Manufacturers Stay Agile

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No matter what you make, the concept of agility is driving your business. Better get used to the factory floor.

How do you move a 150M-BYTE file from the Unix-based engineering department to the PC LAN-based plant floor? Today, Harley-Davidson Co. does it 1 megabyte at a time. It takes about an hour over a T-1 line, says Larry Stair, manager of engineering systems at the Milwaukee-based $1.2 billion motorcycle maker.

That’s going to change because Harley is striving to be more agile.

The plant guys don’t have time to read blueprints. They need three-dimensional models–files up to 150M bytes–on their PC screens. They need the data to prepare bills of material, to program manufacturing machines, to send specs to tooling suppliers, and to monitor quality. In this blitz-paced world, every minute shaved off the time it takes to move product to market means the difference between life and strife.

Welcome to the Age of Agility, where rapidly changing markets, cutthroat competition, and choosy customers mean the entire enterprise must be poised to deliver faster, better, cheaper, and more varied products. In interviews with dozens of IT experts, manufacturing engineers, researchers, consultants, market analysts, and vendors, we found agility means different things to different people. But most agree–and this special report emphasizes–that it must include linking and integrating the islands of infor mation in the manufacturing archipelago.

Taking an hour to move a 150M-byte file is not agile. Harley has rapid prototyping and other agile elements but not all of them. Agility is state-of-the-art manufacturing technologies bolstered and integrated by robust infrastructure, client/server architecture, powerful PCs, rapid applications development, interoperability, real-time data management, and bandwidth–lots of bandwidth. And agility takes cooperation between manufacturing and IT as much as it takes technology. Stair is among a small but growi ng minority who recognize that fact.

The need has never been greater. “A couple of years ago, most companies were trying to right size, reduce costs, or optimize activities in a vertical way–the design aspect, the plant floor, the distribution system,” says Lutz Hahne, general manager of IBM’s Manufacturing and Process Industries Division. “That does not make you as competitive as you need to be. You need more integrated processes.

In the beginning, there was Total Quality Management. TQM begat flexible manufacturing, which begat Computer Integrated Manufacturing. The Japanese begat just-in-time delivery, which begat lean manufacturing. That begat rapid prototyping, which begat concurrent engineering and mass customization. (An oxymoron?) Materials Resource Planning begat Product Data Management, which begat Management Execution Systems. (Or was it the other way around?)

The fads, phrases, and buzzwords begat bewilderment.

And where did “agile manufacturing” come from? The term’s been around at least five years. Research continues today under the auspices of the Agility Forum and is designed to find ways for business to master change and uncertainty and to integrate employees and information in all aspects of production.

The forum defines agile manufacturing, in part, as the ability to respond quickly to rapidly changing markets driven by customer-based valuing of products and services. It says agile enterprises have the ability to reconfigure operations, processes, and business relationships swiftly.

The important thing is this: Using state-of-the-art design and manufacturing technologies, many companies have gotten better at meeting customers’ needs, responding to changing markets, and producing higher-quality products. They reduce paper, prototype products quickly, shorten cycle times, link supply lines electronically, create virtual inventory and companies, and give customers more choices.

Some results have been widely reported: Motorola’s customized pagers and Levi Strauss’ custom-tailored jeans. Others are almost hidden from the public. The Big Three automakers, the aerospace industry, semiconductor makers, the computer industry, and pharmaceutical companies have sped design, manufacturing, and customization. All are seeking the holy grail of agility.

The demands of markets and customers define agility for these companies. “The key issue is to define why you want to be agile: to produce a wide variety of products, to customize products, to ramp up quickly, and introduce lots of new products on a rapid ramp. All these are different forms of agility,” says Sara Beckman Gow, a senior lecturer at the University of California, in Berkeley, and former agility expert at Hewlett-Packard.

Call it agile. Call it whatever you want. Your enterprise needs to make rapid changes at every phase of getting its product to market. “Companies are getting much closer to that goal of forming a link–materials, manufacturers, designers, transportation providers, distributors linking together,” says Jim Shepherd, vice president of manufacturing applications research at Boston-based Advanced Manufacturing Research Inc., a market-research firm widely credited with coining the term Manufacturing Execution Sy stem.

Islands in the data stream

Did someone say “links”? That’s where IT leaders come in, and we don’t mean playing 18 holes with the CEO. The so-called seamless integration of product data from design to resource planning to plant floor to outside suppliers to purchasing to anyone who needs it–this is the IT challenge. “If you don’t integrate everything, you’ll end up having islands of information that won’t communicate,” says Art Levin, CIO of TJ International Co., a $700 million forest products company, based in Boise, Idaho. He admo nishes IT execs to “develop a vision of how all this stuff fits together and implement the vision.”

On one hand, Harley’s Stair has distilled his problem down to simple technical terms. The 150M-byte file needs an ATM or frame- relay network. On the other hand, the real problem is that “engineering is responsible for CAD. But IT is responsible for the pipes that transmit the 150M-byte file, and they’ve never heard of a file of more than a megabyte.” The answer: a new way of doing IT business. “IT has not been involved in any engineering systems,” Stair says. “We’re reorganizing to align ourselves and faci litate those functions.”

Harley’s experience is not unique. We heard this time and again: IT has not been involved in manufacturing technology decisions. “IT people have traditionally been indifferent to engineering,” says Cory Eaves, MES product manager for Intellution Inc., a vendor of MES software based in Needham, Mass. “Our message: Don’t be indifferent.”

There’s indifferent, and there’s obstructionist. Steve Siegel, director of manufacturing systems for Teledyne Allvac, a subsidiary of Teledyne Inc., based in Monroe, N.C., has waged a seven-year crusade to make five specialty metals plants more agile–even before the term gained currency. He began with shop-floor data management and now is trying to integrate other production functions. Back when Siegel was a lonely apostle of change, taking two years just to find the right software, the IT guys didn’t tak e him seriously. As he got closer to choosing a product, “there was something of a fight,” he recalls. “IS asked us to slow down so they could catch up. Siegel told IS: “You can either jump on board or get left behind.”

At Harley, Stair is hopeful because the company now has what it calls an Information Technology Circle. About 10 IT leaders, including Stair and their business-unit partners, wield collective authority for IT projects for the entire enterprise. The circle, whose leadership rotates, meets once a month to plan strategy, set priorities, and approve budgets. Business units still have individual IT budgets, but the circle has final approval for all IT spending. With that kind of backing, Harley is planning to i ncrease network bandwidth, add product data management, and electronically link its regional tool suppliers.

A new attitude

Harley’s on the right path. Find a company that’s linking the manufacturing islands, and you’ll find one where IT and manufacturing people work closely together. End users must drive the decisions about which design and manufacturing technologies to adopt. But IT staff must push if necessary to get in on the earliest planning stages.

This requires a change in attitude. “The companies that seem to be successful tend to integrate their technology investment into some larger organizational change,” says Richard Lester, a professor at the Massachusetts Institute of Technology and director of the Industrial Performance Center, one of 11 centers dedicated to agility and funded by the non-profit Sloan Foundation.

Redesigning the IT infrastructure is the same thing as redesigning the organization, Beckman Gow argues. Organizational charts are all about who needs to talk to whom. Distributed processing is all about which computers need to talk to which ones. As IT executives install new information systems, they are re-creating the organizational structure. That’s a huge responsibility. “The CIO should be thinking about this as the organizational design problem,” she says. “How do I get players from across the organi zation to talk to each other? What information are they exchanging? How do I facilitate that?”

No one’s suggesting the IT executive is solely responsible. But there’s a huge opportunity here. The following pages offer stories about what companies–some on the leading edge, others playing catch- up–are doing to get agile. Read them. And ask yourself: Doe7s your enterprise want to stumble or glide into the 21st century?

 

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