Operational excellence key for survival

Speed and time. Those are the two key elements today that either work for manufacturers or work against them.
If you listen to Peter Fingar, executive partner for the Greystone Group and author of numerous books on business strategy, there is a new world of competitors out there and they want to take away your business. So, manufacturers have to get smart, get fast and get it done yesterday, he said during his keynote address at Mesa’s Plant-to-Enterprise Conference in Orlando, Fla.
“It is now time to get ready for the global innovation wars,” Fingar said. ‘The next big thing in business is operational innovation. It is not what you do, but it is the way you do what you do.”
Fingar talks about Business Process Management (BPM) as a new way to enable manufacturers to integrate their processes with the enterprise IT systems to allow for greater collaboration.
Right now, Fingar said, “agility and responsiveness trump efficiency. We need to manage time as rigorously as we manage costs.”
What Fingar is talking about is for manufacturers to change into becoming more of a time-based manufacturer. “Time-based competition is process-based competition.”
In the end, it all comes down to how well the communication system works up and down the enterprise. “For agility to happen, we have to manage the silos from the top to the bottom. The network is the new value system,” Fingar said.
“Connectivity is making the world around us smaller, but it is making the business footprint larger,” said Matthew Bauer, director of Information Software at Rockwell Automation and chairman of MESA. “Information is the foundation for the next manufacturing revolution. The information revolution will have far reaching consequences and shape the world we live in.”
Manufacturing is going to change at three levels, Bauer said. One is the global economy is applying force on supply chains because there is a lack of timely information and control. In the recent cases in China which forced toy, toothpaste and peanut butter recalls, they have combined to give manufacturers brand exposure and potential liability. “Maintaining visibility across the supply chains can be a real challenge.”
The second level is expectations. Manufacturers expect more form their suppliers because end users expect more from the manufacturers. Everyone needs real time information.
The third level is technology. “Manufacturing enterprises are hungry for information flow that technology can provide.”
AMR’s analysis for software spending this year shows for the first time every spending plans for manufacturing outstrip ERP, Bauer said. The IT spending spotlight is now on manufacturing because the opportunities are abundant for reducing costs in manufacturing operations.
At the end of the day, Bauer said, it all comes down to how people can work with one another, namely the convergence of IT and manufacturing.
“These really are two different cultures that need to find a common ground because these are two different areas that are the key to the transformation that is occurring in manufacturing today.”
“The main ingredient in BPM today is how humans works together to get the work done,” Fingar said.