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Collaborative Manufacturing, Internet, Emerging Technologies, Productivity, Security,
Supplier Selection, RFQ, Automation Systems
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Dot.coms may be dead, but the concept of Internet-based collaborative manufacturing is
rapidly gaining momentum. Savvy manufacturers are now asking if the supporting
technology is in place to make it possible. Are suppliers ready with products that enable
collaboration? Most importantly, are other manufacturers and their partners embracing
the concept and ready to put resources into it?
Primary concerns for users include the role of the automation system in the adoption of a
collaborative manufacturing (C-manufacturing) model, the impact of the Internet on
automation systems and plant security, and successful strategies for supplier and system
selection and RFQ preparation.
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Collaborative manufacturing is the hottest topic in manufacturing, and with good rea-
son. Manufacturers increasingly view tight collaboration with their suppliers and
customers as a means of achieving strategic corporate objectives ranging from greater
profitability to improved agility. ARC’s recent
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brought together suppliers, users, and integrators
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no means dead, but many of the failed dot.coms
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tion portion of their business. With a renewed
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focus on growth, profitability, and earnings, manufacturers are moving to migrate their
production operations into a collaborative partnership with internal and external suppli-
ers and customers.
Huge amounts of money can be saved through increased collaboration. The savings for
US manufacturers alone is on the order of $500 billion. These savings stem from dra-
matic cost reductions in inventories, fixed assets, and supply chain processes through the
often Internet-based coordination of supplier, distributor, and workforce activities. Col-
laboration forms the necessary basis for successful outsourcing, while e-portals and e-
markets facilitate further collaboration among manufacturers, their suppliers, and cus-
tomers.
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Software supplier i2 emphasized that numerous corporations have begun to outsource
any function that lies outside of their core competency. Functions ranging from sub-
assembly manufacturing, inventory management, customer returns, logistics and trans-
portation services are now handled by outsourcing partners that make up key
components of a virtual enterprise.
Golf equipment maker TaylorMade is striving for the lofty goal of next day delivery of
custom golf clubs. Bi-directional collaboration and end-to-end visibility from suppliers
through to customer inventories is seen as the key enabler to quickly detecting and act-
ing on changes and achieving this business objective.
ABB highlighted the migration of automation supplier offerings to
7KH $%%'XSRQW UHODWLRQVKLS DW WKH supply chain products and services. Their decades-old automation
SURGXFWLRQ OHYHO KDV H[SDQGHG LQWR partnership with Dupont has now blossomed into a supply chain
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alliance due to the increased need for integration from the plant
floor to the supply chain. Manufacturing-centric companies like
Dupont need manufacturing floor visibility and synchronization to reduce costs and in-
crease responsiveness. Besides the technical aspects to the relationship, Dupont pointed
out the close collaborative relationship between the two companies has allowed the
company to evolve and improve their business processes without being locked into a
single “best practices” approach. The collaboration includes e-procurement and e-
manufacturing services that allow ABB and Dupont to communicate efficiently through
Dupont’s portal.
Many high tech companies have found outsourcing or virtual manufacturing to be one
way to achieve higher asset performance, a desirable characteristic that is rewarded on
the world’s financial markets. According to Sequencia, many in the process industries
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can raise their market valuation by adopting virtual manufacturing as a way to become
more agile, while customer Eastman Chemical is evaluating what effect down stream
manufacturing will have on their business. As consumer products companies become
more demand-pull based, it will inevitably affect raw materials suppliers upstream who
need to deliver a more agile response to demands for specialty chemicals.
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One of the beauties of the Internet is its ability to transfer content-rich information in an
easy-to-access yet secure manner. This ability to transmit and share information pro-
vides an environment for interaction and collaboration among selected participants.
These capabilities are now fostering completely new business models for how manufac-
turers can remotely manage their operations. One of the rapidly rising business models
that facilitate such remote management is Web Hosted Services (WHS). While adoption
of WHS for manufacturing applications will lag adoption
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allows manufacturers to more rapidly implement new
software technologies and access expertise that would be
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prohibitive to support on a full-time basis.
The Chairman of VerticalNet focused on how a successful collaborative Internet strategy
must focus on the four C’s: Community, Context, Content, and Commerce. These four
C’s were deemed to reflect how business is actually conducted and leaving any out crip-
ples the opportunity for true, open collaboration. He further pointed out that fear, some
of it justified-but much of it not, is one of today’s biggest hindrances to such collabora-
tion. This fear is of sharing information, yet only those manufacturers that are capable of
taking some calculated risks in sharing information will evolve into a collaborative e-
manufacturing operation.
Ability to show some real cost savings is often the proof needed for a manufacturer to
adopt a new strategy, and remote plant management is no different. Williams Energy
and Invensys discussed how they are applying plant performance measurement metrics
and remote plant management techniques to achieve some very real, quantifiable bene-
fits. Williams has consolidated the management of 3 separate gas plants which has
resulted in annual savings in excess of $1.2 million. Not all has been smooth for Wil-
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liams, however. Technology implementation is the easy part, but getting people to
adopt a new paradigm is difficult and time consuming.
Security is a primary concern of manufacturers who are considering a WHS solution, but
security at US Oil Refining is improving since implementation of the IndustrialEvolu-
tion WHS. Moving to a WHS allows US Oil users to access plant information anytime-
anywhere through a web browser. Security has increased through the use of encryption,
the elimination of unauthenticated modem dial-in, an ability to have an audit trail of all
users who access the WHS, and letting users view “live copy” of plant information via
the WHS rather than direct access to the plant system.
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A rapidly-evolving technology platform is the primary enabler behind the push toward
collaborative manufacturing. While use of the Internet is a given, several speakers
delved into the benefits of connectivity with the lowest levels of the plant floor hierarchy
as a means of enabling not only collaborative manufacturing, but also e-productivity.
ARC laid the groundwork for this discussion by providing updates on Ethernet, Field-
bus, and wireless networks and their role in the automation architecture of the future.
Wireless LANs were deemed the ultimate winner as they will ultimately replace control
networks, fieldbuses, and possibly even device-level networks.
Microsoft’s latest technology platform announcement, .NET, has met with some confu-
sion among manufacturers who poured significant investment into the company’s DNA
for Manufacturing architecture. In its effort to position .NET as the
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EULQJ GLVWULEXWHG FRPSXWLQJ WR crosoft stressed that .NET’s ability to bring distributed computing to
,QWHUQHWEDVHG FROODERUDWLRQ the Internet extends beyond the intra-enterprise focus of DNA-M.
EHWZHHQ FRPSDQLHV GLVWLQJXLVKLQJ Consistent with its longtime approach to vertical markets, Microsoft
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and device software for .NET installations while partners provide
industry-specific solutions.
Drilling down to the device level itself, eMation and customer Wisconsin Machine Tool
focused on applications that allow machine tool and other automation suppliers to re-
motely monitor and diagnose their equipment. Using a standards-based architecture
(XML, HTTP, etc.), the primary advantage pursued is again lower operating and main-
tenance costs.
Standards were cited as a primary means for Unilever to pursue its strategic objectives of
brand harmonization, simplification, and world class supply chain capabilities. With
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over 500 plants organized in a decentralized structure, the company relies on standard
processes and technologies, such as DNA-M and ISA S95, for control-to-enterprise mi-
gration.
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Manufacturers from the automotive, machinery, and food and beverage industries de-
tailed their moves toward collaborative manufacturing as a means of achieving their
own strategic objectives. ARC launched the discrete hybrid session by revealing the
results of a recent ARC survey showing that, in spite of the known fact that the Internet
fosters development of external collaboration options, most manufacturers have a long
way to go before achieving true Internet-based integration.
Rockwell Automation teamed up with the system integrator for a New Zealand dairy to
promote the need to coordinate strategic, tactical, logistic, and operational elements to
achieve enterprise optimization. General Motors and EDS jointly detailed GM’s virtual
manufacturing enterprise strategy that relies on the Internet to support collaboration and
meet internal users’ expectations of the ability to access any information from anywhere.
Information utilization is the primary enabler behind Caterpillar’s drive for increased
velocity and flexibility in its manufacturing operations. Machine tool supplier Okuma’s
response is to push total optimization, concurrent processes, agile production, and digi-
tal knowledge rather than personal knowledge.
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Adoption of common industry standard operating systems, control networks, increased
integration with business systems, and Internet connectivity have created a more open
environment that is also subject to increased security risk. ARC kicked off the process
industry session by touching upon the role of control systems as a key link in the adop-
tion of a c-manufacturing model. Siemens-Moore and customer Osram Sylvania
discussed the impact of the Internet and c-manufacturing on the design of new control
system architectures, purchasing, and configuration, while DuPont shared details of
their development of a security analysis framework as well as design and implementa-
tion of a security strategy.
FMC Airport Services and discussed their partnership for Internet-based asset manage-
ment solutions. Key advantages cited by FMC due to the use of a Web-hosted solutions
included reduced total cost of ownership and implementation time, up front capital
spending, reduced impact on IT staff, and increased scalability.
ARC expanded on manufacturers’ increasing demand for support in developing Request
for Quotations (RFQs). In the results of a recent ARC survey, primary challenges faced
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by users in preparing RFQs include lack of sufficient time for development and lack of
knowledge about suppliers and their future business strategies. Other factors included
difficulty in consensus building and lack of knowledgeable outside assistance.
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proach to RFQ development and the overall
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supplier selection process. In ARC’s view,
users should approach supplier selection not
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The focus came squarely back to the issue of c-manufacturing when SAP outlined their e-
production philosophy, which represents a shift from MES and plant-centric strategies to
what SAP calls the “E-Production” domain. SAP’s goal with e-production is to extend
Production Operations as the cornerstone for many other business processes in any
manufacturing company. SAP’s new E-Production practice consists of advisory consult-
ants with industry and domain-specific knowledge, integration architects, and
application consultants.
Honeywell Hi-Spec Solutions outlined their alliance with Suzano Paper, which includes
integration of Hi-Spec Opti-Vision optimization software with Suzano’s SAP R3 soft-
ware. Increased ability to produce to the quality specifications of the customer was cited
as a primary benefit of applying integrated optimization and enterprise software. Inte-
gration of optimization and enterprise applications also provides the ability to
accommodate each unique grade, specification, finishing property, or dimension of any
order.
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• Sound collaboration strategies are driven by clear corporate and manufacturing ob-
jectives. Crystallizing objectives and conveying them throughout the enterprise are
the necessary first steps on the road to successful collaboration.
• The Internet is having a significant impact on the way control systems are designed,
ordered, and configured. Users should evaluate potential supplier’s strategies for
incorporating Internet functionality into their control systems.
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• Developing effective RFQ and supplier selection strategies is becoming increasingly
difficult for users. Users should approach both RFQ and supplier selection as a key
business decision, not just a technical decision. Use of a knowledgeable outside
source to assist in your supplier selection is becoming an increasingly viable alterna-
tive.
• Users should not overlook the role of the automation system and its integration with
the supply chain as a necessary component for implementation of a collaborative
manufacturing model.
• Both automation users and suppliers should emphasize the use of standard tech-
nologies supported by a variety of sources in their c-manufacturing architectures.
• Security remains one of the primary concerns regarding Internet connectivity at the
plant level. Any user implementing a c-manufacturing model must implement a
sound security strategy.
For further information, contact your account manager or Chantal Polsonetti at
cpolsonetti@arcweb.com. Recommended circulation: All EAS and AAS clients.
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