"What about running your business keeps you awake at night?"
We often ask this question at executive briefings and have found that manufacturing CxO's tend to have five major concerns:
- Profitably growing the business;
- Capitalizing (at least addressing) relevant markets in transition;
- Engaging customers with valuable innovation;
- Mitigating and managing risks inherent to a global manufacturing enterprise; and
- Governing across that enterprise with compliance and controllership.
While this may reveal no earth-shattering insights, responses to the insomnia question do inform our engagements with these manufacturing customers and in some cases, eventually lead to industry-leading transformative business practices by those companies. Below are a few examples of what I think are some industry best practices, based on my experiences with customers and industry executives.
Standardized Plant Architecture for Profitable Growth in Emerging Markets
Network and technology convergence between the enterprise and industrial premise is creating transformative opportunities to advance efficiency, quality, reliability, customer responsiveness, security and safety. Intelligent network architecture that interconnects business process and people with industrial machines, actuators, drives, sensors and controllers enables business improvements by keeping current a secure and scalable infrastructure with end-to-end, standardized access and workflows involving data, voice and video applications crossing enterprise and industrial domains. Knowledge and context are better disseminated for improved decision-making and business performance.
By standardizing plant architecture, companies are able to:
- Accelerate scale locally into the emerging economy with minimum startup
- Maintain (possibly improve) quality and brand standards using local production
- Leverage product and production expertise halfway across the world for improved ramp-up and operations
- Manage disparate plant systems, designs, and strategies across a globally diverse set of operations and without costly disruptions
For Coca Cola's Greenfield concentrate plants and for General Motors' engine-body-paint-assembly expansions in China, a global standard and reference architecture to converge IT and manufacturing networks evolved as the solution to controlling costs in the sprint to capture new Chinese customers. With standardized designs for industrial automation systems using a scalable IP-based communications blueprint, both Coca Cola and GM accelerated entry, improving quality, brand image and efficiencies. With a standards-based, unified network, IT and controls support resources are better leveraged, and plant assets are better optimized for energy consumption, lifecycle costs and cycle times. Operating efficiencies (OEE) and flexibility are simultaneously improved. Downtime at the new Chinese facilities is reduced by as much as 75 percent as compared with U.S.-based factories built on disparate networks. Returns on investment -- accelerated market share, ramp-up cost avoidance, and operational cost reductions -- in standardized, converged plant reference architecture have been estimated as greater than 150 percent.
Manufacturing Innovation includesNew Business Models
Research has shown that despite their efforts to implement global R&D centers of excellence, whose intent is to access the best talent from all pockets of the globe and to speed time to market by not letting the sun set on the development of new offers, few manufacturing companies are really achieving the benefits. Common challenges include:
- Collaboration across design centers and a mobile workforce;
- Communication and dissemination of tribal wisdom and knowledge currency;
- Consistent business process implemented globally, including consistent access to data and adoption of applications managing those data and workflows; and
- Controls on intellectual property that secure the crown jewels while allowing for the necessary information exchange across geographic and company boundaries.
The 300,000+ employee General Electric Company typifies a manufacturing enterprise with globally distributed R&D, engineering, production, customer application and servicing expertise. To reduce the engineering rework and longer cycles from the exchanges across geographic and enterprise borders that are part of the detailed design process for complex equipment like jet engines and medical devices, GE developed and widely scaled a purpose-built 'Virtual Collaboration Space' (VCS) that utilizes life-like TelePresence with unified communications, smart board and virtualized PLM application technologies. They have enabled virtual face-to-face collaboration between system and detail design engineers alongside multi-point shared electronic assets like CAD/PLM. GE claims payback on each VCS room is less than six months, based on rework reduction and engineering productivity returns alone. Having deployed over sixty such VCS rooms, GE is also speeding time to market and expanding access of their engineering expertise to customers and service technicians, by connecting to VCS rooms via mobile field devices. With this post-product-sale virtual customer engagement capability, GE is building new service models over the lifecycle of complex capital equipment -- improving customer satisfaction and yielding upside revenue streams.
Get Some Sleep, then Wake Up and Smell the Growth
Generally, executives know that network communications and collaboration technology can play an important role in driving innovation, growth and controllership, but to think it can have just the opposite effect of coffee?
Manufacturers are becoming much more than just producers of widgets. Like GE, machine builders are transforming their business with services throughout the asset lifecycle of their products, from conception to production to installation, upgrades and de-commissioning. Manufacturers are ultimately measured and paid on the service their product delivers, and technology is helping to unlock the best practice of the manufacturer as service provider, and creating tremendously profitable growth vehicles in the process. New revenue streams ... here's to sound sleep with new revenue dreams.