The electronics manufacturing giant, Celestica Inc., of Toronto, Ontario, Canada, has instituted a wide range of
collaboration
activities to communicate across its 45 plants in Asia, Eastern Europe,
Mexico and Canada. The company also collaborates with suppliers and
customers to share production data and manage inventory.

Increased regulation in the electronics industry is forcing even greater collaboration, as manufacturers grapple with the demand of European Union directives such as the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) and the Restriction of Hazardous Substances (RoHS) directives. REACH and RoHS require companies to declare the substance content of their products. That means they have to manage material data from hundreds—sometimes thousands—of suppliers.

Without sophisticated collaboration, both internally and externally, managing REACH and RoHS compliance would simply be impossible. “The way we meet RoHS and REACH requirements is to control the data that comes into the plants,” says Harvinder Sembhi, vice president of supply chain strategy and planning at Celestica. “We have a centralized team in Malaysia, and we use a certain instance of the truth for each product. That one version of the truth is visible to all of the plants building the product.”

Visible data

Celestica also collaborates with customers to share data on production forecasts, purchase orders and inventory. “We do it through our front-end portals, or we can populate our customers’ internal systems,” says Sembhi. “What we shipped yesterday is available on the Web site. Some of our customers also want to see real-time quality data.” That data can also get published to Celestica’s customer portal or sent to the customers’ systems. The real-time data is also integrated with Celestica’s enterprise resource planning (ERP) system.

Celestica recently started to use a third-party collaboration tool. “We took collaboration to the next level with SmartOps to help manage inventory,” says Sembhi. “We want to have the supply there when the order arrives, so we use SmartOps to look at customer demand to see if the customer is over the forecast or under the forecast.”

The SmartOps tools, provided by Pittsburgh-based SmartOps Corp., give Celestica a view of the customer’s demand and inventory allocation. “This gives us multi-stage inventory optimization,” says Sembhi. “We can look at the customer’s supply chain and determine the most appropriate place to put the inventory.” He notes that the visibility provided by the tool helps Celestica position the inventory at the lowest cost possible while still meeting production requirements. “Collaboration across various plants allows us to stock less inventory,” says Sembhi. “You create intelligence so you can fill the order with the lowest amount of inventory.”

Collaboration used to be an efficiency luxury, affordable only for large manufacturers, but in recent years, it has become a necessity for large and small companies alike. Plant control engineers have to collaborate with maintenance and information technology (IT). Plants have to collaborate with other plants across the globe to share production data and inventory levels. Collaborative tools are also being used as part of best practices designed to increase efficiency and enterprise profitability. Companies are also collaborating across the supply chain, especially as they face demanding regulation to trace and track in the pharmaceutical, and food and beverage industries, or to report chemical content in the electronics and chemical industries.

Some companies are using internal applications to facilitate collaboration. ERP vendors such as Oracle and SAP have developed collaborative tools, and control system vendors are also integrating plant systems with ERP and manufacturing execution system (MES) applications for sharing data. Many manufacturers such as Celestica are also using external third-party platforms for specific collaborative work in design or inventory control.

Why collaborate?

The reasons for collaborating are numerous. Plants are sharing data internally to become more efficient in production and inventory. They’re sharing data externally to optimize inventory and meet compliance demands. “We are now seeing that the walls between maintenance and operations, or IT and manufacturing, are starting to come down,” says Marc Leroux, manager of collaborative production management at ABB Inc., in Norwalk, Conn. “Externally, the relationship with suppliers and customers is being extended to include operational transparency, with each state of the supply chain having the visibility into stages before and after their own.”

Collaborating externally can cause friction between trading partners. “Let’s suppose you’re P&G (Procter & Gamble) and you’re buying additives and chemicals, and you have to put allergen information on your label,” says Alison Smith, research director at AMR Research Inc., in Boston. “You can’t just say it’s red dye number 4. Yet the additive company ...