Collaborative Manufacturing Management in the Supply Network

May 1, 2005
The need for coordinating distributed manufacturing operations is greater than ever. Whether driven by the disappearance of inventory buffers as supply chain improvements kick in, because acquisitions need to be brought into the fold, or because of global expansion and competition, manufacturers are increasingly seeking solutions to the problem of managing distributed or networked operations.

Manufacturers are feeling pressure today for a number of reasons. As supply chain improvements wring buffer inventory out of the supply chain, manufacturing is increasingly on the critical path to customer satisfaction. In order to perform, operations personnel must see all relevant demand information in time for efficient response. Enterprise level systems and managers need manufacturing data in real time. Regulatory compliance requires documented, reliable processes. Lack of collaboration across organizational and business boundaries can lead to redundancy and higher costs.

Meanwhile, performance expectations are higher and companies are recognizing that in order to improve, they must understand and often automate their cross-functional business processes.

Collaborative Manufacturing Management (CMM) is the practice of managing the key business and manufacturing processes of a manufacturing enterprise within a collaborative value network. CMM builds upon a collaborative infrastructure, business process management services and real-time strategic business management tools. It leverages critical applications, production systems and enterprise information, to maximize the responsiveness, flexibility and profitability of the manufacturing enterprise. For many manufacturers, especially larger distributed or global operations, there is a critical need to explicitly consider some of the process and information flows at the network level.

An analysis of the collaborative value network must first establish the topology—how the individual nodes connect to each other—as well as the specific relationships among the nodes. Nodes include every entity in an enterprise’s supply chain—plants, distribution, contract manufacturers and suppliers. A contract manufacturer will have a different business relationship than an enterprise manufacturing plant or a supplier, for example, but all may participate to some degree in the operations level information and process sharing. Manufacturing capacities and abilities, as well as logistics capabilities and constraints, should be represented here. Real-time information flow and distributed real-time business processes are key dimensions for establishing the topology.

The analysis of CMM should next look into the production and distribution nodes. This models detailed information about equipment, resources, utilities and costs. Much has been written about strategies for continuous improvement at the individual plant level. But there is a growing recognition that many functions typically thought of as plant issues are becoming—or have become—functions that need to be supported across a number of physical sites and business relationships.

Some examples of these distributed functions include: product genealogy, quality management and compliance; real-time or demand-driven scheduling; costing and profitability; parts design, product engineering data and change management; and manufacturing performance information.

Global operations management solutions must be effective in the local plants, but they must also roll up into central or hierarchical views. Global calendars, multi-language, role-based views, as well as multiple media format, global time stamps and legal, regulatory, and financial compliance must all have local dimensions.

Manufacturers with distributed operations and those participating in a supply network with high requirements for synchronization and collaboration should look for operations level solutions that are designed for multi-plant reporting and synchronization. Collaborative networked operations management requires a world view that explicitly deals with distributed manufacturing.

Greg Gorbach, [email protected], is Vice President, Collaborative Manufacturing, at ARC Advisory Group.