ERP software from Walldorf, Germany-based SAP that replaced 22 years worth of legacy systems.
Based in Houston, Halliburton is one of the world's largest providers of equipment to the oil & gas industry. Halliburton manufactures and maintains everything from the high-tech electronic equipment used for analyzing rock formations, to specialized pipes and fittings used to drill wells.
According to Phil Defilippo, Halliburton's IT manager, after deploying the ERP system, the company still needed to improve inventory accuracy in the warehouse, which stood at less than 80 percent. "That meant that we had a one-in-five chance of being wrong whenever we went looking for a part. There was a lot of paper—handwritten notes. Data integrity was on a downhill slide, and if you can't find the raw materials or finished goods, then your delivery schedule goes awry."
To solve these problems, Halliburton deployed a wireless bar code data collection system from Intermec, Everett, Wash., and a middleware package from Acsis, Marlton, N.J. "The information collected by the system can be shared cross-departmentally, and with customers," says Defilippo. "Logistics planners, material buyers, and customer service people can all take advantage of the information for functional improvement."
The benefits Defilippo has seen have been significant. "Our data integrity has gone from the low 80's to 93-percent accuracy. We're processing orders faster now because we have a better idea where everything is. We're also more organized. There isn't confusion in the factory because people aren't looking for things. They know where it is. This has led to a 10-percent increase in on-time delivery to the customer, which has improved customer satisfaction."
According to Lou Unkeless, a Datasweep vice president, collaborative manufacturing traces its genesis to the economic boom of the late 1990s. "At that time, we had a fast economy with manufacturers trying to deal with raw materials shortages and lack of capacity to meet demand. Manufacturers were buying capacity as fast as they could and outsourcing to contract manufacturers. As you outsource you need to have some vehicle for working with your partners—whether it be on design, performance, or whatever."
Though the boom has faded into bust and manufacturers no longer face those shortages, the value of collaborative business practices lives on, says Unkeless. "Instead of thinking about top-line revenue, [manufacturers] are now focused on getting their cost structures in line with new demand levels so they can continue to be profitable. People are focusing on basic issues, such as reducing costs and maintaining a high level of product quality."
Regardless of the economy, says Unkeless, more manufacturers are outsourcing and dealing with partners more intimately than they did in the past. "So they still need to be able to share information to collaborate, he says."
Paul Donnelly, director of marketing for Viewlocity, agrees. The Atlanta-based company has roots in supply chain event management and integration software, but via its merger with SynQuest, which had roots in production-planning applications, the company—now known as Viewlocity—offers software that encompasses many of the capabilities needed in collaborative manufacturing.
"Our salespeople are seeing a ton of interest from companies that outsource manufacturing and don't have visibility into the process and the status of the orders that are being built by those manufacturers," says Donnelly. "If you're going to exert any control across the supply chain, you have to know what's going on."
That means the systems have to be able to talk to each other—a factor that might prove to be the biggest speed bump to the adoption of collaborative manufacturing. According to Paul LeMert, director of programs and strategic marketing for Invensys' Manufacturing Solutions group, York, Pa., the key element of collaboration is interoperability. London-based Invensys offers a wide range of software that supports collaborative manufacturing, including industrial automation software from Wonderware, an Invensys company based in Lake Forest, Calif.
While Invensys as a whole is adopting an integration and plant automation framework called ArchestrA, the Manufacturing Solutions group last fall released a product called Production Engine, a software engine that offers users the ability to manage manufacturing operations, materials, and orders through graphically configured workflows.
"Interoperability is integration and flexibility," says LeMert. "A company can tie these things together, and each application talks to a central engine. Now the user only has to work with one interface. It provides a more centralized way of dealing with plant-floor operations. It becomes a central point of communications within the plant and to outside partners. You don't want all kinds of different applications trying to talk to each other in the next plant, or across a fleet of plants."
Many choices
Other software vendors that offer manufacturing execution software have taken similar interest in connectivity. For example, Campbell, Calif.-based Camstar's Virtual Factory is a suite of collaborative functions that serve to connect multiple plants in an enterprise, and synchronize updates between execution systems. Meanwhile, Robesonia, Pa.-based CIMNET uses an eXtensible markup language-based "data conduit" and component-based software to support integration for its Factelligence manufacturing execution suite.
Even with more vendors introducing capabilities that support collaborative manufacturing, enterprises still face the challenge of matching up specific business problems with appropriate applications. For instance, at Flash Electronics, Datasweep's solution has brought gains in areas such as quality assurance.
"Datasweep gave us a great return-on-investment," says Word. "It has touched us in a very broad way—identifying assembly and training issues, and reducing the chance of error throughout the process."
Flash's new collaborative processes also have led to expansion of the business and new customer wins. Instead of just supplying printed circuit boards, Flash has become a fulfillment house—doing everything from production, to assembly, to shipping to the customers' customer. Ultimately, Flash hasn't just implemented software—it has adopted a collaborative manufacturing business model.
| Collaborative Manufacturing* | ||
| ABB | Apriso | Aspen Technology |
| Camstar Systems | CIMLINC | CIMNET |
| Citect (formerly Ci Technologies) | Cubicorp | Datasweep |
| divine/OnTrack (formerly RWT) | Emerson Process Management | Executive Manufacturing Technologies |
| FactorySoft | FASTech Integration | GE Fanuc Automation |
| Global Factory | Honeywell Industry Solutions | iBASEt |
| IBSS | ICONICS | IndX Software Corp. |
| InStep Software | Intellution | Intercim |
| Invensys Production Management | iTAC Software | Kronos |
| LECAN Group | Lighthammer | Motorola GSG |
| Mountain Systems | Opto 22 | OSIsoft |
| Rockwell Software | Siemens Energy & Automation | Stochos |
| Tecnomatix Technologies | Teradyne | USDATA Corp. |
| VIA Information Tools | Werum | Wonderware |
| *Includes vendors of manufacturing execution systems, supervisory control, plant historian, and plant portal software. | ||
| For more info, visit: www.manufacturingsystems.com/software_finder | ||
