The dawn of the intelligent enterprise has changed manufacturing forever. The ability of the c-suite to have real-time visibility into the enterprise from financial, operations, supply chain, workforce, and sales perspectives has moved from nice-to-have to must-have. The need for intelligence inside and outside the enterprise has created a new generation of business intelligence tools finding their way inside the manufacturing sector.
The manufacturing sector’s early acceptance of six sigma tools, like familiarity with DMAIC (define-measure-analyze-improve-control) exercises, gives most manufacturers a solid basis for intelligent enterprise transformation. Given the level of automation found in many manufacturing plants and the increased use of wireless technology within any given plant, one would think that manufacturers lead the way.
When Alan Mulally arrived at Ford Motor from Boeing, however, he did not find that. A 37-year veteran of an aerospace company known for intelligent large-scale systems integration, Mulally was confronted by a siloed giant containing fiefdoms with a history of hoarding information and sabotaging previous restructuring efforts. The problem was not that the information wasn’t being collected: the problem was that it was not being shared. Mulally instituted a weekly management meeting in which every iota of data was shared with the executive corps in charts that detailed reports of newly-formed product teams and skill teams.
Neutralizing “information hoarders” can be done by a manager like Mulally, but it is even more efficient to take the keys away before hoarding occurs. Next generation BI software, which goes beyond traditional ERP systems, is giving manufacturers the ability not just to collect real-time information on the enterprise, but deliver to management fast, flexible, and scalable reporting solutions. BI provides what every great manager wants: a single version of the truth... and no secrets.
Sunday, August 15, 2010
Sunday, August 8, 2010
Tapping Into Innovation
Two years ago, we were tasked with finding out whether corporations were building purpose-built nano research facilities at the same pace as universities were. Dozens of calls were made to corporations, thought leaders, equipment suppliers, architecture and engineering firms and other targets. We concluded that what was happening in the universities bore no resemblance to the way corporations did nano-scale material research. For the most part, companies work with research universities or national labs on basic research- they utilize their equipment, their eminent scholars, their best graduate students. When something shows promise or a solution is imminent, the companies bring the project back in-house for commercialization. The disaggregation of corporations from the capital equipment (scanning or transmission electron microscopes, plasma etchers, oxidation & diffusions furnaces, optical or EUV lithography, etc) that does the heavy lifting is a fairly new phenomenon. Because of the high cost of this equipment, business models have evolved that rely on collaboration to control costs, extend current technologies, and commercial new ones. This pragmatic approach has paid off for corporations.
Proctor and Gamble has embraced disaggregation to the point where they not only don’t need the R&D equipment, they don’t need to own the product development engineer. P&G’s connect + develop initiative has taken the practice of accessing externally developed intellectual property for one’s own business and allowing one’s internally developed assets and know-how to be used by others to a new level. P&G is using MillionBrains in addition to their own portal.
This sort of pragmatic, cost-effective, “coopertition,” will deliver innovation without the cost of R&D equipment or basic product development experts. P&G, a global consumer products company, will continue to delight customers by tapping into innovative idea wherever they might be found.
Proctor and Gamble has embraced disaggregation to the point where they not only don’t need the R&D equipment, they don’t need to own the product development engineer. P&G’s connect + develop initiative has taken the practice of accessing externally developed intellectual property for one’s own business and allowing one’s internally developed assets and know-how to be used by others to a new level. P&G is using MillionBrains in addition to their own portal.
This sort of pragmatic, cost-effective, “coopertition,” will deliver innovation without the cost of R&D equipment or basic product development experts. P&G, a global consumer products company, will continue to delight customers by tapping into innovative idea wherever they might be found.
Thursday, August 5, 2010
“When a man is healthy, he has many dreams. When he is sick, he has but one.”
True regardless of socioeconomic status or geographic location. GE, Siemens, and Philips manufacture world-class diagnostic equipment. But one, GE Healthcare, has focused on delivering diagnostic solutions to people at the top and at the bottom of the pyramid.
GE began because Edison, the inventor who eventually held 1,093 US patents, wanted to solve problems for everyday people: problems related to illumination, power, sound, communication, and transportation. He wanted to make life better for the average man and he understood that accessibility to solutions would only happen if the affordability gap was addressed. Edison stated “We will make electricity so cheap that only the rich will burn candles.”
GE Healthcare has R&D facilities in a number of countries, but it was the research team in Bangalore that carried the water to GE corporate in terms of providing affordable diagnostic equipment to doctors and clinics serving India’s poorest. The biggest challenge for the team was not functionality: it was bringing the device to market within a price range that would be accepted by Indian healthcare workers and institutions. While equivalent GE devices could sell for tens of thousands of US dollars, the research team recognized that a diagnostic device developed for this market would have to sell for $500-1000. The research team, with GE approval, developed a value segment. The new value segment focused two things: a) keeping product costs down while keeping quality intact, and b) learning how/if the existing sales/marketing assets could be leveraged to sell to this segment.
They did it. GE’s MAC series has forever altered global accessibility to critical cardiac diagnostics.
Then, in another moment of brilliance, the company realized that with a little reengineering and without substantially cannibalizing sales of high-end products, GE could bring a mobile device, the MAC 800, to the US market. Bloomberg Businessweek titled the trend trickle-up innovation but adds that not all manufacturers are comfortable selling emerging market hand-me-ups in the West.
GE Healthcare. Best in class. Best of show. Deliverer of dreams.
GE began because Edison, the inventor who eventually held 1,093 US patents, wanted to solve problems for everyday people: problems related to illumination, power, sound, communication, and transportation. He wanted to make life better for the average man and he understood that accessibility to solutions would only happen if the affordability gap was addressed. Edison stated “We will make electricity so cheap that only the rich will burn candles.”
GE Healthcare has R&D facilities in a number of countries, but it was the research team in Bangalore that carried the water to GE corporate in terms of providing affordable diagnostic equipment to doctors and clinics serving India’s poorest. The biggest challenge for the team was not functionality: it was bringing the device to market within a price range that would be accepted by Indian healthcare workers and institutions. While equivalent GE devices could sell for tens of thousands of US dollars, the research team recognized that a diagnostic device developed for this market would have to sell for $500-1000. The research team, with GE approval, developed a value segment. The new value segment focused two things: a) keeping product costs down while keeping quality intact, and b) learning how/if the existing sales/marketing assets could be leveraged to sell to this segment.
They did it. GE’s MAC series has forever altered global accessibility to critical cardiac diagnostics.
Then, in another moment of brilliance, the company realized that with a little reengineering and without substantially cannibalizing sales of high-end products, GE could bring a mobile device, the MAC 800, to the US market. Bloomberg Businessweek titled the trend trickle-up innovation but adds that not all manufacturers are comfortable selling emerging market hand-me-ups in the West.
GE Healthcare. Best in class. Best of show. Deliverer of dreams.
Tuesday, July 27, 2010
Just in from NAM/IndustryWeek
According to the NAM/IndustryWeek Manufacturing Index — 2nd Quarter 2010, published by the National Association of Manufacturers and IndustryWeek, 74% of manufacturers were optimistic about future prospects in 2Q 2010: a sharp contrast from the 28% who said that in Q1 2009.
Business Outlook (% of firms with a positive business outlook)
2008.1 64%
2008.2 52%
2008.3 41%
2008.4 33%
2009.1 28%
2009.2 42%
2009.3 55%
2009.4 60%
2010.1 70%
2010.2 74%
For a fifth consecutive quarter, the share of respondents with a positive business outlook increased, however the pace of improvement slowed compared to the previous four quarters. Does that mean that the manufacturing recovery will decelerate? Not if Washington reads the signals and holds on regulatory changes that stifle growth. Not if exchange rates hold and US manufacturers continue to find customers in the global marketplace. The biggest challenge will be putting American workers back to work so consumer spending rebounds.
Business Outlook (% of firms with a positive business outlook)
2008.1 64%
2008.2 52%
2008.3 41%
2008.4 33%
2009.1 28%
2009.2 42%
2009.3 55%
2009.4 60%
2010.1 70%
2010.2 74%
For a fifth consecutive quarter, the share of respondents with a positive business outlook increased, however the pace of improvement slowed compared to the previous four quarters. Does that mean that the manufacturing recovery will decelerate? Not if Washington reads the signals and holds on regulatory changes that stifle growth. Not if exchange rates hold and US manufacturers continue to find customers in the global marketplace. The biggest challenge will be putting American workers back to work so consumer spending rebounds.
Manufacturers Deserve a Coherent Energy Policy
Allan Sloan, in A Good Energy A Good Energy Strategy Doesn’t Fit in a Slogan (Washington Post, July 13, 2010), states “So now, you ask, since I don't believe in a magic solution, what should we do? It's easy, though not politically palatable. You put a heavy tax on electricity, gasoline and other energy sources whose use you want to discourage.”
While a coherent energy policy is critical for America, heavily taxing electricity would have a disastrous effect on US manufacturing.
Think for a moment of the manufacturing operations we’ve retained in the United States: industry verticals like plastic film, wire and cable, petroleum refining, glass, chemicals, steel and aluminum to name a few. When the cost to produce an energy-intensive product like chemicals rises because the cost of energy rises, corporations evaluate lower-cost locations for production. We all know pricing for energy is extraordinarily complicated, but a wholesale increase across the board will affect a large user of power like Alcoa or ADM much more than it will affect a household. It will affect a college campus or research hospital much more than a car dealership. A large Google data center must have consistent, redundant power to operate. A large pharmaceutical manufacturing facility also needs high quality, redundant power: an outage can trigger product destruction and the need for plant revalidation. Sloan’s prescriptive may have the unintended consequence of further driving US manufacturing offshore.
He ends the article by stating, “Of course, nothing like that is likely to happen. Because ‘Raise prices, support some energy research, but don't shove solutions such as compact fluorescent bulbs down consumers' throats’ doesn't make for a good bumper sticker or sound bite. It's not magical. It's just right.”
Well… it may not be right for US manufacturing.
While a coherent energy policy is critical for America, heavily taxing electricity would have a disastrous effect on US manufacturing.
Think for a moment of the manufacturing operations we’ve retained in the United States: industry verticals like plastic film, wire and cable, petroleum refining, glass, chemicals, steel and aluminum to name a few. When the cost to produce an energy-intensive product like chemicals rises because the cost of energy rises, corporations evaluate lower-cost locations for production. We all know pricing for energy is extraordinarily complicated, but a wholesale increase across the board will affect a large user of power like Alcoa or ADM much more than it will affect a household. It will affect a college campus or research hospital much more than a car dealership. A large Google data center must have consistent, redundant power to operate. A large pharmaceutical manufacturing facility also needs high quality, redundant power: an outage can trigger product destruction and the need for plant revalidation. Sloan’s prescriptive may have the unintended consequence of further driving US manufacturing offshore.
He ends the article by stating, “Of course, nothing like that is likely to happen. Because ‘Raise prices, support some energy research, but don't shove solutions such as compact fluorescent bulbs down consumers' throats’ doesn't make for a good bumper sticker or sound bite. It's not magical. It's just right.”
Well… it may not be right for US manufacturing.
American Ingenuity
The smartest guys in the room, former Ford Motor Company executives and a team of first responders, asked a simple question: why hasn’t anyone developed a purpose-built vehicle for law enforcement? A passenger vehicle like the Crown Victoria is dramatically modified in an attempt to make it usable in the tough environment that is police work and, even then, the vehicle does not deliver on safety, efficiency, fuel economy, speed, or maneuverability.
While the mail carrier has a purpose-built vehicle, our first responders, the men and women who patrol our streets every day and every night, make due with a civilian sedan that is after-market modified to the point where the warranty is invalid and officer safety is compromised.
So why hasn’t anyone developed a purpose-built vehicle for law enforcement?
A team of Ford Motor executives spent years talking to police officers to find out what they want in a vehicle, and that vehicle has been designed: Carbon Motors E7. E7 is the brainchild of Chairman and CEO William Li. Li and VP and Chief Development Officer Trevor Rudderham know everything there is to know about designing a vehicle and bringing it to market. Another Carbon executive, Stacy Stephens, is a former police officer for the Coppell (Texas) Police Department and member of the International Association of Chiefs of Police (IACP). Stacy knows everything there is to know about the needs of the officer. He sits on the Law Enforcement Stops and Safety Subcommittee (LESSS) of the IACP Highway Safety Committee and IACP Division of State Associations of Chiefs of Police (SACOP) SafeShield Project which examines technologies for the purpose of preventing and minimizing officer injuries and fatalities.
William Li and the Carbon Motors team are going to deliver an unbelievable gift in the E7 to the law enforcement community, our everyday heroes. And the other part of the story that makes us smile is the where: this vehicle will be manufactured in America: in Connersville, Indiana, in a shuttered Visteon components plant. A gift to a town that really needed a hero.
While the mail carrier has a purpose-built vehicle, our first responders, the men and women who patrol our streets every day and every night, make due with a civilian sedan that is after-market modified to the point where the warranty is invalid and officer safety is compromised.
So why hasn’t anyone developed a purpose-built vehicle for law enforcement?
A team of Ford Motor executives spent years talking to police officers to find out what they want in a vehicle, and that vehicle has been designed: Carbon Motors E7. E7 is the brainchild of Chairman and CEO William Li. Li and VP and Chief Development Officer Trevor Rudderham know everything there is to know about designing a vehicle and bringing it to market. Another Carbon executive, Stacy Stephens, is a former police officer for the Coppell (Texas) Police Department and member of the International Association of Chiefs of Police (IACP). Stacy knows everything there is to know about the needs of the officer. He sits on the Law Enforcement Stops and Safety Subcommittee (LESSS) of the IACP Highway Safety Committee and IACP Division of State Associations of Chiefs of Police (SACOP) SafeShield Project which examines technologies for the purpose of preventing and minimizing officer injuries and fatalities.
William Li and the Carbon Motors team are going to deliver an unbelievable gift in the E7 to the law enforcement community, our everyday heroes. And the other part of the story that makes us smile is the where: this vehicle will be manufactured in America: in Connersville, Indiana, in a shuttered Visteon components plant. A gift to a town that really needed a hero.
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