As we know from our previous discussion of value chain management today, competitive markets place has put a tremendous pressure on organizations to deliver products and services in a timely manner that customer’s value. Smart companies are looking at ways to harness Web based technology to improve operations management. For example, Schneider Automation Inc (a North Andover, Massachusetts based division of the French multinational Schneider Electric, SA) implemented its transparent factory initiative. This frame work links plant floor automation with enterprise wide business network systems. The company had millions of device sensors and actuators on its factory floors. But each ran on stand alone software and did not connect to the factory’s system network Schneider mangers saw a prime opportunity to capitalize on information technology solutions to manage is operations more effectively and efficiently by linking these components together.
Although e-manufacturing is being driven by the recognition that the customer is king, managers still need to realize that the organization’s production activities must be more responsive. For instance, operations managers need systems that can reveal available, capacity status of orders and product quality while products are in the process of being manufactured — not just after the fact. To connect more closely with customers, operations across the enterprise including manufacturing must be synchronized. To avoid production and delivery bottlenecks the manufacturing function must be a full partner in entire e-business architecture.
What’s making this type of extensive involvement and collaboration possible is technology. Technology is allowing manufacturing plants to control costs particularly in the areas of predictive maintenance, remote diagnostics and utility cost savings. For instance let’s look at how e-manufacturing technology is affecting the equipment maintenance function new generations of internet compatible equipment contain embedded Web servers that can communicate proactively. That is, a piece of equipment breaks or reaches certain present parameters that indicate it’s about to break it can ask for help. It is similar to the check engine warning light on late model cars. Such a warning tells you that something is amiss and needs attention. But technology can do more than sound an alarm or light up an indicator button. Some devices have the ability to initiate an e-mail to initiative or signal a pager at supplier, the maintenance department, or contractor describing the specific problem and requesting parts and service. Such e-enabled maintenance control can prevent equipment breakdowns and subsequent production downtime.
Just-in-time (JIT) Inventory practice:
Systems in which inventory items arrive when needed in the production process instead of being stored in stock.
Large companies such as Boeing, Toyota and General electric have billions of dollars tied up in inventories. It is not unusual for even small firms to have a million dollars or more tied up in inventories. So anything management can do to significantly reduce the size of its inventory will improve productivity. JIT inventory systems change the technology by which inventories are managed. Inventory items arrive when they are needed in the production process instead of being stored in stock. With JIT the ultimate goal is to have only enough inventories on hand to complete the day’s work – thereby reducing a company’s lead time inventory and its associated costs.
IBM capitalized e-manufacturing technology when it invested $2.5 billion in renovating its semiconductor fabrication facility with the goal of automating the entire production process. IBM reengineered its former labor intensive production process by installing an automated manufacturing execution system and materials handling system is integrated with IBM’s own wireless e-business technology. Benefits of the new system include increased employee productivity more responsive customer service and reduced errors and production delays.