Manufacturers Make the Most of Technology
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.
Coordinating Product Development
Keeping track of products in development is often a complex task fraught with potential problems. Xerox’s Global Product Delivery Group in Wilsonville, Ore., is addressing the challenge by using open source PLM software from Aras. The software enables Xerox engineers, offshore manufacturing partners and remote development partners to coordinate on product development and keep track of changes during the process.
“The biggest problem is change control,” says Andy Finkbeiner, manager of the engineering support department at the Xerox Wilsonville facility. When the group is developing color printers, Finkbeiner says, the process involves a large team that includes engineers and manufacturing partners located around the world.
“If you have 100 engineers working remotely on a product that contains 1,000 parts, and an engineer finds a problem with his or her part and needs to make a change, that change needs to be communicated to everyone else who has a mating part,” Finkbeiner explains. “The driving force [of the PLM adoption] is trying to coordinate a group of engineers” working in many different locations.
The PLM software is used at each stage to monitor product development. Typically, development begins with design and then a prototype product, followed by various tests to find issues that require fixes. Solutions are developed, changes are made, the changes are approved and the design drawings are updated. PLM tracks all the activity and sends e-mails to all the interested parties, including the procurement people, who then order the parts.
The software has been in use at the Xerox facility for about a year, and so far is used only for projects managed by the site. Even so, the software’s impact has been significant in terms of reducing errors in the product development process.
“If a person makes a change and everybody is notified, the project moves smoothly,” Finkbeiner says. Projects are being completed in a timelier manner, and quality has increased. “We can see the benefits internally; we see ongoing avoidance of small errors,” he adds.
One of the key benefits is the lower up-front cost associated with an open source product. There are no licensing fees; Xerox pays only a small fee for a maintenance service that includes training and product upgrades.
Making Informed Decisions
Rossignol USA, a Park City, Utah, company that manufactures and distributes skiing and related equipment, wanted an easier way to get information about products and orders to its independent sales force, which is scattered throughout North America, and to a corporate management group that travels extensively around the world.
“We were struggling [to provide] information access for those people while they were outside the normal office confines, which is most of the time,” recalls Jim Hunter, vice president of operations and CFO at Rossignol.
The company tried a number of solutions, including creating remote log-in capabilities for its proprietary ERP system. But none of them provided an easy, reliable way to deliver information access to users who worked from the road.
Rossignol eventually selected PivotLink’s on-demand BI/BA application. Because the technology is provided as a software service, implementation challenges were minimal, Hunter says. And because the application is Web-based, users can access business analytics, reporting and dashboard capabilities from anywhere there’s an Internet connection.
The sales reps use the application to monitor the flow and accuracy of order information being received from retail customers, so they can track which orders are in and which are not, and whether the quantity of goods being shipped is accurate. Managers use the application to determine how well specific types of products are selling around the country, to learn how many products individual reps have sold and to measure other performance factors. “It gives them the ability to do any kind of analytical work they want to do by looking at actual performance data,” Hunter says.
The BI/BA tools enable business users to make more informed decisions and better serve customers, Hunter says. The company also provides the sales and order information to planning groups in its factories worldwide, so they can better plan production schedules based on the expected demand for specific types of products.
The application worked so well for the initial users that employees who do not typically work from the road recently began using it. “It has now become the information source of choice for our entire staff,” Hunter says. “This is the preferred method of access to most of the information they need on a day-to-day basis.”
With products such as RFID, PLM and BI, manufacturers can gather more information and use that information to improve processes, customer service and the bottom line.