To Change Performance, Change Your Thinking

April 9, 2008
In order to improve your manufacturing performance, you should put in a manufacturing execution system (MES) system and integrate to your enterprise resource planning (ERP)—right?
Not necessarily. Many manufacturers tell ARC that they are investing in manufacturing software because they want their plants to be more flexible, more responsive and more aligned with their dynamic business and supply chain needs. We find this usually requires a different approach from the one articulated above—it needs an approach that begins with a much broader perspective on Operations Management.To manage manufacturing operations in harmony with business and supply chain needs, manufacturers need to reexamine their conventional thinking about manufacturing software and technology. They need to explore what it will take to adopt a cross-functional approach to the management of the people, business processes, technology and capital assets involved in all aspects of manufacturing operations, including: procuring and receiving raw materials and components; implementing product designs, specifications, formulations or recipes; distributing these products to customers; and supporting the products through their end of life.The software and technology brought to bear on key Operations Management issues, which we refer to as Operations Management Systems, are not necessarily monolithic or supplied by a single vendor. Frequently, the best answer will be comprised of an integrated set of services or applications. Operations Management Systems typically include Operations information technology (IT) Infrastructure, connectivity to external systems and the functionality needed to support most or all of the Operations Management requirements. In practice, this often means leveraging existing applications where appropriate. Increasingly, manufacturers need these applications, as well as others, to work together in order to provide the agile, responsive, information-rich environment that can act in synchrony with the needs of the enterprise. Modern solutions enable manufacturers to create (or license) composite applications that provide new, tailored functionality on top of that provided in existing applications.Operations Management systems enable distributed manufacturing operations to gather and analyze the data needed to make effective decisions. However, OM goes beyond providing visibility and corporate decision support. In principle, it services all operational functions of a distributed manufacturing company, unifying the various dimensions of manufacturing that intersect at the plant floor, including value chain, product lifecycle and asset lifecycle.An OM infrastructure may also provide a set of common services that support all applications in the environment. Examples are security, diagnostics, audit, directory, live data provision, activation, alarms and events, and high availability. The Infrastructure typically provides an application platform, a workflow engine, a portal and change management tools. Many of the needs discussed here—enterprise-wide integration, interoperability and flexibility (business agility), and the like—provide ample reason for taking a serious look at service-oriented architecture, or SOA, approaches.Think broadly
ARC recommends that companies take a comprehensive view of manufacturing operations. When thinking about new software and technology solutions, focus on the Operations Management IT Infrastructure early in the process. Companies should consider the multiple roles of OM IT Infrastructure when thinking about improving manufacturing performance. OM IT Infrastructure can knit together all key applications to act in concert and improve performance and responsiveness within manufacturing operations. And companies should also take a fresh look at all key existing applications with an eye toward how they might work together in order to provide the agile, responsive, information-rich environment that can act in synchrony with the needs of the enterprise. Greg Gorbach, [email protected], is Vice President of Collaborative Manufacturing at ARC Advisory Group Inc., in Dedham, Mass

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