Manufacturers Make the Most of TechnologyBy Bob Violino | Posted 2009-12-08 Email Print
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Technologies such as radio frequency identification, product life cycle management and business intelligence/business analytics can help manufacturers improve performance and meet the demand for products as the economy recovers.
Manufacturing companies face daunting challenges: managing inventory across an increasingly complex global supply chain; dealing with wildly varying demands for products; tracking the location of products in factories, warehouses and distribution centers; and monitoring products as they move through their life cycles.
Technologies such as radio frequency identification (RFID), product life cycle management (PLM) and business intelligence/business analytics (BI/BA) can help manufacturers address these and other challenges, significantly improve performance and meet the demand for products as the economy recovers.
RFID systems enable manufacturers to track goods as they move through the supply chain. The technology involves the use of tags affixed to products, packaging, cartons or pallets, along with readers that detect the presence of the tags when they’re within a certain distance.
RFID can contribute to better customer service, according to Dan Miklovic, vice president, Manufacturing Industries Advisory Services, at research firm Gartner. “Manufacturers that understand how to leverage information to provide enhanced value through end-to-end service delivery—instead of just pushing products out the door—will be the winners going forward,” he says.
The systems can potentially help manufacturers better manage their supply chains by improving the visibility of products. In a report published in March, Gartner noted that supply chain RFID is maturing, and cited two primary and distinct application areas for RFID: inventory management and mobile asset optimization.
Product life cycle management is another key technology category for manufacturers. PLM covers a product’s conception, design and manufacture, service and disposal. The technology is especially valuable today, as managing the information associated with a product’s life cycle has become increasingly complex.
“For many discrete manufacturers, PLM competence will be the make-or-break” factor, Miklovic says. “Whether it is complying with carbon reduction targets, REACH [a European Community regulation on chemicals and their safe use] or other mandatory or customer-dictated design criteria, the ability to quickly design products that are ‘manufacturable’ at a market-acceptable price point will require substantial reliance on PLM.”
Multiple users at manufacturing companies can also benefit from BI/BA and its reporting and analytical capabilities. The technology enables companies to gain valuable insights from the information they’re gathering and allows managers to make more informed decisions.
One of the key benefits of BI/BA is improved decision making to support product development, supply and demand, operations and financial management, says Bob Parker, group vice president, Manufacturing Insights, at IDC.
BI/BA can have even greater value when different types of business users can access the tools as part of their day-to-day jobs, experts say. “I think we will see a radical transition in BI in the future,” Miklovic says. “We have focused too long and too much on giving management visibility into operations so they can drill down and diagnose problems. I see a better way: Give operations access to business information so they make the right decisions in the first place. Now that is real BI.”
Following are examples of how some manufacturing companies are leveraging these three technologies to improve operations and business results.
Many companies are using RFID to trace the movement of products in the supply chain, and even to track how and when the products are being used. In 2008, Implanet, a French manufacturer of implantable medical devices, began using an RFID system from IBM as the foundation for BeepN’Track, a service that tracks the movement of Implanet’s products across its supply chain to hospitals.
The drivers for implementing the technology included improving supply chain management and inventory savings, reducing human error, speeding up device recalls, automating the tracing of medical devices from manufacturing to patient use, adding supply chain security and reducing product counterfeiting, says Erick Cloix, Implanet’s CEO.
By using RFID technology, a Web application and a MobiPad M3+ handheld PDA from Maintag, BeepN’Track enables Implanet and hospitals to share data about the location of unused implantable devices. The system also provides data on when specific items were used and when product inventories need to be replenished. In addition, it helps Implanet manage potential device recalls.
Previously, such processes had been handled manually, “which would make it difficult for hospitals to know an item had arrived—thus leading to unnecessary and costly replacement ordering,” Cloix recalls. “In addition, the billing process was time-consuming, and it increased chances of making mistakes in shipping, leaving hospitals without all the devices they had ordered.”
BeepN’Track is based on IBM WebSphere Sensor Events and IBM InfoSphere Traceability Server software. The information stored on the Tagsys 13.56MHz high- frequency passive tags is gathered by the Sensor Events software and transmitted to the Traceability Server software. This allows Implanet to manage and share information with the systems of any trading partners that adhere to GS1, a global standard for capturing and sharing sensor data.
By using BeepN’Track, Implanet has reduced consignment stock by 20 percent, increased sales by 5 percent, improved productivity by eliminating manual processes and human errors, and automated ordering and resupply processes. Accurate device recall, automated traceability, device availability and other process improvements have led to increased patient safety. The system also has helped Implanet with regulatory compliance efforts.