Editorial from the May 2007 issue of Managing Automation

Creating the One Enterprise

by Stephanie Neil, MA Editorial Staff

Posted on Monday, April 30, 2007 3:15:26 PM                                     

Every manufacturer has a mission statement. It's typically phrased in a way that emphasizes the company's commitment to its customers. At PolyOne Corp., a maker of plastics, colorants, and specialty additives, the corporate mantra is: "We help people work wonders with polymers." But that's the external message. Internally, the corporate slogan has a bit of a different ring. It goes like this: "Simplify, integrate, and automate."

PolyOne has been working since the 1980s to standardize processes and automate parts of its business. The goal has been to reduce costs in the organization, produce product as efficiently as possible, and meet customer needs. Back in the 1980s, however, things were much different.

While companies like PolyOne have long held a vision of cutting costs and building a better business, they have had to improvise methods to achieve those ends. Often, departments had to take the initiative themselves, resulting in little more than islands of best practices.

Leading up to the year 2000, as the Y2K computer changeover problem loomed, manufacturers engaged in a flurry of system upgrade and replacement activity, including standardizing on ERP backbone systems. Yet, as many companies soon found out, mammoth ERP deployments, if not done right, can add another layer of complexity onto the IT architecture.

Today, manufacturing executives are again casting a critical eye on the IT and automation infrastructures. They are determined to finally deal with the proliferation of systems and applications, too many ad hoc procedures, and not enough integration. The mandate now is to design a tightly integrated infrastructure to support the company's activities. The watchwords are architecture, architecture, architecture.

This focus coincides with a more intense global business climate characterized by a greater need for speed in innovation and getting products to market, new regulatory requirements, and figuring out how to manage outsourcing arrangements and partnerships on a global scale.

Though a worldwide presence is a business imperative, it has actually resulted in fragmentation at many organizations. As a result, manufacturers are now formalizing the standardization efforts that, in part, began years ago. Companies, such as PolyOne, that are seeking to build a more cohesive organization are finding ways to unify business practices and technology deployments across all departments. This trend is under way across all sectors of the manufacturing market. Alcoa Inc., Arla Foods amba, DuPont, and Molson Coors Brewing Co., to name a few, are in the midst of corporate-wide efforts to create the "one company."

Global chemicals giant DuPont calls its effort "One DuPont" and defines it as having enterprise interoperability and standard work processes across the company. Similarly, PolyOne recently implemented an "operational excellence group" to drive common processes. Alcoa created the Alcoa Business System (ABS), an integrated set of principles and tools used to manage the business, and Molson Coors, following its 2004 merger, created an Office of Synergies and Integration to streamline organizational design. Regardless of the name, the goal is the same: to standardize and harmonize operations.

The business drivers are well-known. Acquisitions, globalization, the need for speed and agility, and managing far-flung networks of partners and suppliers are fomenting the move toward common processes and systems. A company that has manufacturing operations in Asia, Europe, and the United States, for example, will typically approach production in different ways, based on available technology, local regulations, and even culture. That disjointed approach, however, is expensive and may not even be sustainable in the long term.

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