Pent-up demand for enterprise manufacturing software is causing a rise in budgets, says Mike Evans. But the challenge for the project sponsor has changed, from automating one division or function to creating business value that extends far beyond the key users.
By Mike Evans
Industrial companies buying software tell us that investment budgets are back. However, these budgets come covered in thorns. The project sponsor has to make a business case.
In the past, a typical business case justified investment in one organizational silo in some Three Letter Acronym (TLA) software solution. That might be Product Lifecycle Management (PLM); Enterprise Resource Planning (ERP); or Manufacturing Execution Systems (MES).
Today, the business cases have to show that they produce tangible benefits for a new series of business challenges. Many of the challenges are specific, such as supporting a sales representative with a configured design for their prospect via their iPhone or Blackberry. However most of these challenges are more generic. They come from a more globalized, more connected and more dynamic world of industry. For example, the globalization of business creates far more choices when selecting components to assemble into a product that satisfies customer demands.
The common thread is that these business cases have investment in one department but savings elsewhere, sometimes even outside the investing enterprise. For example, investment by the company designing the final product may produce savings in companies in their supply chain. Such benefits have to be passed on in the price and commercial conditions for the components built into the final product.
Integrated software solutions are able to eliminate barriers, not just within one enterprise, but across enterprises. They do create tangible savings by reducing delay and information loss between links in the industry chain that designs, produces and ultimately sells the product. However, they also introduce complexity. Just consider the design link in the chain. The design manager will carry a higher organizational load to supervise and monitor the various design tasks. Each individual designer faces increased pressure with the need to consult more stakeholders more frequently. When things go well, the return on this effort is to improve both the price point and the functionality for the customer. For example, the design can be partitioned in different ways as
the component technologies evolve to reduce cost as volume increases.
We’ve been watching this evolving situation for some time. Back in 2007, Cambashi integrated its operations with a partner firm, Industry Directions, that had similar expertise but in the adjacent domain of plant operations and supply chain. Two years later, we would like to share the insights that combination has highlighted. There are several areas of interest but in this article I want to focus on the how the challenges of integration between design and shop floor manufacturing will change the design process.
The CAD/CAM industry can justifiably be proud of the huge strides taken to develop integration between designing parts and machining them. Before the first graphical NC part programming tools emerged in the late 1970s, the first step for production engineers was to read the design drawings and then redesign a part that could be made. I’ve omitted the deep sigh; the colorful language commenting on the designer’s lack of contact with dirty hands shop floor
manufacturing; and the pleasure in reporting to management that this design could never be made.
Early CAM systems required complex steps to produce the part program on each instance of a machine tool and its controller. There were often different user interfaces to deal with prismatic parts and sculptured surfaces. These initial very expensive systems still paid for themselves by reducing try out time on expensive machines and write offs of expensive castings and tooling when things went badly wrong.
Since then, the price, functionality and usability of NC part programming systems has improved dramatically. Today’s systems don’t require complex steps to move information from CAD to CAM. Even when models have incomplete information, software can translate low precision and incomplete data, filling in gaps with automatic data repair tools to generate a valid, high-precision design model. The graphics user interfaces are now tuned to specific production engineering tasks independent of the part geometry. Ancillary machining activities from nesting on sheet metal to tool management and high speed machining are all supported.
There have always been computers on the shop floor but these have often been invisible to the enterprise computing infrastructure. They are usually bought out of the Plant department’s budget. To avoid the CIO’s scrutiny they were probably disguised as “controllers.” The information they managed was locked up in a series of boxes that did not communicate with each other.
The new generation of factory floor equipment with programmable controls uses industry standard computing: the cost of sensors and actuators is falling dramatically; standard hardware replaces custom electronics; standard operating systems are deployed; software products replace custom software; standard industry networking works in factories. These developments add a new level of flexibility to the production environment at lower cost.
The leading edge production machine systems provide a programmer’s tool kit so that a sophisticated user can customize the machine themselves for some improved process or material. In the longer term, we would expect there to be an add-on market where third parties provide software on machine maker’s platforms to customize them to particular jobs.
The corollary of more intelligent industrial machinery on the factory floor is that it can connect to enterprise and technical applications. Even factory managers who have spent a lifetime making sure that the IT group do not infect production facilities with bugs and downtime now see the benefits of this convergence. However, we believe that few businesses have yet taken advantage of all this intelligence and connectivity.
Much has already been written on how an enterprise can configure Enterprise Resource Planning systems to take advantage of information collected on the factory floor. The marketing hype is about managers making better business decisions and this is of course true. However, we think the real benefits come from a series of process simplifications, often invented from the bottom up, using this better connectivity. For example, a customer account representative answering “Where is my order?” can look at the shop floor status and give the customer facts rather than guesses.
Not so much has been written about the more interesting opportunity, which is to optimize the industry network that designs, produces and sells the product. Many industry networks today have separate partners participating in design, supply, production, distribution, and marketing. As brand owners separate what they do from what partners do in new ways, this ability to connect manufacturing to design and other enterprise areas will inherently mean creating an integrated information infrastructure for the industry network, not just the enterprise.
Re-focusing on the challenges of integration between design and shop floor manufacturing, industry networks increase the chance that the design team and manufacturing team will be in different businesses and geographically remote. This does not help solve the complaint that designers don’t understand manufacturing. To date, most effort goes into reworking traditional processes to use modern communication techniques, software and equipment to reduce error rates and raise productivity. To achieve the full potential of such capabilities the processes themselves need to change.
The new intelligent manufacturing infrastructure for a product can be visible to the design team at the design review stage. Some software systems allow the designers to simulate the whole manufacturing process, in terms of sourcing, part manufacture, assembly, test and despatch. Those problems that use to only be found when the production engineer saw the drawings can be caught earlier, and resolved at much less cost.
Our challenge to industrial firms is to ask them if they are ready to create competitive advantage by deploying software solutions that enable the industry network to act as an effective, coordinated and agile business entity.
Our challenge to software providers, from giant companies like Microsoft, Siemens and SAP, through to small specialist providers and resellers is to ask them how they intend to support industry networks. We don’t want to hear another marketing pitch about “Cloud” and “SaaS (Software as a Service).” We do believe these may well be important enabling technologies. We want them to explain business benefits in specific applications. Our contacts want
information that they can use to build a business case to invest across the industry network. §
Mike Evans, Research Director for Cambashi, is recognized as one of Europe’s foremost experts on IT for industry. He specializes in the economic impact of software applications in engineering, manufacturing and automation. He works as an independent advisor to leading IT companies and government agencies worldwide. He is a regular contributor to numerous European, Japanese and American publications, and a widely respected speaker on the international conference circuit as well as lecturing at management colleges and universities. Evans studied engineering at Cambridge University, holds a European Patent for computer aided shoe design, is a chartered engineer and a member of the British Computer Society.
Cambashi is a global strategic IT advisory firm specializing in management, marketing, industry analysis, and market research for engineering, manufacturing, construction, and related industries. You may contact Cambashi at 52 Mawson Road, Cambridge CB1 2HY, UK; Tel: +44 (0) 1223 460 439. www.cambashi.com. Copyright 2010 Cambashi Limited.