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At Manufacturing Executive Launch, Integration Is Key Topic Sign Up to receive Daily News Alerts in your E-mail Inbox
Posted on Wednesday, April 23, 2008 8:21:28 AM |
HANNOVER, Germany — At a press conference today to launch Manufacturing Executive, a new pan-European publication for European industry executives, an expert panel said that integrating the enterprise and the plant floor is essential to responding to customer demand, but noted that organizational barriers still stand in the way.
"Technology is not really the key issue in manufacturing enterprise integration," said Andy Chatha, president of the ARC Advisory Group. "You’ve got to get people from all sides of the business working together. Right now, integration is a must for everybody," he said. "Manufacturing companies must have good visibility of the whole manufacturing process if they want to meet today’s customer expectations. But it’s going to be a long journey."
Chatha was addressing a packed audience during an open debate on plant floor to enterprise integration, hosted by Manufacturing Executive magazine, which consists of a print magazine, a new Web site, and, next year, executive-level conferences. The publication is being produced under the auspices of Managing Automation magazine.
Joining Chatha on the panel was Paul Martin, global chief information officer at United Kingdom-based aluminum can maker Rexam plc, who agreed that cultural and people issues pose a huge challenge. He recalled visiting all of Rexam’s plants worldwide to talk in person with manufacturing teams and shop floor employees about integration’s benefits.
"We took them through the entire ‘here’s what you do today, here’s what you’re going to do in the future, and this is why it’s better’ argument,’" Martin said. He had the advantage of complete support from Rexam’s CEO, who initiated the integration project and who even reminded employees in monthly addresses about its importance. "It was always on his radar," Martin said.
Arla Foods is also engaged in plant floor to enterprise systems integration, said fellow panelist Arne Svendsen, head of manufacturing IT at the Danish company, but the activity has competed with other enterprise-wide projects. His advice: "Keep it simple. Plan all and start small," Svendsen said. "That’s the secret of success."
Gerhard Steininger, senior consulting associate with IDC/Manufacturing Insights, recommended breaking the tasks down into smaller parts with target goals organized around business processes to make it more manageable and gain C-level engagement.
Convincing unionized workers "was a challenge," added Rexam’s Martin, but it was one that he claimed the U.K. company met. "Everybody embraced it — both the technology and a new way of working," he said. Martin emphasized the importance of communicating in non-technical language, focusing on business processes and behavioral changes rather than bits and bytes. The company, which spends $1 billion each year on aluminum to make 2,500 cans every minute, now ties both supplies and customers into its IT platform and processes 97% of all orders electronically.
Both Martin and Svendsen agreed that integration hits roadblocks and typically takes longer than planned. "Through the years, we’ve been sidetracked because we’ve done quite a bit of M&A activity," Martin said. Rexam focused on the "big items" with the most payback. For instance, it prioritized an integration program with its aluminum suppliers that has improved cash flow at Rexam. That project developed links that alert suppliers when Rexam has finished using a roll of aluminum, enabling Rexam to pay for the aluminum it uses, and only when it is used.
Panel member Chris Colyer, Microsoft’s global industry director of manufacturing operations strategy, added that a number of CIOs today are still sitting on the fence about plant floor integration. "Well under 50% are doing it yet — but they already know it’s coming right at them," he said.
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