19 Sep Manufacturing IT: Next order is moving beyond the basics
Milwaukee, Wis. – In an era where China has become the state’s third largest export market, Wisconsin manufacturers are embracing information technology, but are they hugging it to the extent necessary to compete in global markets?
Despite the diversification that has occurred since the recession of 1982-83 escorted thousands of manufacturing jobs out of Wisconsin, manufacturing still is considered the key to the state’s economic engine. New competitive threats have emerged in Asia, and “ahead-of-the curve” manufacturers are leveraging IT not only to help establish partnerships in places like China, but to extract more out of their lean-manufacturing strategies, optimize business processes, enable growth, and learn more about their customers.
To assess way the industry has responded so far, and to envision future possibilities, WTN spoke to a pair of technology managers who addressed the future of information technology in manufacturing during a recent eInnovate panel discussion. They believe the future holds many beneficial possibilities, especially if more manufacturers embrace technology for reasons that go beyond order fulfillment.
Our experts represent the makers of conveyor belts and medical devices, and they have taken IT out for a spin and have seen what it can do. They include Joe Kimple, a global functional leader in clinical systems IT for GE Healthcare, and Dave Leannah, IT director for Dorner Conveyors.
While they represent exceptions to the rule, each believes that Wisconsin manufacturing still is in the beginning stages of leveraging information technology. “I would say we’re more on the discovery side, to be honest with you,” Kimple said. “Overall, we’re not that familiar with tools or processes yet.”
IT past and present
Because GE Healthcare and Dorner have made significant technology investments, they are in a position to take additional technology steps.
GE Healthcare is best known for incorporating multi-functional software into its medical device products, but it has deployed behind-the-scenes technology to improve business performance. For GE, this has centered on the implementation of Oracle’s enterprise resource planning (ERP) system and subsequent customizations, and more recently its manufacturing execution system (MES) – including a new data-capture tool.
While work continues on the ERP side, the data-capture tool is one of the technology products the organization is using to dig a little deeper to the shop floor, driving real-time information that is used for a number of business-improvement purposes. The profit-and-loss unit Kimple resides in has 30 manufacturing sites worldwide, and a tool that provides “as-built” information on components, can track materials from vendors, and then monitor how they are consumed in the assembly process – not to mention uncover product defects in real time – has yielded valuable information.
The MES tool provides data on cycle times in the manufacturing processes. Based on input from its manufacturing engineers and its lean-manufacturing work, GE Healthcare knows how long each cycle should take. “The tool gives us information on how close we are to that target,” Kimple said.
Not only has the data-capture tool – a combination of software, servers, architecture, and infrastructure – contributed to highly customized workflows, it has enabled GE to refine its business processes and more quickly respond to customer and supplier queries. The data produced helps GE “quarantine” problems faster and avoid bottlenecks in the assembly process.
As for the future, the company has put a great deal of thought into what information technology can do, and the first order of business is to develop interfaces between the ERP and MES. The move to higher integration between the two not only eases the burden on both, but it can be a prelude to converting to virtualization, which can be applied to desktops, servers, and storage for better security and increased flexibility.
In GE’s case, virtualization would be adopted for the benefit of suppliers.
“We’re looking at potential directions there,” Kimple said.
Conveying an IT message
At the Hartland-based Dorner Conveyors, IT has been used to support lean-manufacturing practices, eliminate steps in assembly processes, and it also has streamlined components of the company’s supply chain (purchasing, access, and communications).
Dorner fabricates entire products and assembles them, stocking raw materials for the parts that are cut to dimension. It does the
cutting, drilling, and forming rather than stock large numbers of different lengths of material. It’s not so much that there are a lot of moving parts on the conveyor belts, but a lot of different parts. “That’s where lean has helped us out,” Leannah said.
Leannah has been with Dorner for two years, and most of its lean initiative was complete by the time he arrived. Now, the conveyor manufacturer is into the realm of information technology systems.
“It’s about getting supply chain access to our information so we could better know orders coming in,” he said. “We have many small orders rather than a single, large one, and we had to keep transaction costs down on the purchasing side while getting the prices of a large order.”
When a manufacturer can drive down unit pricing, it can commit to a larger volume, he notes.
Customer care
Improving customer relationships is where Dorner is headed with distributor portals. Since its conveyor belts mainly are sold through distributorships, Dorner is helping distributors adjust to the lean practices it has adopted in recent years. The pertinent question for suppliers was, “what can we help you learn from us in terms of the `lean’ journey?’ This was a business process question pertaining to getting purchase orders into hands of suppliers, some of whom had faxes, some of whom had e-mail.
The solution was to optimize a business process with a little technological help. The new technology is a web-supplier portal built “in-house” to foster communication between suppliers and Dormer.
“We had to automate both the purchase order to, and the acknowledgment from, a supplier,” Leannah said.
Enabling growth has been another factor in Dorner’s IT choices. The company now is swapping out an ERP system that had been in place for 20 years. It was not only heavily customized – and more so through the years – but the company is growing at a rate where older systems are breaking down due to sheer volume.
Enter Epicor Vantage, the new ERP product that is being installed in conjunction with the jettisoning of 30 information silos that grew up over the years, saving on maintenance and support.
The future holds more technology deployment. According to Leannah, Dorner’s next phase will introduce product configuration over the Internet, essentially to help create a buildable design that distributors can be engaged in. Dorner has highly configured products that are used in everything from industrial environments to highly sanitary environments like bakeries and cheese makers.
Part of Dorner’s knowledge base is designing a tool distributors can use, and in engaging them to be a part of the design process, the company also is trying to reduce the time it takes to train salespeople to explain what works and what doesn’t.
Scratching the IT surface
Manufacturers are just scratching the surface in their use of IT, where future possibilities include everything from real-time tracking to (off-site) self-monitoring to smart processes and products that detect trouble before plant operators (and consumers) do.
The way the global economy is shaping up, small manufactures that are not efficient will be hard pressed to survive. Many are seeing their older systems, some of which are 15 or 20 years old, failing to stand up to the rigors of increasing complexity. The old “set it and forget it” approach is no longer applicable, but Leannah said a lot of work is required to change the manufacturing mindset.
“They understand the need for information technology, but it’s not like we’re installing Word or Excel,” Leannah said. “If they are in a system after 20 years, it’s hard to adapt. It’s a bit of a mindset shift, but the change is well worth the effort.”
Kimple’s advise is to focus on “what’s first.” Small manufacturers may be busy with adopting ERP systems because there seems to be a push by a number of the ERP suppliers to drive toward smaller enterprises. Focusing on this level first makes sense, Kimble said.
External pressures remain a motivating factor to do even more, however. A lot has been written about off-shore manufacturing and the economic pressure this has created, but driving an IT tool down to the manufacturing level can be a bit daunting. “It really requires some tight coordination to ensure that operations aren’t interrupted,” Kimple said. “Larger conpanies may be able to integrate these tools because they have more project team resources and can cover the hand-offs to ensure that things go smoothly.”
In addition, there is the expense of deployment, an element that cannot be overlooked. From GE’s experience, IT is an enabler for manufacturing and the supply chain, but even Kimble wonders whether enough IT has been deployed. “In our world, too, we’ve focused on fundamental lean work first, and now the IT tools are coming along,” he noted. “So, from that sense, we’re also in our early stages for manufacturing-specific IT tools.”
Related stories
• Tom Still: High-end exports can distinguish Wisconsin in China’s emerging markets – for now
• Tony DiRomualdo: New China Syndrome: When outsourcing turns toxic
• Manufacturing assistance generated $137 million in economic impact
• Abbott, GE agree call off their diagnostic acquisition deal
• Beating back the bozos is an innovation must, says Kawasaki