The real truth about the virtual factory
Manufacturers find all-electronic transfer of product data is a worthy, yet elusive, goal
By Sidney Hill Jr., executive editor -- Manufacturing Business Technology, 9/1/2002 6:00:00 AM
Depending on when you started counting, we are either two or three years into the 21st century. We also are, depending on your perspective, either very close to or far away from the age of the virtual factory.
Manufacturers clearly have embraced the virtual business model. They routinely farm out production to satellite plants and contract manufacturers dispersed around the globe while doing most of their product design work at home. But just how automated are the processes that run these distributed operations? The answer, in almost all cases, is not as automated as the manufacturer would like.
From a pure technology standpoint, it is possible to build networks that enable design engineers, upon completing a product, to automatically trigger all of the downstream activities—including identifying the components, laying out the production lines, and defining the manufacturing steps—that are required to build that product. In fact, software vendors have begun developing packaged applications to automate this set of activities, which some industry experts have dubbed manufacturing process management—or MPM. But there is a multitude of reasons why few, if any, companies have created such networks.
Marc Halpern, a research director with Gartner, the information technology research and consulting firm based in Stamford, Conn., sees MPM as a subset of a broader manufacturing discipline known as product life-cycle management—or PLM. Consequently, he says, companies seeking to adopt MPM run into many of the same issues that are associated with the practice of PLM, starting with the need to integrate multiple systems that perform very different functions.
A multistage process
In general terms, PLM is the handling of product data from the beginning to the end of a product's life, which by definition is a multistage process. The first stage is converting an engineering bill of material (BOM) into a manufacturing BOM. The engineering BOM lists the types of components that will make up a product, while the manufacturing BOM identifies components more directly—e.g., by a specific supplier's part number.
Halpern calls this stage of PLM product data management—or PDM. He says it requires integrating a product data repository, or PDM vault, with an enterprise resources planning (ERP) system so that the data in the manufacturing BOM can be used to support such activities as inventory management and production planning. The next stage of PDM is passing the information about how to build the product to the shop floor, at which point Halpern says, "you are talking about MPM."
Halpern credits Tecnomatix, a software vendor based in Nashua, N.H., with coining the term manufacturing process management. Amir Livne, a Tecnomatix vice president, says the term describes the set of processes that are managed by the Tecnomatix eMPower software suite.
Manufacturing engineers use eMPower to analyze data that is extracted from a PDM system to determine the exact steps that should be taken to build a product. That analysis results in the creation of what Tecnomatix calls an electronic bill of process—or eBOP.
"The eBOP contains information about the product's structure, which typically comes from the PDM system," Livne explains. "But it also contains information about the resources in the plant where that product will be built, along with the operations—including production processes and routes—that will be used to build a particular product in a particular plant."
Once an eBOP is created, a company can use eMPower's workflow engine to hold collaborative review sessions in which individuals from multiple departments—as well as subcontract manufacturers, customers, and suppliers—can see the proposed manufacturing process simultaneously and make suggestions on how it can be improved. The system also offers the capability of running both statistical and graphical simulations of production processes before actual production begins.
Shrinks development costs
Livne claims that eMPower users typically cut their product development time as much as 30 percent while also shaving 20 percent off their product development costs. He says BMW, the German auto manufacturer, uses the eMPower suite as the primary tool to support a formal product review program known as Process Week. "These reviews take place at various stages of the product development cycle," Livne says. "Essentially, they bring all of the people involved in developing sections of a production line into a room to look at the content of the eBOP projected on the wall. This gives manufacturing people a chance to introduce changes that might make the car easier to build, and it can happen a full year before the car goes into production."
General Motors has taken the collaborative process a step further, according to Livne, by installing servers housing eMPower in the plants of the subcontractors that design and build some of GM's production lines. With this arrangement, Livne says, GM's primary supplier can break up an eBOP and send the pieces to lower-tier suppliers that will work on parts of the job, with GM retaining the ability, through a Tecnomatix Web server, to collaborate with all suppliers involved on a particular project.
Halpern sees the value in MPM applications, but points out that it is extremely sophisticated and expensive technology that not all companies can use. "If you are a small manufacturer and your production process involves mixing chemicals in three different vats and filling bottles, it's ludicrous to even think about spending the time and money to run software simulations." You have to do a cost-benefit analysis to determine if this stuff is right for you," says Halpern.
"MPM is not for everyone," concedes Conrad Leiva, director of business development for iBaset, an MPM software vendor based in Lake Forest, Calif. "We target companies in aerospace and defense, and other industries with heavily engineered products, such as medical devices or nuclear equipment. These companies need access to engineering data while they are building their products."
PDM-to-ERP integration
Halpern says most companies use simple connections between PDM and ERP to pass data from engineering to manufacturing, but even that process can be difficult to fully automate, primarily because of integration issues. "There are pre-packaged interfaces to support [PDM-to-ERP] integration," Halpern says. "But users often find that they don't work properly, and they usually require a fair amount of customization."
Amkor Technology, a contract manufacturer of semiconductors and other microelectronics based in West Chester, Pa., solved that problem by relying on a systems integrator that specializes in connecting its PDM and ERP systems. Amkor purchased its ERP system from Oracle Corp., Redwood Shores, Calif. Its PDM application is from Agile Software, San Jose, Calif. The systems integrator, Sierra Atlantic, Fremont, Calif., has developed a software package, called SCMnet, that automates the process of moving data between the Oracle and Agile applications.
Amkor, which operates close to 20 plants around the world, used SCMnet to create an all-electronic process for receiving product design data from its customers and parceling that data out to the appropriate areas—including purchasing and manufacturing—within its own enterprise. "It took a little more than two weeks to implement this system, including the time we spent customizing the adapters for our particular needs," says Keith Rust, Amkor's manager of business technology consulting. Rust also points out, however, that this process is confined to a new business unit that Amkor recently launched to build computer chips based on a new packaging technique. The rest of Amkor is still passing around a fair amount of paper.
Just flip the switch
Amkor works with its customers to design products in various computer-aided design (CAD) systems. In the new business unit, a completed design is passed to the Agile application, which generates a BOM and stores it in a PDM vault. "The engineering and manufacturing BOMs are actually the same," Rust says. "We simply flip a switch to change the BOM's status when it is time to release it to production."
Before that switch is flipped, however, Amkor uses Agile's workflow engine to circulate the BOM throughout the company for the necessary approvals. After that, SCMnet kicks in, taking what is now a manufacturing BOM and converting it to a format that Oracle's production planning module can understand. SCMnet also contains a filtering application that ensures that the BOM goes only to the plants that Amkor has assigned to build that product.
Rust says Amkor has not used this system long enough to assess its economic impact on the business, "but we know it has made our processes faster, and it is much easier to use than the systems in the rest of the business, because it is all electronic."
Waters Corp., a Milford, Mass.-based manufacturer of analytical instrumentation for the pharmaceutical and biotechnology industries, has side-stepped some integration issues by purchasing its PDM application from its ERP supplier, SAP, Walldorf, Germany. But Waters still finds that it is a long road to a fully automated engineering-to-production network.
"This is a three- to five-year process," says Wayne Boyd, Waters' manager of engineering services, who is overseeing the construction of an all-electronic system for passing data related to both new and revised products from engineering to manufacturing. "We see this as a PLM project," Boyd adds. "The PDM system is the foundation for this effort, but it is only one aspect of PLM."
Workflow is critical
A year into the project, Waters can automatically convert an engineering BOM into a production BOM and pass it to the manufacturing floor. But getting the necessary signatures to authorize that conversion still is a manual process.
"We have not installed a workflow system yet," Boyd says, "so the appropriate forms are carried around for signatures before they can be handed off to the person who is responsible for making sure all the items listed in the BOM are in place in time for production."
Even with a workflow system in place, which should happen later in the year, Waters will not be operating in true virtual mode. "We do mechanical, electrical, chemical, and software engineering to create our products," Boyd says. "So far, we have focused only on the automatic transfer of mechanical data. We will tackle the other forms of data as we continue our system development." And Boyd believes the ultimate success of that development lies in having seamless integration between PDM and ERP.
"Our previous PDM system had an interface for integrating with SAP, but the data had to be transferred in batch mode, and it required a lengthy conversion process," Boyd says. "And the information could only be moved in one direction. Any changes made in one system would have to be entered into the second system manually. We found that people were bypassing that process altogether and instead printing PDM files or exporting them to a Microsoft Excel spreadsheet and either typing or importing them into SAP. That was taking a lot of extra time. The data was old by the time it got into SAP, and the information in the two systems was never in-sync."
Boyd says Waters ultimately wants to create that elusive virtual factory in which all of its information breezes from engineering to manufacturing electronically. "But we first have to establish a good foundation for making that happen. That is what we are doing now with PDM.
"Until you have a good foundation, including the right business rules, for managing your information," Boyd concludes, "you really have no way of judging the value of pumping that information around at the speed of light."
| Who's inside | ||
| Agile Software: www.agile.com | iBASEt: www.ibaset.com | Oracle: www.oracle.com |
| SAP: www.sap.com | Sierra Atlantic: www.sierraatlantic.com | Tecnomatix: www.tecnomatix.com |
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