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How Wall Street Evolved The e-Manufacturing Mindset

By streamlining internal processes and leveraging technologies like the Internet, a company can be better, faster, and cheaper than the competition -- and maintain the confidence of Wall Street pundits and investors.

Once upon a time, the plant floor was isolated from the rest of the enterprise -- operating autonomously and out of sight from the rest of the company and, in particular, from the scrutiny of a company's shareholders.

No more. Plant floor, meet Wall Street.

Companies today -- including old-line manufacturers -- are driven by shareholders and financial analysts to improve bottom-line performance. Market validations, like meeting or exceeding earnings forecasts and the return on net assets, are the hair-triggers that, if met, can send company stock soaring - or tank it by double digits.

For today's manufacturing company, what matters most is not only growing sales. It's how efficiently a company can operate as an organization. And chief financial officers have found the religion of operational excellence. Whether it's Lean, Six Sigma, or any variety of homegrown initiative, successful companies today leave no stone unturned to squeeze the excess. By cutting the "fat," streamlining internal processes, and leveraging technologies like the Internet, a company can overall be better, faster, and cheaper than the competition -- and maintain the confidence of Wall Street pundits and investors.

Traditionally, the plant was the life-blood of every manufacturing enterprise, the place where value was created. Of course this remains the case today, even in this world of crazy "dot-com" valuations. But as industries consolidate and restructure, some companies are choosing to remain as the producers of goods while others are positioning themselves downstream in the supply chain to be the marketers of those same goods. In almost every industry, tightly integrated supply chain models, such as those popularized by Dell Computer and its extensive web of suppliers, are emerging. In these new models, connection of the plant floor to the broader supply chain is essential, and information access is more critical than ever. The Internet and e-commerce have simply accelerated this trend.

The borders are lifting within the enterprise -- all areas from planning to logistics fall under scrutiny for cost savings. And while companies scramble to meet consumer demands for e-commerce channels, manufacturers are finding themselves in, at times, uncharted waters - trying to make sense of the maintenance, repair, and operations organization, and understanding the true capacity of the plant floor, as well as how to make it more efficient.

The days are gone when the plant operated autonomously from the overall enterprise. With good reason. We've all heard the adage, "Knowledge is power." How true for today's manufacturer. In fact, the most strategic advantage of any organization today is information - even more so, the right data to help make informed business decisions. Whether the challenge is faster time-to-market, improved process yield, non-stop operations or tighter supply-chain coupling, information is the key.

The plant floor is the starting point for greater information connectivity. Computer-based plant-floor controls for manufacturing machinery, material handling systems and related equipment generate a wealth of information about productivity, product design, quality and delivery. And a contemporary automation architecture is the key to unleashing this information in a cost-effective manner.

But this is only where the plant-floor possibilities begin. A company today can now have a single, complete set of operational capabilities including rapid plant design and deployment, real-time ERP connectivity, comprehensive asset management (of people, products, and processes), and a seamless coupling to the entire supply chain via the Web. That's what e-manufacturing really is.

The industry has made e-manufacturing the "buzz du jour" to define everything from simple Web servers on the plant floor to extensive supply chain strategies. But what the market has yet to do is help manufacturers understand what e-manufacturing really is -- a concept much greater than the sum of its parts - or how to deploy it in a practical, incremental manner.

Here is a popular, basic definition: "The core of [an] e-manufacturing strategy is the technology roadmap for information transparency between the customer, manufacturing operations, and suppliers. An e-manufacturing strategy takes e-business processes, such as build-to-order or reliability-centered maintenance and generates guidelines for implementing plant systems. The e-manufacturing strategy takes the e-business and manufacturing strategies and creates a roadmap for system development and implementation in the plant." (AMR Research, August 2000).

So what qualifies an automation supplier to provide such a guide to e-manufacturing? We know from experience that four key competencies are required for an e-manufacturing strategy: an integrated plant-floor automation architecture; seamless connections to the enterprise systems enabled through software and services; comprehensive asset management and reliability-centered maintenance; and tailored e-business strategies for supply-chain efficiencies.

Why should you be interested in e-manufacturing? Over the past several months, we've studied the musings and writings of industry-leading analysts and media who have shared their viewpoints on where manufacturing is headed. All agree that the e-manufacturing term is much like the phrase, "e-business." One day, the "e" will be so common it's no longer needed. It will be manufacturing as usual.

If you're a plant manager or engineer, understanding the true meaning of

e-manufacturing can help you understand how your highly sophisticated control systems can seamlessly connect with the rest of the enterprise - helping you lower costs, increase efficiencies and productivity, and ensure the highest quality for your produced goods.

If you're a manufacturing manager, knowing more about e-manufacturing will give you a clearer direction about bringing the benefits of the Internet to your operations for transparency, responsiveness and efficiencies, regardless of the number of facilities you have around the world.

If you're a CFO or IT manager, e-manufacturing insights will help you understand the wealth and opportunities you can unlock within your plant floor operations. And how today's information enabled automation technology easily connects with the rest of your enterprise - sharing data anywhere in the world that helps you make more informed business decisions.

And, if you're an investor, e-manufacturing awareness will help you better realize the fascinating strategies leading manufacturers are implementing to squeeze excess, expand global reach, and bring more to the bottom line.

The best news for manufacturers today is what e-manufacturing is not. One, it's not an all-or-nothing proposition. Second, it's not something that requires a complete redesign of a plant floor. Chances are, any manufacturer today - regardless of size - has certain elements in place for a good starting point. Bottom-line, it's a way of thinking about deriving operational excellence out of an organization, and leveraging the Internet to achieve results. And regardless of where an organization begins on the road to an e-manufacturing strategy - be it through the supply chain, plant-floor integration or asset management - Making Sense of e-Manufacturing will serve as a definitive guide.

Plant floor, meet the world. The future for manufacturing has never been more exciting.

To view the entire Rockwell Automation e-manufacturing white paper, visit

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