Manufacturing Talk

What happened to the Good Old Manufacturing? - Part 1

2012-02-06T10:17:40Z

Guest Post by Varun Chhibber, Associate Consultant, MFG-ADT Online, Infosys

Recently there has been a lot of hue and cry over the outsourcing and the job losses that followed. Major companies have been accused of exporting jobs to Asian countries such as China when there has been an ever increasing need of job creation in their native countries. To this companies argue that they are creating a lot of jobs indirectly by creating opportunities and if the jobs are not moved to save efficiencies, eventually it will lead to further job losses!

]]> What used to happen?

In earlier times major companies used to employ lakhs of employees. All the manufacturing used to be at one place and this provided huge employment opportunities to workers which led to the rise of a new prosperous middle class. This has changed over the years and today the manufacturing supply chains are spread across the whole globe.

Rationale for Outsourcing

Business value

But a part of this trend has been changing with the advent of ecommerce, more and more companies are going the online way bypassing the traditional channels (retailers, wholesalers etc.). Directly approaching customers saves a lot of cost and due to this reason some manufacturers are shifting their focus from manufacturing overseas.

By manufacturing in say USA, what a manufacturer gains? :

· Made in USA Tag has its premium and perceived quality is higher (valued by customers)

· Reaction to the new trends could be swifter if manufacturing is done locally (quite applicable to apparel manufacturing).

· Quality issues can be solved well in time avoiding heartburns later due delay in delivery to the customer, rejection of the consignment or going to the market with sub quality products.

This is where we come into picture and we can help our partners by providing them with online solutions in the domain of ecommerce which will help them go directly to their customers. This doesn't have to be the only way going forward (different channels can be employed simultaneously), but it could be one of the ways for future.

What do you think?

Big Data

2012-02-02T11:24:59Z

Guest Post by
Srinivas Kamadi, Practice Manager, Manufacturing, Infosys

While we look at spaces with tremendous current potential for servicing clients and increasing business engagements, I believe what sets us apart is the conscious effort towards looking into the future and placing our bets in areas that are likely to see traction over the next few years. Big data management is such an area where I am seeing a lot of client intent that is backed by the willingness to shell out real dollar investments. The volume of data that is getting generated in today's digital world is staggering...

4 Billion - Bits of content shared every day on Facebook!
1000 Petabytes - Data stored by the US discrete manufacturing firms in 2010 and is the largest among all the sectors in the US. Government sector at 850 Petabytes,
Communication at 720 Petabytes and Process Manufacturing at 700 Petabytes are other huge opportunities.
€300 Billion - is the cost reduction that can be brought about by Big data management in Europe
$60 Billion - is the potential play for Big data management in Social networking and technologies space...

]]> ...and I believe that we play a significant role in helping our clients build a robust foundation in the big data era. Our services in the big data management space focuses on delivering practical returns to our clients. Some of these areas are:

Helping our clients understand "relevant" data - Just because an organization produces petabytes of data, does not mean that every byte needs to be mined for intelligence. It is important to figure out what data is relevant to the organization and its business and what isn't. It is also pertinent to note that a lot of hype surrounds the big data space and service provider and product vendor scamper to monetize the next big thing in enterprise computing. It is prudent to understand how data that is created internally is furthering organization performance, understand the gaps that exist and then determine data needs to fill in those gaps.
Big data initiatives driven by end customer outcomes - Typical early adopters have been the Sales and Marketing arms that tap into transaction data and leverage Social media streams to better understand customer psyche and buying trends. These are then analyzed to draw actionable insights into enhancing productivity or increasing sales dollars
Evaluating data architecture and related infrastructure to absorb the big data impact - A recent Gartner report says that 85% of currently deployed data warehouses will, in some respect, fail to address the new issues around extreme data management by 2015. With data storage needs expanding exponentially, big data engagements would mostly result in changes to the storage infrastructure and ultimately influence the information management architecture. This would lead to initiatives that make the current IT landscape extensible and scalable and a roadmap to integrate disparate systems that feed data for big data analysis. A great play for our EAI services as well!
Working with brand new technology that is predominantly open source - Big data comes with a list of new technologies that are typically not in the CIOs radar. Open source technologies lead the way in big data with Hadoop, MapReduce handling big data needs of giants like Google and Facebook. However, SAP and Oracle have too entered the fray with HANA and Exalytics. We have seen significant customer testimonials during SAPPHIRE NOW in May this year. But these are still nascent and our clients need to get themselves familiarized with these new technologies and need a lot of help in selecting the appropriate technology given their big data needs.

Purely from the perspective of scope of big data opportunities, the manufacturing sector (discrete + process) is the single largest sector. A recent McKinsey report states that manufacturing firms can expect a 50% reduction in product development and assembly costs and a 7% reduction in working capital by implementing big data initiatives. Specifically, big data initiatives provide a whole new set of opportunities for manufacturing firms. Some of these are

Building consistent interoperable, cross-functional R&D and product design databases along supply chain to enable concurrent engineering, rapid experimentation and simulation, and co-creation
Aggregate customer data and make them widely available to improve service level, capture cross-and up-selling opportunities, and enable design-to-value
Source and share data through virtual collaboration sites (idea marketplaces to enable crowd sourcing)
Implement advanced demand forecasting and supply planning across suppliers and using external variables
Implement lean manufacturing and model production virtually (digital factory) to create process transparency, develop dashboards, and visualize bottlenecks
Implement sensor data-driven operations analytics to improve throughput and enable mass customization
Collect after-sales data from sensors and feed back in real time to trigger after-sales services and detect manufacturing or design flaws

With such opportunities abound, it augurs well for us to build upon our strong competency around big data management services. Needless to say, the business opportunity is huge and the competition on these emerging services is immense; however, our focused efforts on developing tangible value demonstrators for our customers, and lend relevance and thought leadership in the big data space places us well in the market.

Creating Next Gen Social Business

2012-01-31T04:29:31Z

Guest Post by
Anjali Yadav, Principal Consultant - Salesforce.com, Infosys

As once Aristotle said, Man by nature is a social animal, a man who lives alone is either an angel or a beast. 'Social being, social health, social pyschology, social marketing, social media, social customers, social enterprises'...The word 'Social' has never been exploited as much as it is being today. And there is an inherit merit in the exploitation.

There has been cultural shift in the way we live,learn, work and play. Organizations and individual alike are looking for 'Engagement' and social media seems to be best bet to accomplish this.

Let us look at a purchase cycle which starts with Awareness of needs, Assessment of alternatives, alleviation of risks, decision and achievement of results. Every stage of the purchase cycle is driven by customer needs. Organizations are tapping into the social media to understand customer needs, buyers are finding is easier to interact with other customers for assessment of alternatives rather than follow a product campaign, buyers meet and discuss their preferences with likeminded people on the web for better decision making and alleviating risks of a purchase. Traditionally the process was marketer generated, today, the buying process is user or customer generated.

]]> Social media took off with friending and rise of personal activities on the web. When users of the web started realizing the benefits of sharing experiences and making purchase decision over the web but within no time it took the powerful shape of collaboration that has become the cause of social business.

Let us now see how social business is being generated by Manufacturing majors.

Social analytics - Social web (web 2.0) revolves around social interactions, conversations that create or act on collective knowledge. Social analytics is all about tapping this information and managing specific attributes of these conversations. Social business arises when this analytics helps us decipher the root cause of these conversations- was it the poor response time of the customer service agent, failure of the warranty process, poor mileage of the vehicle? This information feeds into the CRM processes of the organization helping them to not only quickly understand the issue at hand but also deciding what is required to fix the same.
Product innovation - Dell's Ideastorm's, Sun Microsystems' SunSpace succcesses are no hidden fact, the collaboration platforms built by these organizations fastens the communication of information between employees and provides ready access to the employee held knowledge facilitating innovation, Aerospace and auto gaints can utilize the power of web to listen to the bouquets and brickbats of their vehicle line and improvise the product line further, Toy companies are connecting with parents to create new children product lines.
Improve loyalty - Retaining customers using social media essentially means encouraging customers to build a community around your store, brand or organization. Continual listening to the messages in the community helps improve customer service, product line translating to a happy customer.Harley-Davidson's Harley Owners Group leverages the bond between Harley owners and their bikes with a loyalty program that promises a lot of soft and hard benefits to the owners while helping Harley to open new revenue streams such as tie-in merchandise.
Generate leads --Customer profiling, segmentation and targeted campaign management are the benefits of integrating with social media, this in turn helps quickly convert suspects to prospects and prospects to leads.IBM uses Twitter to inform customers about Webinars, podcasts, virtual trade/physical trade shows and to advertise some promotions, also sales reps keep their customers updated about upcoming events via their own Twitter accounts.

There are plethora of applications that enable social interaction and social business, more on these social apps- Radian 6, Jive, Lithium, SAS, SFDC, Social Case, MS Sharepoint in my next post.

Crisis Management in the Times of Global Manufacturing Supply Chains

2012-01-30T07:50:20Z

Guest Post by Varun Chhibber, Associate Consultant, MFG-ADT Online, Infosys

Crisis management has been the biggest bane for the manufacturers in the recent past. Manufacturing industry suffered from one crisis after another last year. First it was Japan earthquake and then Thailand floods.

The Japan Crisis caused major supply constraints for global automotive industry resulting in poor capacity utilization of plants, long waiting times, cancellation of orders etc. Similarly during the Thailand crisis many manufacturers were forced to shut down production or cut back the output due to disruption in supply of critical parts.

]]> All this can lead to long term issues if timely action is not taken. This is why there is a need of better crisis management systems as it is otherwise difficult:

a) To gauge the impact of crisis

b) To come up with appropriate Strategy to counter the situation.

Gone are the days when all the production took place at one location. Today Gadgets, Automobiles etc. contain thousands of constituents procured from all over the world. Semiconductors may come from Korea, Metals from Asia/Africa, Electronic components from China/Japan, the list is endless.

Following figure shows what all Information is required by a manufacturer in a Crisis situation:

Business value: This is where we come into the picture. We can help our partners to come up with better systems and processes to gather all this information in a form which is comprehensible to Top management and aids them in making quick decisions about corrective actions to be taken.

With this invaluable information a Manufacturer can:

ü Be better prepared for crisis situations

ü Assess the impact of the crisis effectively

ü Adopt a strategy to mitigate the impact

ü Arrange for the same components from a different location which is not affected by the crisis thereby keeping the production smooth.

ü Inform all the stakeholders beforehand about the expected delays. Quick & timely Crisis communication is quite necessary for long term partnerships.

Hope we all learn lessons from the recent events which have shown us that it can take months to assess the full impact to a global manufacturing supply chain. When a manufacturer gauges too late, they have already lost critical time giving rises to a significant revenue & reputation risk.

Electric, Hybrid or Gasoline: Illusion, Fusion or Confusion

2012-01-27T04:37:16Z

Guest Post by Jagmeet Singh, Principal, Manufacturing Management Consulting Services, Infosys Limited

Ok, so here is what the big deal is about. What type of vehicle has the lowest carbon footprint and is most eco-friendly. At first instance, it would look like electric vehicle is the best without a doubt. No tailpipe emissions and hence no harm to the environment. Well, this is not the complete picture. Rather this starts another interesting debate.

]]> What one would miss in taking that call is the source of electric energy that electric vehicle would consume for charging and unfortunately in today's world, the source is still primarily COAL and hence huge amount of carbon emissions right at the source!

By the time one deliberates the above fact, comes another verdict published by Ricardo, which claims "electric and hybrid cars have a higher carbon footprint during production than conventional vehicles, but still offer a lower footprint over the full life cycle". So shall we ignore source and production for the sake of long run and at the same time break the myth/illusion about EVs? This definitely confuses a person who would like to do his or her bit towards a better future.

So, I thought of taking help of mathematical models. And for calculating carbon footprint and environmental impact, the best approach seems to be Life Cycle Assessment (LCA). I looked into research paper, blogs, and many more articles on the subject. I read some very interesting insights ranging from battery type to vehicle weight and fuel type. And the more I read the more I got interested in the subject resulting finally into a confused verdict. Yes, that is right.

Even LCA methodology has some limitations today because of unavailability of an algorithm standard. Not only that, every input factor like country, state and local region power supply generated different results. Some purely focused on the source of power and declared verdict. Others focused on emissions in vehicle use phase and yet others talked about EOL (End Of Lifecycle) to finally make an argument.

Now, if I were to buy vehicle today it would purely be my decision as to what I consider the most important factor to environmental pollution. Be it source of energy, consumer phase, EOL or something else.

What would you consider?

Supply Chain Visibility Solutions- Means to an End ?

2012-01-26T11:27:31Z

Guest Post by

Sajit Kumar C N, Principal Consultant, Manufacturing, Infosys

The trigger for this blog was from here- an interesting and animated discussion on Supply Chain Visibility and Collaboration between Atul Chandra Pandey from Infosys and David Johnston of JDA- in the Thought Leaders video discussion hosted by SC Digest editor Dan Gilmore.

According to them, now that recession-fears are behind us to a large extend, the organizations have started focusing more on top-line growth as against cost containment which was the focus during past couple of years. Not just growth-'profitable' growth. In order to achieve that kind of growth, the organizations have to be more innovative in managing their supply chain.

]]> This innovation cannot be achieving by just looking inwards. It can only be achieved by effective collaboration with the business partners- both downstream as well as upstream. The means for achieving such collaboration are technology enabled supply chain visibility solutions and more importantly, trust based relationship.

It is no surprise that in the recent times, we had been getting number of enquiries from many of our customers on best practices in supply chain visibility solutions. The requirement ranges from basic supplier portal on one end of the spectrum to full-fledged, cloud enabled end-to-end supply chain visibility solution.

It is relatively easy to put together a technology enabled visibility solution. Visibility just requires the sharing of information and it does not necessarily calls for changes to the operational processes. With the right tools and management support, it can be implemented reasonably quickly. But the question is, are these organizations treating visibility solutions as a means to end or the end in itself? How can an organization get maximum benefit out of a visibility solution?

I believe visibility solution is really effective only when it transcends the organizational boundaries. It has to result in better collaboration among the business partners. Visibility enabled collaboration is a process by which partner organizations who see different aspects of a problem can constructively explore their differences and search for solutions that go beyond their own limited vision of what is possible. For such a collaboration to be effective, it has to have something to incentivize for both parties; should have a common overarching goal. A customer may be able to dictate that a supplier shares certain data unilaterally. That may be called a visibility solution from the customer perspective. But it is not collaboration. In such cases, there is always room for supplier to con the system with the quality, completeness, and timeliness of the data being shared. It will be much more fruitful and effective only if the benefit is mutual rather that the stronger partner forcefully peeping into the affairs of weaker partner. For collaboration to be sustainable and effective, it should be one which is trust-based.

How does Search technology boost Decision Intelligence?

2012-01-25T11:11:03Z

Guest Post by

Ketan Chinchalkar, Senior Project Manager, MFG-ADT Online, Infosys

Decision Intelligence leveraging search engine technologies and text analytics is the revolutionary and new approach of decision intelligence by exploiting the enterprise information assets and the unstructured web content. It started with the vision of addressing Business Intelligence platform limitations, but then it started redefining the field of decision intelligence by merging Business Intelligence (BI), Competitive Intelligence (CI), and innovative and new technologies derived from the search engine market. We all know that, BI encompasses a range of IT tools, usually accessible through a common BI portal that aids decision-making for enterprise analysts and managers, including financial performance reporting, monitoring of current operations, performance benchmarking, marketing analytics and sales trends identification etc. CI enables the enterprise to understand their competitors' strategies, and those of other important market players, and is particularly intended to identify trends and new and potential opportunities for growth, mergers and diversification.

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BI platforms have evolved from a simple operational reporting to multi-dimensional analytical capabilities platform, but still face significant financial and technical challenges. BI platforms only process the structured enterprise information assets and do not process the large volumes of unstructured enterprise assets like emails, presentations, office documents, web pages, chat transcripts, logs etc. which have a very large potential in critical decision making for the business. The platforms have multiple interfaces for accessing various functions, needs to integrate with multiple data sources and hence make it overly complex for the business users, limiting the adoption and use. The efforts to scale and integrate the BI platforms with multiple data sources within the enterprise is highly complex, very costly, time consuming and difficult to manage within an enterprise. Also, as the ETL tools doing the input to data warehouses and data marts operate in batch mode, the decision making is not effective as it does not happen on the fresh data. Like BI, CI systems also have some inherent limitations arising from CI's dependence on huge volumes of unstructured data as an essential data source to derive competition information and trends. The web in particular has been a challenging CI data source, because of the strong dilution of the information relevance and very weak signal to noise ratio. Hence because of this automated CI systems remain fairly limited in scope and till now focus has been on customized manual research.

Technologies derived from the enterprise search market and text analytics are proving to be an ideal complements to the BI and CI technologies, as they are capable of eliminating the above mentioned technical and financial challenges and opening the door to their integration within a unified decision intelligence platform. The enterprise search engines in the market today can handle large volumes of structured as well as unstructured data and they also give a meaningful structure to the unstructured data indexed by the engines. The semantic technologies at the core of search engines are specifically designed to analyze and process textual data (unstructured information assets) and provide a meaning to the unstructured data and create relationships within the structured and the unstructured data indexed within the platform. The search platforms are scalable to handle hundreds of millions of data due to the search engine Index and Distributed architecture, which, even the strongest of RDBMS cannot handle, and that too it does with a very low TCO. These search platforms also support SOA architecture which enables rapid deployment and easy integration within the complete enterprise information ecosystem like enterprise databases, BI back ends, file shares, email systems, web content like websites, microsites, blogs, forums, communities etc. and enterprise systems like ERP,CRM, CMS and legacy systems etc. Along with the advanced technology, search platforms also provide simple and user friendly interfaces with natural language querying, intelligent querying and browsing options, collaboration and rich graphical tools capable of doing multi-faceted navigation.

Unstructured data sources are heterogeneous and widely dispersed inside and outside the enterprise firewall and hence the challenge is to locate the exact and meaningful resources, and to extract, classify, and exploit the useful information they contain from the point of view of decision systems, e.g., effectively detecting named entities, identifying patterns, enriching thesauri, performing semantic analysis, dynamically creating content summaries etc. The unstructured analytics in the search engines work by autonomically transforming non-structured textual data into structured information using semantic analysis techniques drawn from artificial intelligence, including:

Automatic language detection
Lemmatization, or the intelligent recognition of the form and variations of words from a language, i.e., feminine or masculine, plural, conjugation state, adjectival usage etc.
Advanced phonetic recognition to manage typographical errors, inversion of letters or letter groups, homonyms, synonyms etc.
Personalized semantic filtering, adapted to the ontological context of each enterprise
Semantic analysis, detection of lexical forms (patterns), recognition of named entities (people, places, times, dates etc.), integration of business thesauri (ontologies), and creation of specific business context semantic rules

The traditional decision intelligence systems can answer the question like "Which product was the top seller for the last quarter" but would not be able to answer prognostic questions such as "Which product is likely to attract the highest number of consumers in New York two months from now". The second question will need analysis of data within the enterprise boundaries and also a deep analysis of data outside the enterprise boundaries to detect the latest trends and sentiments of people to yours and competitors' products in New York and also recent trends which can influence the buying process. The search technology exploits new data collection, processing, indexing and access technologies that remove the existing technical and financial barriers associated with leveraging unstructured data in traditional BI systems. This will enable the enrichment of BI platforms with emotive analyses and product or brand popularity using the information available in an unstructured format in blogs, forums, press sites, dedicated web sites, testimonials, buyer comments, communities etc.

Let's consider, another example, the case of a business analyst, studying factors that may explain a marked decrease in maintenance contract renewals for a specific product.

With the decision intelligence platform leveraging search technology, the analyst can:

First of all, locate the period in which there is a sharp decline
Search customers that have chosen not to renew the contracts
Look at e-mails containing requests or complaints sent to the company by these customers, and, if desired, view text transcripts of telephone conversations between these same customers and the company's customer service representatives
Search for the names of competitors possibly contained in these documents
Seek out data on the company website blogs and forums, where customers have talked positive or negative about that product
Seek out data on the Web containing special offers or promotions offered by these same competitors
Seek out data on the Web containing blogs, forums, communities where people are talking about that product and the competitor's similar product. The platform is capable of doing the sentiment analysis of yours and competitors' products and this emotive analysis will definitely help the business to understand the factors of declining sales
Create an overall report for the top management, sales and marketing, maintenance departments with the data collected from the platform in terms of graphical visualization and data exports.

Some specific examples of this platform in Manufacturing domain can be, to detect the maintenance and manufacturing problems by processing unstructured data such as repair logs and service notes. Manufacturing organizations can also leverage this platform for global data aggregation, dashboard presentation and analysis for the Production Control Organization, analyzing data pertaining to Inventory Management, analyzing data pertaining to the relationship between various entities like Suppliers, customers, automotive parts etc. thereby enabling more effective crisis management. Organizations can also use the platform to analyze and study the market sentiments for their products and services by aggregating the web and the social media data and can have a single unified dashboard which provides them with a 360 view of their data within the enterprise and data related to their and competitor products on the social web.

This market of decision intelligence leveraging enterprise search and text analytics is massive and many traditional BI vendors have still not fully switched on to the value of this market and hence we see many fairly unknown vendors (at least unknown to the traditional BI professionals) pushing into the BI market and claiming market share. Vendors such as Endeca, Fast, Exalead, InXight, Attivio, and ClearForest etc. are all doing well in this space of decision Intelligence using Enterprise Search and Text Analytics. It is no surprise that BI vendors are starting to introduce partnerships with these relatively new kids on the BI space and we could see more acquisitions possibly occurring in the next 12-18 months. We already know that FAST got acquired by Microsoft around 2 years back and lately we have seen Endeca being acquired by Oracle as a major game changer in this space. Watch out how this market grows in leaps and bounds in the coming months & years and how major players like Oracle, IBM and Microsoft etc. strategize to acquire the huge potential of unstructured data.

Supply Chain Visibility and that too in the Cloud - Even Santa is at loss!

2012-01-18T08:37:28Z

Guest Post by
Sachin Bery, Principal Consultant, Consulting & System Integration Unit - MFG, Infosys

After a great holiday season and chance to be with family, its time to be back with "business as usual". The only thing is that there is no "business as usual" today. It's the vagaries of various variables which have made the area of Supply Chain Management in particular a very dynamic one. While this is an opportunity for innovations to happen, it's a constant source of sleepless nights to our clients and us as well as we search for the solutions & not a sleeping pill.

]]> One-Solution-Fits-All" paradigm that can be prescribed to our clients. Lets look at one of the factors which is affecting the supply chain - Globalization. There is nothing new about this and we all have heard about this. This means working with more global suppliers, reaching out to more global customers and dealing with more global competitors. This in turn means need for effective communication mechanisms to make sure that all the cogwheels of the "Supply Chain" work together - in tandem. If this challenge was not enough, the economic environment has made it mandatory for such companies to look out for alternatives to stay informed and in control of their supply chains while able to contain their own costs.

Net-Net , the 3 point agenda is -

Have better visibility into the supply chain and its players
Manage "your" supply chain uniquely
Reduce the overall cost in the process

"Cloud based Supply Chain Visibility" solutions are the life-saving drug here. According to "Aberdeen Group Report: Enabling Supply Chain Visibility and Collaboration in the Cloud, November 2010", supply processes can be classified into two buckets:

Enterprise Centric - Demand Management, Transport Management, Sales and Operations Planning, Network Design
Multi-Enterprise Centric - B2B Connectivity, Supplier Collaboration, Customer Collaboration

The same report also talk about the top metrics which we all know represents successful Supply Chain performance - Customer Service, Cash-to-Cash Cycle, Order-to-Delivery Cycle, Time to Onboard Trading partners (both which are B2B/EDI enabled and those which are not).

A closer look at this metrics reveal that there is a need to careful see how the data flows into these metrics - this flows both from Enterprise Centric and Multi-Enterprise centric systems. I am not saying that we need a unified solution - no this monolithic monster will make the supply chain sluggish. Instead we need a "coupled" solution that works within and outside the organization and which means it need to be "Hybrid" in execution (combination of on-premise and on-cloud solution - more of this in a separate blog as idea of this blog is to sensitize you on the need and not truly give a cookie cutter solution). There is no "recommended" solution around this today as each has its own positives and negatives (depends from where are you looking at it and which product vendor has more than fair share of your mind).

This response in one of the forums summarizes the state of where we are in terms of "cloud based solutions with real time visibility for supply chains"

This year, I asked Santa for a cloud-based solution with real-time visibility for my supply chain, but instead he left 7 e-books, 6 white papers, 5 Six Sigmas, 4 blog posts, 3 business cards, 2 RFP's and an un-evolved S&OP under my tree. Next year, instead of cookies and milk, I'm going to give Santa a perfectly accurate forecast.

This means that SCV solutions need to be "UNIQUE" to the organization and serve as a differentiator for the organization. There is a quote from President and CEO of a third party logistics provider Skyway Freight Systems Inc.'s - Charles Loundsbur - "Companies do not compete. Supply chains compete" and how true is this in current context.

While it is important for bringing in best practices, its equally important to consider the entire supply chain as a "living organism" with each player as a vital organ and the networks as the nervous system. In other words the solution need to be "As standard as possible and as different as needed" and that's where we can help you achieve a solution which is "for you" but not "only for you". Get in touch and I can share more on this...meanwhile soak into the bright new start of this year!

Thou shalt continue 'lean' ing in this new year

2012-01-11T04:53:34Z

Guest Post by
Ajit Mhaiskar, Principal Architect, Manufacturing, Infosys Technologies Limited.

Last week, I ran into an interesting post from MRP Systems analyst Derek Singleton titled "How Manufacturing Software Should Adapt to Support Lean Principles". As I pondered on the points mentioned in the blog, I got thinking about the various situations I have encountered in this context. In my opinion, the complexity of today's supply chains remains one of the biggest challenges facing manufacturing corporations across the world. The supply chain complexity is also one of the biggest hurdles in adopting lean principles fully across the manufacturing value-chain. The challenges posed to lean adoption also change based on the type of manufacturing.

At one end of the spectrum, we have several large hi-tech companies with constrained production capabilities that are coming out with block-buster products (mobiles, tablets, music players, cameras etc) with short shelf-lives. The biggest challenge for them remains getting the product out of the door as quickly as possible with the best quality and into the hands of the super-eager consumer. Lean principles most likely take a back-seat in such situations where time to market becomes the single most important thing.

In the middle portion of the spectrum, we have process manufacturers and resource providers where the nature of the process can pose significant challenges to applying lean principles.

At the far end of the spectrum, we have automotive and aerospace companies who have relatively longer product evolution cycles and long shelf lives (with mature, evolved processes to boot). Lean principles mean a whole lot to these enterprises. In discrete/industrial manufacturing, automotive and aerospace sectors, strong focus on lean supported by appropriate software can be a big game-changer.

The right software has a big role to play in the adoption of lean. With almost all large discrete/industrial manufacturers already having embraced ERPs extensively, Going Lean the ERP Way can be crucial to ensure success in the adoption of lean. This change will entail process level lean initiatives as well as utilizing right tools and techniques offered by ERP packages to reduce waste.

Manufacturers can also make their supply chains leaner through integrated planning using the ERP and maximizing benefits. Manufacturers can also consider adoption of business platforms or bespoke application development to make the supply chains leaner.

Technology has massive potential to deliver lean improvements through digital manufacturing capabilities. My colleague ST Muthuvelan, Principal Consultant, Lean Manufacturing Systems and Engineering has an article published in Managingautomation.com, wherein he illustrates how technology can deliver transformational value through PLM implementing lean principles and that being complemented by Manufacturing Execution Software (MES) that also adopts lean principles. According to him, manufacturers can minimize wastage and address situations such as muda (non value-added activities, or waste), mura (uneven operations) and muri (overburdening workers) through MES and lean concepts.

Wishing all the readers a very happy new year and all the luck with your muda, mura and muri!

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Integrated Manufacturing Analytics can provide higher profitability and customer satisfaction

2012-01-09T04:45:13Z

Guest Post by

Yogesh Bhatt, Principal Technology Architect, Manufacturing, Infosys

Most manufacturing organization struggle when it comes to relating the business objectives to the day-to-day operational measures, until that gets too late in the game resulting in sub-optimal performance, quality of delivered goods and in ability to take right decisions when they had to be taken.

]]> The manufacturing landscape today is not just limited to delivery of finished products, it involves integrated solutions like inventory optimization, after sales services, customer services and support, logistics management, demand forecasting, supplier and vendor management & financial planning. The key to being a successful Manufacturing enterprise in todays world translates to having right performance measures/metrics visibility across the business process and supply chain.

The problem doesn't lie in ERP systems not being capable enough to capture the information from multiple specialized systems, but the challenge is with the gap between business objectives and the way the business processes are being defined. Employees struggle across the supply chain to get this right, and focus energies on performance values that allow for improving performance, productivity and thereby profits. Instead most of the manufacturing organizations today spend their majority time reconciliation information from various systems, and trying to have a visibility that's not defined and linked. Performance measures can be under three categories for operational business processes viz sustain, control and improve. Those measures should ideally be the enablers and key decision points for employees to take corrective actions, pre-empt the process chain challenges or react to situations.

According to the MPI (Manufacturing Performance Institute) few of the key measures by category are defined as which can help every organization link their strategic objectives, control operations better, drive improvements, better supplier visibility and customer satification:
1. Sustain Production Activities - Measures to ensure that current production run can be sustained and products can be delivered
a) Capacity and Availability : Lingers around the question of demand and supply, do we have enough operational capacity to support the customer / business demand activities?
b) Customer Demand : Sales and marketing forecasts today are able to accurately predict the demand side, however it's not easily consumable by the production level operations and if only it's given as a heads up by sales/marketing
c) Material and Labor requirements : Do we have sufficient inventory of required material, or are we in access of material in which case the cash flow of the organization becomes an issue? Even if the supply side is able to generate finished goods, does the sales/marketing has an insight into those details becomes critical. Similar challenges are faced by the HR deparments towards ensuring there's adequate labor available to deliver the demand. This can't be in isolation of demand and production expected outcomes.

2. Control & Improve - Measures to ensure that there are appropriate controls to ensure profitable products being generated, and compliance controls as defined by busienss processes, external regulatory authorities are being adhered to.
a) Compliance and Environmental related health standards
b) Speed & Agility - becomes critical for organizations to measure manufacturing lead time or product cycle time, and order-to-ship lead time. This also help to provide right inputs for process improvements and better customer services by reducing lead times where ever there are opportunities available.
c) Reliability - of machines, processes and people becomes a critical component to measure the effeciency of production life cycle
d) Inventory Turns - Frequency of inventory turn overs in production is a key measure of the effeciency and cost effectiveness of the inventory process
e) Aggregated measures - such as Overall Plant Effeciency (OPE) as defined by MPI, which is effectively a multiplication of OEE (Operating equipement effeciency), LOE (Labor operating effeciency) and Capacity

No doubt data certainly exists, it's just the organization transformation that's required to convert this data into information insights and present the right data to the right audiences at the right time. Sounds simple and is achiveable only if the processes and systems are integrated right from raw materials inventory to customer satifaction goals of organization revenues/profits. Not only the information insights required, it's equally important to share the same across the supply chain and that includes your suppliers/vendors and customers too - of course in the context of respective audience.

An Integrted solution like "Supply Chain Visibility" across the lifecycle is the mantra to resolve those bottlenecks, and ensure the profitability, customer satifcation and optimized inventory for Enterprises.

Sustaining supply chain by optimizing supply chain communication

2012-01-06T07:04:57Z

Guest Post by

Ganesh Subramanian, Lead Consultant, Manufacturing, Infosys

Supply chain objective is to have the right material in the right quantities at the right time, at the right place and at minimal cost. Supply chain network has to function with suppliers, internal organizations (Marketing, Sales, Planning, Manufacturing, Quality and Engineering change control), distributors, retailers and customers. These stakeholders may be locally or globally located. Having proper communication methodology is vital for supply chain success. Someone said 'Change is inevitable' & another said 'The only constant thing in life is Change'. In High Tech industry, I believe that in a span of 18 months, a processor size reduces by half and its speed increases twice. For example, the mobile phone that I bought last year (latest model) is one of the oldest models today. It becomes more complex to meet supply chain objective when one or more changes occur in the value chain.

]]> Few disasters of not having proper supply chain communication:

· An engineering change communication not reaching a Tier 1 supplier at right time which leads to huge obsolescence cost

· Quality rejection of entire lot not reaching Manufacturing at right time which leads to productivity loss & Planning which affects customer delivery commitments

· Capacity constraints not available with Sales at right time which affects annual revenues & increases back orders

While modeling a supply chain process, one has to ask - What to communicate, when to communicate, whom to communicate & how to communicate?

What to communicate? - What information should be communicated & what response actions are required?

When to communicate? - What point of time the communication should happen?

Whom to communicate? - Which stakeholders should be communicated?

How to communicate? - What communication channel to be used?

Over the years, different ways of communication includes - telephone call, letter, telex, fax, email & EDI. Thanks to technology advancement where communication is instant thru automated work flows, stakeholders are available mostly 24x7 thru mobile devices and quicker decision making due to latest information accessible thru applications globally. Revisiting the supply chain communication process at regular intervals plays vital role in harmonizing supply chain process.

It is also very important to evaluate return on investment before implementing high tech communication process that involves highly customized work flows, high cost mobile devices & high integration cost due to usage of web services.

So what will be new in Manufacturing Supply Chains in 2012?

2012-01-05T03:37:46Z

Guest Post by Sandeep Kumar, Industry Principal and Head, Infosys Management Consulting Services, Manufacturing, Asia Pacific, Infosys Limited

Not all will be new ... a lot that has been said about traditional manufacturing supply chains and their needs still holds true. Tags like Lean, Responsive and Agile will continue to remain top of the mind for Supply Chain strategists - functional silos in leading manufacturing firms continue to give way to supply chain champions who are focused on optimizing the complete "order to delivery" cycle. The concepts of realizing "Perfect Orders" and "Zero Grief Orders" in order fulfillment will continue to drive supply chain optimization efforts leading to enterprise supply chain re-engineering and mass adoption of technology. Supply Chain pioneers like Cisco, Dell and Apple will continue to relentlessly focus on leaning their supply organizations. The promise of supply chain orchestration will continue to drive investments across the globe.

So what's new? A few observations from the trenches...

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· There seems to be a definite uptick in European and Asian companies investing more and more into supply chain optimization. Large-scale efforts to drive enterprise business process standardization and supply chain application architecture seem to be high on the agenda of many European Manufacturers in the Industrial Manufacturing sectors. Many Chinese companies are re-examining their supply chain priorities as they are challenged by the need to have a complementary focus on the growth stimulus in the domestic markets in addition to the exports market. Traditional supply chain priorities like growing centralized forecasting and planning capabilities and driving inventory optimization initiatives are critical elements in their supply chain strategy.

· Leading supply chain proponents are putting in place a cross functional product supply organization or a Supply Chain function that now sits across the functional silos of purchase, manufacturing, distribution and logistics, sales and post sales service making sure the pieces are integrated and orchestrated. It is not uncommon today to hear of Global Supply Chain functions that are now assuming more and more centre stage.

· Emerging capabilities clearly align towards the need for creating various business views that meet the risk, control and compliance objectives of the enterprise. As an example, supply chain risk management, supply chain sustainability and green supply chains are business requirements that are driving more and more the need for data orchestration, regulatory compliance and the conformance to a "Code of Conduct" across the supply network. Leading supply chain innovators like Cisco are investing on Supply Chain Risk Management tools that are helping drive business continuity in the face of supply chain disruptions that are now recognized to be inevitable in today's global environment. Geographies like Australia where the per capita carbon emissions are among the highest in the world are imposing regulations like carbon pricing in a phased time-bound fashion driving the need for large metals and mining companies to start investing in sustainability and green.

· Supply chain orchestration is no longer only the OEM topic. It is interesting to note that different parts of the supply chain are driving the integration process in their drive towards becoming more central to their customer supply chain goals of becoming faster, better and cheaper. As an example, leading Conformance (QA/ QC) service providers like Bureau Veritas and Intertek who work closely with the quality management and sourcing organizations of their clients are designing new information service capabilities leveraging their positioning in the value chain and the information assets (Testing, Inspection and Audits data) they own, to engineer and provide quality supply chain advisories. Supply chain intermediaries like distributors and contract manufacturers are investing heavily both on their demand and supply side to ensure visibility and collaboration.

· There is no one recipe for success and supply chain models need to be continually configured to meet their supply chain strategic objectives. A Samsung or an Inditex are pulling together vertical integration capabilities as a response to driving quick time to market on product innovation. On the other hand, companies like Cisco and Apple continue to have global sourcing organizations that need to be virtually integrated. Tracking Supplier performance through real time integration of data from suppliers is becoming a necessity in globally dispersed supply networks through adoption of supply chain dashboards and cockpits.

· Managing Information seamlessly in Supply Chains continues to be the source of competitive advantage. I would wish to differentiate Information from data here - there is no paucity of data today in our supply chains that crunch out zillions of supply chain transactions and events every day. However good quality data (with all necessary attributes of currency, granularity, correctness, etc) that drives quality informational insights and decision support is still a highly valued asset. Most manufacturing companies continue their relentless focus on getting their information models right across transactional data and master data elements to drive enterprise information models that are capable of providing the needed operational supply chain performance management capabilities. Investing on new channels of information delivery (including self service) and distribution across supply chain networks are gaining more and more credence especially for the large OEMs.

It was also interesting to read the 2011 Gartner top 25 Supply Chain report and the capabilities listed there and I look at that as a "must read" every year - offers great insights into what the leading supply chain innovators are focused on - themes of supply chain resilience, value chain network integration, orchestration and last but not the least, supply chain vision and sustainable execution against the same.

Can Biomimicry help us in designing better Supply Chains?

2011-12-30T07:17:52Z

Guest Post by
Sachin Bery, Principal Consultant, Consulting & System Integration Unit - MFG, Infosys

It's that time of the year when we need to think of what we did right and what we need to do right in next year. While thinking over this line I realized that I need a new teacher...someone who has experience that is unparalleled. It is said that there is no better teacher than nature and humans have evolved over the years learning from this very source of knowledge - be it the desire to fly, swim across the great oceans or make home for self. In every aspect of today's human life there are instances where innovation and invention were born out of nature's womb. Supply Chain area is no different!

There has been millions of paradigms, frameworks, execution models, planning approaches and management controls which have been suggested and implemented, and they have led to maturity of this space to the level where it stands today. However, I believe that beyond the obvious and the "need-driven-reactive-strategies" in Supply Chain there is a need to look at this area as a natural extension of nature's preaching and execution approach which has been perfected after trial and error over millions of years of evolution to reach where it is today (and needless to say, its still evolving)...welcome to the concept of Biomimicry!

]]> The water cycle and Supply Chain
One of the first concepts taught in elementary school is the water cycle or hydrological cycle which describes the movement of water (across various states) on Earth. The only constraint being the total quantity of water available on earth and every else being driven by factors and parameters like Sun, Temperature, Gravity, Topography, etc. Without going into the obvious details of this cycle, I would like to bring to focus the learning we can imbibe, understand the key players in the water cycle and how this can help us rethink the Supply Chain from Manufacturing perspective. I will cover some aspects in this blog and go into details of the components of water cycle and their teachings in the next blog and how IT solutions can help in creating a difference .

There are multiple players on the stage
Nature also has its own way of making all the cog-wheels work together in sync so that the consumers (humans, flora and fauna) can go about the cycle of life while consuming the inventory (water) and use that to produce (manufacturing) main products (plants produce fruits/vegetables for example and others contributions to food chain)and by-products (plants release Oxygen) and wastes (which is also used in some form). Excess inventory (underground water) is also managed well while maintaining its quality and excess water (underground flow) goes back to source (water reservoirs) while forming the geography that enables the cycle again.
Key Message: In Supply Chain, no one is less important. Aspects of Globalization need to be understood well as each player has its own key role in making the overall process more efficient . Competition and Price pressures are the drivers for bringing in efficiency the way Sun and Gravity help in driving the water cycle. The water cycle is complex and so are our Supply Chains. It's the interconnects which are most important and hence SRM. e-commerce and CRM are here to stay and grow in its importance. And needless to say it will not be done without incorporating the 'social' strategy in the supply chains (more coming up in separate blog on 'Social SCM')

Nature's Perfection - Delicately poised'
It is amazing perfection with which the entire cycle is repeated including time when it rains/snows in each region of the world. There are short term aberrations but all-in-all it's a well-oiled machinery. If we consider just one weather phenomenon called Monsoons, the parameters are immense (6 parameters each in 2 sets with defined correlations and subsequent upto 13 models for predictions - more details New statistical models for long-range forecasting of southwest monsoon rainfall over India) and still its difficult to predict.
Key Message: The point here is that supply chain forecasting and optimization, supply-demand matching will be of prime importance till we have perfected these predictors, there co-relations and models and still there will be 'calamities'. Even after having the models right, there is need for all supply chain participants to "communicate" effectively with each other to make the entire supply chain move effortlessly.

Calamities are bound to happen
While this water cycle sustains life on earth, it is also the main reason for all weather phenomenon be it floods, storms, landslides, etc. The other way of looking at these things is that this is nature's way of adjusting the water cycle and thereby the global climate while maintaining a 'delicate yet sustainable' equilibrium.
Key Message: There is a need to ensure supply chain flexibility and to shape the requirements for high performance supply chains. Need for IT and analytics as an enabler in such initiatives or decision making can't be undermined. Systems need to self-correct, warn, alert, take decisions and take them fast to take care of such 'calamities'.

It's a close loop in nature
It is very important that we look at the supply chain as a "closed-loop" which has no start or end. It's a process with a remarkable level of perfection considering the scale at which it operates. As humans, we did not look at it in whole but in parts and its this disconnected thinking that lead to issues in Supply Chains. Nature always ensures that the cycle is completed and in this case of water cycle the water comes back, after its journey across states (solid, liquid and gaseous), to the water reservoirs while improving the quality of water.
Key Message: There is need to focus on both the reverse logistics as we try and close the loop while laying our focus on Green Earth and commitment for Sustainability. Also, the word sustainability has to move from need for "regulatory compliance" and "satisfaction to customers" to something more internal driven and seen as an opportunity to do business profitably while creating a strategic differentiator for the firm itself.

Food for Thought...
I would leave you here with this thought as we end this year on a note of hope of a better year ahead. I will get back at the start of new year with new hope for improvements in the way we manage our Supply Chains by respecting the nature and learn from the new teacher. Enjoy the new year eve and pass a quick thank you note to nature as well. Do let me know if you think this makes sense and help me also learn in the process.

PDCA Cycle to Manage Supply Chain Risk

2011-12-29T09:24:24Z

Guest Post by Sajit Kumar C N, Principal Consultant, Manufacturing, Infosys

Sometime back, I had blogged on how supply chain risk perception by US manufacturers is driving them to take back all or at least some part of their manufacturing operations from low cost countries like India and China. The reason for this is said to be not only that labor arbitrage opportunities have become less attractive due to increasing wages in these countries. These organizations have also begun to think that cost associated with supply chain risk in such global operations does not justify the returns. I believe that instead of such knee-jerk reactions, what the organizations should be really focused on is creation of a mechanism to contain the Risk and global uncertainties.

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I believe that in order to thrive in Supply Chain Uncertainty (I prefer this term to Supply Chain Volatility- Uncertainty is more fundamental concept), the first step is to recognize and accept that uncertainty does exist and then factor-in uncertainty into the business models. That would help bring in some predictability to the supply chain.

In these days of globalization and outsourcing, the value chain is getting longer and longer. Many products would have circled the world several times by the time we buy them from a retail shelf. The omnipresent risk in supply chain is now forcing us to re-look at our supply chain models and metrics.

Recently, I read this interesting quote somewhere- "Essentially, all models are wrong, but some are useful." Very true- models are, after all, just models. Supply Chain models can be used to generate good plans. But various parameters like demand volatility, globalization, escalating customer expectations, shortening product lifecycles etc. which impacts the plan are all changing so dynamically, that we need to constantly re-evaluate our approach.

Einstein's definition of insanity is "Doing the same thing over and over again and expecting different results". Same can very well be extended to usage of supply chain planning models. What we need is a mechanism to identify deviations and implement course corrections on a continual basis.

"Life is uncertain; eat dessert first"

- Ernestine Ulmer, an American writer born in 1925

What I like about this quote is that it epitomizes the radical shift in our approach towards life based on realization of uncertainty associated with it. If we were to extend this to our current context, it emphasizes the value of being able to detect quickly when and where the plan does not intersect with ground realities, and then be able to respond quickly and profitably.

What we need to manage the supply chain risk is a Deming cycle or PDCA cycle based approach. PDCA - Plan - Do-Check- Act was made popular by Dr. W. Edwards Deming, who is considered by many to be the father of modern quality control. It is an iterative four-step management method used in business for the control and continuous improvement of processes and products. Instead of insisting that the PLAN is sacrosanct and focusing all our energy and effort in measuring metrics like Plan Conformance, Plan Accuracy et al, we should consider Plans as only directional and should develop skills to react to environmental changes which affects the plan. What is needed is a marriage of skill to "Predict" and skill to "React". We need to focus on and measure metrics like Average Time-to-Identify a problem; Time-to -Correct the problem.... ATI, TTC - for those who are obsessed with acronyms!

Show me some Green

2011-12-20T05:01:46Z

Guest Post by Jagmeet Singh, Principal, Manufacturing Management Consulting Services, Infosys Limited

Last time when I was in the US, my interaction with friends while shopping, were mostly identifying the right price of an item or how many Greens (dollar bills) it would cost? And as part of the conversation we also discussed various evolutionary modes of payment like credit cards, gift cards, debit cards, pre-paid cards and so on. Among all these, what intrigued me was how a simple looking plastic card can replace our hurdles of carrying Cash/Greens. And whatever form these cards may come in, they would still be made of plastic. And we all know plastic cards are made up of PVC (Poly Vinyl Chloride)! Does it ring a bell? PVC - a toxic compound that produces carcinogens and toxins including chlorine residue and heavy-metal pollutants.

]]> Even worse, when burned, PVC releases dioxins and gases such as hydrogen chloride. And ever wondered what happens to these cards after we discard them? Yes, they end up in landfill contributing millions of pounds of plastic to the waste stream impacting the environment and increasing global warming. So, either way one Green resource is taking away another Green resource.

Moreover, the life cycle of a product like a plastic card is also very interesting to look at. It follows exactly the same life cycle stages as of any other product , stages of concept, design, develop, assemble and ship. Each lifecycle stage governs and complies with regulations either driven by local laws or product needs or both. Complying or meeting regulatory requirements, for some, is product compliance and for others, it is a mere fulfillment of market needs. However, both are narrow in approach. And they do not take care of larger impacts on the environment, planet or eco-system. Unless, a product is holistically mapped to People, Planet and Profit impacts, it would be wrong to declare it as a compliant product.

So, for plastic, raw materials mostly come from petroleum and natural gas, both of which involve extraction. Post extraction they undergo a chemical synthesis process to get to a defined shape. After the shape has been defined they undergo an assembly process where chipset and magnetic tape are fixed on the card. Cards are then shipped to the requestor (mostly banks) and from there, they are again shipped to the customers. A study commissioned by MasterCard revealed "If the credit card industry worldwide produces roughly 1 billion cards per year, the study found that the total annual impact of credit cards would be 21,000 tons of CO2".

Now, if a small item like card can do this much harm to our environment do we need any more data to remind ourselves about environmental responsibility.