DeepDive: Technology Directions - How Is Your Vision?
by Stephanie Neil
These days, manufacturers are thinking long and hard about the technologies they introduce into the enterprise. In recessionary times, those investments increasingly must follow the three “L’s” rule: They must be low-risk, low-cost, and layered.
Recognizing manufacturers’ need to do more with less, business intelligence software vendors are introducing “lightweight” tools, most of which are available in a software-as-a-service (SaaS) model. Emerging vendors, such as my-DIALS, Transpara, and PivotLink, claim these SaaS tools will empower the average user to make real-time operational and enterprise business decisions while controlling up-front costs. Not to be left out, established BI vendors, such as SAP, and best-of-breed software suppliers, such as SPSS, Inc., are simplifying user interfaces while maintaining some back-end heavy lifting in the form of sophisticated mathematical algorithms.
Of course, in these turbulent times when every penny and relationship count, companies are scanning the entire supply chain and manufacturing landscape to ensure that they are delivering the right product at the right time with quality built-in — to avoid recalls, warranties, and any other nasty and costly product problems.
While words like “optimization” and “efficiency” are often tossed about as the manufacturing mantra, managers are beginning to peel back operational layers to see what being more productive actually entails.
Before a company can effectively accelerate performance, it must have the right tools in place. And, following the trend toward lower risk and lower cost, vendors are offering new tools that layer on top of existing systems and extract actionable information.
Transpara, for example, offers a lightweight, Web-based tool that includes BI and visualization and can access existing back-end applications, from plant floor historians to finance systems. Transpara’s tool can track key performance indicators (KPIs), such as equipment utilization rates, and it repurposes the data for delivery to mobile devices — for example, a BlackBerry or iPhone. This layered approach makes larger back-end applications more accessible to the everyday user or executive on the road.
“The market is moving faster than a company can decide what to do,” says Transpara founder and CEO Michael Saucier. “The only way out of that dilemma is to push decisions down the food chain,” and, more important, “arm people with the right information.”
Similarly, myDIALS is a SaaS, lightweight BI tool that provides a dashboard in addition to some of its own business analytics. It, too, can connect to any business or operational system and pull customized KPIs into a visual display on a desktop. The result is an easy-to-understand summary of what’s happening behind the scenes in any particular operation. Customer Snap-on Inc., for example, taps into factory floor metrics using myDIALS in order to improve safety conditions.
While these two tools focus on what’s happening within the enterprise, PivotLink focuses on demand forecasting, optimizing inventories, and understanding cash flows.
The PivotLink product, delivered as an on-demand service, includes a data warehouse that collects sales, financial, and other operational data; a set of analytical tools that can generate reports against the data; and a Web browser interface for viewing graphical representations of the reports generated, which includes the ability to do “what-if” calculations.
The key, PivotLink CEO Quentin Gallivan says, is the ability to access BI for demand management in an easy-to-use SaaS model. “Traditional business intelligence [deployments] take six to 12 months. PivotLink can be up and running within 20 to 30 days and at one-tenth of the price” of a traditional on-premise application, he says.
While traditional BI vendors — from IBM to SAP — would argue that they, too, have Web-enabled versions of their products that make it easy to access information, these are typically more robust, complex versions of BI that are great for answering strategic business questions, such as whether to enter or exit a market. The lightweight versions offer a more on-the-spot vis-ual analysis well-suited to quick operational decisions.
“Traditional BI players still have value for strategic decision making when used in the hands of the business analysts,” says Wayne Morris, CEO of my-DIALS. “But [everyday users] don’t want to make the big strategic decision. They are totally focused on how to improve operational performance.”
Little Things Make a Big Difference
CDC Software is another technology vendor focused on enabling operational workers to use BI and analytics to make decisions. The company’s CDC Factory division makes an electronic kiosk that operators can use on the factory floor. A touchscreen interface with user-friendly graphics helps operators input information about the shift, the product, and the machine runtime, for example. If there’s a bottleneck slowing down the line, an early-warning signal flashes on the screen for operators and supervisors to see. Not only does this provide a clear, real-time picture of what’s happening on the line, but it also captures all of the information and provides plant performance metrics.
That kind of visibility can lead to performance improvements, experts say.
“What motivates people to do something is competition and peer pressure,” says Mark Sutcliffe, president of CDC Factory. “Obviously, if you do things more effectively everyday, the big numbers follow. It’s not rocket science, but it does require discipline and a framework and the [right] tools,” he says.
Another small vendor, As One Technologies Inc., delivers tools that work with existing plant systems and provide easy-to-use analytics. The company recently introduced a product, called Catalyst xM, that captures plant floor processes that manufacturing execution systems don’t typically capture. Catalyst xM, for example, tracks machine maintenance and pulls historical data that can be used to identify events that could yield a problem, says Jay Mellen, executive vice president for business development at As One. The system will send a text message, e-mail, or automated phone message to escalate management action.
“It automates the mundane actions to reduce the time it takes [to get things fixed],” Mellen says. And, while inspired by corrective and preventive action (CAPA) applications, “[Catalyst xM] is more focused on the automation of workflow,” he says.
The product also prompts users to enter information on why certain decisions were made on the plant floor, which can be fed into a BI system for analysis.
Of course, in production, quality is one of the most important business drivers. That’s why makers of quality management systems, such as IQS and CIMTEK, are adding analytical engines to their applications.
IQS recently added a quality intelligence reporting layer to its software that uses SAP’s Crystal Reports platform, as well as a quality analytics engine using MicroStrategy Inc. technology.
“What you want to know with quality are things like early-warning indicators,” says Lori Gipp, vice president of marketing at IQS. “With business intelligence, we are able to look at materials when they come into the plant or at the information going back and forth between engineers’ design changes.”
The point, Gipp says, is to manage changes in a manner that mitigates risk.
Similarly, CIMTEK offers a predictive analytics engine that can integrate with ERP, PLM, and MES systems, and can be used to build a complete quality record. The Magellan Quality Lifecycle Management is a SaaS product that provides OEMs with insight into the entire lifecycle of a product, from component quality to manufacturing testing.
Much like the PivotLink product, Magellan includes a data warehouse that can be used for analytics and to spot trends. The tool also sends out real-time alarms so that manufacturers can ensure that contract manufacturers, for example, are testing products correctly.
“The key to the system is the ability to get early warning signals before any disaster occurs,” says Chris Rehl, CIMTEK’s director of marketing. This wards off recalls and cuts costs related to warranty expenditures, he says.
But gaining actionable insight into quality issues is just one important way to drive performance. Increasingly, manufacturers must also factor in risk management and market volatility created, for example, by rising energy costs.
SAP has designed a Web-based business performance management framework that lets manufacturers plug in tools such as SAP’s Business Objects Risk Management product, which analyzes operational, financial, and human capital risks. Manufacturers can use the tool to perform what-if analysis, for example, looking at energy price trends.
Once you have visibility into your own enterprise’s performance, it’s time to start looking at everyone else in the supply stream. The supply network is becoming increasingly complex, and manufacturers need to be aware of what is going on not only with first-tier suppliers, but also with second- and third-tier suppliers. Also, as companies expand globally, new regulations and logistics risks enter the picture.
“The number one thing I get calls about is the feeling of being exposed,” says Jim Lawton, vice president and general manager at Dun & Bradstreet’s supply management solutions business. “After pursuing cost reduction strategies, [companies say the effort] is making their supply chain more brittle and susceptible to supply chain issues.”
Management Dynamics, a maker of on-demand supply chain and global trade management software, has layered SAP’s Business Objects BI technology on top of its applications to give manufacturers the ability to monitor overseas suppliers. The BI tools let manufacturers set and monitor KPIs, such as compliance with export and trade agreements or other issues that may produce supply chain bottlenecks.
Similarly, Dun & Bradstreet provides an on-demand service that helps manufacturers predict things such as when a second- or third-tier supplier may be in danger of going out of business. D&B tracks roughly 100 million companies in a database that includes variables such as financial, legal, regulatory, and operational data. On top of that, it adds predictive analytics to generate what it calls a “supplier stability indicator.”
“It can tell you if there’s a 37% chance that a company is going to go bankrupt within the next 90 days,” Lawton says. “The other piece of the equation is getting your arms around another company’s issues that may or may not be a problem for you.” For example, if a third-tier supplier is ready to go under, the D&B tool can help sort out how this change will impact your organization. The tool assesses factors like how much money is spent on the company, how many parts are bought, and which part of the product lifecycle is affected in order to help formulate next steps.
This can help a manufacturer accelerate its own performance because “it is clearly weeding out bad performers,” Lawton says.