Camstar 2014-05-22 FINAL eBook

MOVING THE INNOVATION INDUSTRIES INTO THE FAST FUTUREACCELERATING CHANGE FOR THE MANUFACTURING ENTERPRISE TO BE GROWTH READY AND GLOBAL READY

MOVING THE INNOVATION INDUSTRIES INTO THE FAST FUTURE

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The Innovation Industries have unique requirements as they face the realities of the new Fast Future. Leadership will be marked by speed delivering custom products at better quality to serve local demand globally faster than the competition. Faster at quality means higher profits and market share, which are the determining factors for leadership.

The Fast Future is here now.

By creating an infrastructure for rapid change at high quality, aspiring manufacturing leaders can be ready.

Standardize Establish a unified platform enabling centrally authored manufacturing process master data, with guidelines for local variation

ConnectEstablish a common communication foundation on which to operate seamlessly as a global virtual factory

ControlManufacture products as designed, with variation captured to detect and rapidly contain defects

The new infrastructure requirements proposed in this eBook are consistent with the forward thinking of leading analysts, and fulfill their future vision.

EXECUTIVE SUMMARYINNOVATION IN THE FAST FUTURE EQUALS RAPID CHANGE AT HIGH QUALITY

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1 4

2 5

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Perfect Support an intentional global continuous process improvement network

SimplifyCreate an intuitive system thats easy to use, increasing adoption across all levels and backgrounds of user, and fostering collaboration

AccelerateLeverage all aspects of the new platform to accelerate the delivery of quality products to market and relentlessly improve them

Whether manufacturing enterprises are just emerging with new innovations, or they are established global leaders, the foundation to be Growth Ready and Global Ready are the same: preparedness for rapid change in current plants, and orchestration of manufacturing across a global plant network.

Analysts agree, the infrastructure required in this new landscape requires high agility with maintained control, and deep intelligence served up to constantly improve. The new infrastructure for speed in highly innovative industries must support 6 key functions:

3 High Upper-middle Lower-middle Low

HIGHLY INNOVATIVE, GROWTH-ORIENTED MANUFACTURING ENTERPRISES HAVE UNIQUE REQUIREMENTS TO CAPITALIZE ON EMERGING MARKET OPPORTUNITIES AND THE CHANGING GLOBAL LANDSCAPE

McKinsey identifies two categories of innovation industries (see Table 1).

Common among the innovation groups are:

GROUP INDUSTRY R&D INTENSITYLABOR

INTENSITYCAPITAL

INTENSITYENERGY

INTENSITYTRADE

INTENSITYVALUE

DENSITY

Global innovation for local markets(Innovation Industries with local customization)

Chemicals

Motor Vehicles, trailers, parts

Other transport equipment

Electrical Machinery

Machinery, equipment, appliances

Regional processing

Rubber and plastics products

Fabricated metal products

Food, beverage, and tobacco

Printing and publishing

Energy/ resource- intensive commodities

Wood products

Refined petroleum, coke, nuclear

Paper and pulp

Mineral-based products

Basic metals

Global technologies/innovators(Global Innovation Industries)

Computers and office machinery

Semiconductors and electronics

Medical, precision, and optical

Labor-intensive tradables

Textiles, apparel, leather

Furniture, jewelry, toys, other

g Complex products or processesg High-value productsg Rapid innovation cyclesg Detailed traceability requirements

g Regulatory requirementsg Complex genealogyg Massive documentation requirements

The distinction between these groups has historically been the customization requirements global technology innovators have produced technology used universally, whereas global innovators for local markets have had significant customization requirements to serve local customer demands. However, these lines are blurring as we move into a new age of global, mass customization, and the power of customer demand and maturing customer expectations span emerging economies.

The requirements of these two groups will become common universally, which high-growth manufacturing enterprises whether emerging or global will need to anticipate to remain competitive.

28%

22%

9%

7%

% of global manufacturing value added

34%

The ability to innovate change rapidly at high quality will become the new differentiator for market leadership.

TABLE 1: MANUFACTURING IS DIVERSE: WE IDENTIFY FIVE BROAD GROUPS WITH VERY DIFFERENT CHARACTERISTICS AND REQUIREMENTS.


4 INNOVATION INDUSTRIES NEED TO BE READY TO DELIVER AT THE

SPEED OF DEMAND.44

Delivering on new market

demands globally

Customizing products to meet local preferences

Leveraging new efficiencies from changing

landscape of low-cost production

Answering the increasing

complexity, uncertainty, and risk

of global markets

Using new technology

and intelligence to produce faster and

at higher quality

The reality is that the enterprise that can meet these challenges the FASTEST will win. If the manufacturing enterprise can maintain a high quality level, producing a product faster will result in higher profits. Shorter time to market affects the top line through earlier market entry, allowing more sales at higher prices. Shorter time to market affects the bottom line through shorter duration of resource usage, and less R&D costs. The results are higher margin and more investment capital to put back into the innovation cycle.

In fact, as product life cycles shorten, the impact of time to market will have more influence on profit than costs.

a a a a a

EFFECTIVENESS

EFFICIENCY

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EEEEEFFFFFFFFFIIIICCCCIIIIEEEEENNNNNCCCCCYYYYY

HIGH

ER P

ROFI

T SHORTER

DEVELOPMENT

TIME

More sa

les,

higher pr

icesEarlier market entry

Less process development costs

Shorter

usage o

f

resource

s

DISCREPANCY

LOSS OF PROFIT

30%

5%

6 months extension of development

time

50% increase of development

costs

PRODUCT LIFETIME CYCLE: 5 YEARS

In a short product lifetime cycle development time has more

influence on profit than costs.

The new market imperatives include:

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5The top industry analysts agree, in order for innovation industries to meet the new era of Global-Ready, Growth-Ready manufacturing, a deliberate investment in a connected infrastructure rooted in the latest technology approaches is a competitive imperative.

Implicit challenges to these growth strategies center on meeting shorter customer lead times, shorter innovation cycles, and more complex supply chains. A growing number of Gartner clients report challenges with orchestrating the broad number of software applications they need to connect to streamline the design-to-manufacturing process on a global scale. Here are the main challenges:


5

The new era of manufacturing will be marked by highly agile, networked enterprises that use information and analytics as skillfully as they employ talent and machinery to deliver products and services to diverse global markets.

McKinsey & Company, Manufacturing the Future

ANALYSTS AGREE:THE FAST FUTURE REQUIRES A NEW INFRASTRUCTURE.

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BOMs conversions of eBOMs to mBOMs.

Manufacturing processes need to be designed and validated.

Factory Layouts (including tooling and work cell setups) need to be designed and validated.

Routings need to be defined and adapted to local operations.

Tier Suppliers and contract manufacturing data sources need to be integrated.


6 GARTNER HAS IDENTIFIED A FRAMEWORK FOR THIS NEW INFRASTRUCTURE MODEL-BASED MANUFACTURING (MBM) AND MANUFACTURING PROCESS MANAGEMENT (MPM) MODELS

As Gartner states, MBM is used to create and consume manufacturing content, and MPM governs the data and continuously improves its relevance. They complement each other, and create a robust platform or framework to orchestrate the virtual design with the physical manufacturing execution design.

The concepts of MPM and MBM replace conventional thinking about supporting new product introduction through interfaces between ERP, MES, and PLM. The chasm between product design, business transactions and production cannot be bridged through interfaces.

We will come back to this model after we present the requirements for the new infrastructure.

Execute Processes to Build Products

(Activity-based and Transaction)

Design Products, Processes and Factories (Conceptual)

DEMAND

PRODUCTION MANAGEMENT

PRODUCTMANAGEMENT

PROCESS CONTROL AND AUTOMATION

Proces

s Spec

ificatio

n

Process Control

Customer Needs

Man

ufac

turin

g S

peci

ficat

ion

MBM CREATE AND USE MANUFACTURING

CONTENT

MPMGOVERN DATA AND MANUFACTURING

GOVERNANCE

FUNCTIONAL DELINEATION OF MBM AND MPM

Gartner Research Note. Innovation Insight: Manufacturers Need MPM and MBM to Innovate Digitally Enabled Design Through Production, published: 30 September 2013.

7SO WHY ARE TODAYS SYSTEMS PROVING INADEQUATE FOR THE FAST FUTURE?

The reality is that the challenges facing global and high-growth innovation manufacturing enterprises are not trivial.

g A complex web of multiple bills of materials (BOMs), unique configurations

g The complexity of converting the eBOM with the mBOM, and ensuring collaborative design for manufacturability

g Massive proliferation of SKUs, with customer-centric personalization

g Frequent design changes over life of product

g An expanding network of materials and component suppliers

g Need for Production Quality data

g Shortening product lifecycles

g Effectivity date and version control of changes to WIP are critical

The solutions for the enterprise that wins in this environment require a fundamentally new approach, with new technology architected to meet these demands.

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8THE 6 KEY INFRASTRUCTURE REQUIREMENTS FOR THE FAST FUTURE


1Perfect Support an intentional global continuous process improvement network

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2SimplifyCreate an intuitive system thats easy to use, increasing adoption across all levels and backgrounds of user, and fostering collaboration

5


3AccelerateLeverage all aspects of the new platform to accelerate the delivery of quality products to market and relentlessly improve them

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With those requirements, how do we architect a growth ready and global ready infrastructure for speed at high quality, in an environment where change is constant?

The 6 key functions required are:

9STANDARDIZE. AUTHOR GLOBAL MASTER DATA AND DEFINE STANDARDS FOR LOCAL VARIATION.

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STANDARDIZATION IS A NECESSARY REQUIREMENT for effective product launches and is foundational for growth, control, and visibility and ultimately speed. Standards are set from central definitions, yet must provide guidelines for local variation both in language, process, and reporting. The key parts of a growth-ready, global-ready infrastructure include:

g Central Authoring. The ability to centrally author design data, process data, global data standards, and local customization guidelines is critical for a controlled global manufacturing enterprise.

g Standard Representations of BOMs. From the eBOM to the mBOM, standards must support translation, traceability, and documentation of local variation for complete visibility and genealogy.

g Global Standardization of Variation. It seems like an oxymoron, but variation must be standardized. The types of variation allowed, how that variation is to be documented, and how exceptions are reported must follow the global standards to control product quality, and to support accurate costing through standard tracking.

g Global Data Standards. Standard terminology such as loss reasons, defect codes, etc., must be used throughout the global enterprise to gain intelligence through standard reporting. Intelligence requires a standard data set for comparison and trending.

g Local Language. Local language and time zones must be must be supported, with appropriate traceability to global standards.

The Central Data Hub is the single source of truth for the enterprise, housing master product and process data that is centrally authored and approved. As-built records are completely traceable across the enterprise.

Standardization with Local Variation requires a central data hub that is the single source of truth, and from which all definitions are distributed.

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KEY MASTER DATA SOURCESource of Truth for Design and Production

GlobalHQ

Regional HQ

1a Central Authoring of Master DataCreate Standards, Define Allowable Customizations

Localize Using Global StandardsUse Local Language and Local Process Variations1b


1010 CONNECT. BUILD THE GLOBALLY ORCHESTRATED PLANT NETWORK.2

WHAT CONSTITUTES CONNECTION? The ability to send and receive data in real time? We have that we live in a globally connected world. The question is more complex for a globally orchestrated plant network. Connected for the new infrastructure model requires:

Connection to the Central Data Hub, the system of record for all design and process data that controls manufacturing operations

Systems that Connect and Synchronize Data across the entire global organization laying the foundation for standardization, visibility, performance improvement, and global efficiency and optimization

Connection Requires the Translation of various data structures into universally usable records. Definitions must be distributed in complete packages with all dependent information

Ultimately a connected infrastructure breaks down silos across the organization, creating a collaborative, increasingly engaged global enterprise from Process Design to Production to Quality Engineering to Aftermarket.


Regional HQ

GlobalHQ

2a Central Data Hub Master design, Product and process data

Synchronize Globally2b

1111CONTROL. RELIABLE PRODUCTION AGAINST AS-DESIGNED RECORD.3

QUALITY REQUIRES CONTROL OVER THE ENTIRE PRODUCTION PROCESS TO ENSURE THAT THE END PRODUCT IS BUILT AS DESIGNED. Control is the heart of any manufacturing system, and ensures:

g Control of the 5Ms Man the right operator with the right training is performing correct function.

Machine the right machines with the right calibration and maintenance is being used for the production process.

Material the right raw materials, components, and assemblies.

Method the right process is being applied in production.

Measure the right amounts of material are being used in the production of the product.

g Quality testing and inspection are built into the control process.

g Global Track and Trace Control over all materials and their use in the production process is required for accurate track and trace.

g Through the control process, the as-built record is created, with a full audit trail to support containment of defects.

g Monitoring through global reports and dashboards to identify variation and defects must be built into the control systems.

g Alerting on quality events both locally and globally provides control and containment, and allows the next step in process improvement.

Control of the manufacturing process is fundamental to quality. It ensures products are built as designed, and supports track and trace and auditing for containment and regulatory requirements.


Regional HQ

GlobalHQ

Control3


12PERFECT. SUPPORT AN INTENTIONAL CONTINUOUS PROCESS IMPROVEMENT NETWORK WITH RAPID GLOBAL CHANGE MANAGEMENT.

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CONTINUOUS PROCESS IMPROVEMENT is supported through rapid global change management synchronized with control to act on detected problems. When improvements are made, the approved change is made in 1 place, and synchronized across the global plant network.

The continuous cycle of process improvement is a globally synchronized effort. It requires the infrastructure laid out in steps 1-3 to orchestrate rapid change through the global plant network.

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HQ

Improve4b

Learn locally4a

Synchronize4c


1313SIMPLIFY. SYSTEMS MUST BE INHERENTLY USABLE BY THE BUSINESS, AND ALLOW FOR USER-DRIVEN CHANGE.

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SIMPLIFY MEANS REDUCING THE OPPORTUNITY FOR ERRORS, AND ALLOWING USER-DRIVEN CHANGE TO ACCELERATE DEPLOYMENT AND IMPROVEMENT.

g Intuitive Interfaces From design to process deployment to operator instructions, interfaces must be easy to use and easy to understand.

g Right Information at the Right Time means less confusion and clear direction. Only the required screens and information are presented to the user based on their need.

g Single Portal to Navigate the System means less time searching for the right screens.

Simplification of the system use allows the creation of enterprise-wide Centers of Excellence, casting a wider net for users to collaborate within the same system and drive improvements.

IMPLEMENT CHANGE


14ACCELERATE. THE OUTCOME OF EXERCISING THE INFRASTRUCTURE IS THE ABILITY TO DELIVER QUALITY AT THE SPEED OF DEMAND.

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ISOLATED SYSTEMS ARE COMPETITIVE DEATH SLOW AND ERROR PRONE. The infrastructure for the agile manufacturer to keep up with the speed of demand is a single, unified system supporting the unique needs of the production environment, the complexity of the supply chain, and the constant change, both in customization of existing products and the shortening life cycle of new products. When it comes to manufacturing execution, one system is essential, as well as the seamless interaction with ERP and PLM systems.

Acceleration a single global system used by the business at all levels means FAST. Fast customization, fast improvements, and fast introduction and ramp up of new products. Rapid Change at High Quality to Innovate in the Fast Future.

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Regional HQ

GlobalHQ

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ONE PLATFORM

1515 THE INFRASTRUCTURE PROPOSED IS NEARLY PERFECTLY ALIGNED

WITH THE GARTNER FRAMEWORKS FOR MBM AND MPM.

ACTIVITIES MPM MBM 6 STEPS

Validate design for manufactur-ability

Shares the right versions of designs to manufacture

Validates that designs can be manufactured and assembled Supports manufacturing execution through reference to prevalidated production steps

a Connect, Standardize, Control

Equipment/work cell setup

Checks the right work call configurations for the appropriate product variants

Validates work cell confirguations Provides guided procedures for work cell activites and equipment management

aControl

Conversion of eBOM to mBOM

Manages assocation of design BOMs and master recipes to production BOMs and site recipes

Creates routings, work instructions, and localized BOM views/structures and site recipes

a Connect Global Process Data Management

Customer configuration management/acceptance

Customer needs associated with BOM, recipe and product process definitions

Quality assurance and quality control against multiple market-specific BOM and recipe variants

aStandardize

Engineering changes

Recorded and distributed Executed aPerfect

Quality checks

Stage gate Stage gate, at-line or in-process inspection based on predetermined variability identified during model development

aControl

Cost management

Tracking against cost estimates

Predictive product costing + Standardize

Data capture Repository for manufacturing-related content

Executed against work instructions/electronic work instructions (EWIs) and predefined processes and /or routings

aControl

Data/information time horizon

Offline and batch RealTime and transactional aConnect

Metrics Control data and process upfront to determine handoffs across entire stream of idea to delivery or concept to execution

Design, predict and execute the model that is developed to support the detailed execution of the processes

a Standardize, Perfect

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16161616

The new global manufacturing infrastructure requirements laid out in this eBook prepare todays innovation industries for the Fast Future. Rapid change, centrally authored and controlled, ready for local customization, and continually perfected, is the recipe for growth for emerging companies, and a requirement for continued leadership of global manufacturing enterprises.

The foundation to be Growth Ready and Global Ready are the same: preparedness for rapid change in current plants, and orchestration of quality across a global plant network. Aligned with the thinking of leading analysts, the infrastructure required in this new landscape requires high agility with maintained control, and deep intelligence served up to constantly improve. Six key requirements emerge:




Perfect Support an intentional global continuous process improvement network

SimplifyCreate an intuitive system thats easy to use, increasing adoption across all levels and backgrounds of user, and fostering collaboration

AccelerateLeverage all aspects of the new platform to accelerate the delivery of quality products to market and relentlessly improve them

The Innovation Industries have unique requirements as they face the realities of the new Fast Future. Leadership will be marked by speed delivering custom products at better quality to serve local demand globally faster than the competition. Faster at quality means higher profits and market share, which are the determining factors for leadership.

The Fast Future is here now. By creating an infrastructure for rapid change at high quality, aspiring manufacturing leaders can be ready.

INNOVATION IN THE FAST FUTURE REQUIRES AN INFRASTRUCTURE FOR RAPID CHANGE AT HIGH QUALITY. THE NEW MANUFACTURING ENTERPRISE

MUST BE READY.

CAMSTAR SYSTEMS INC. 13024 BALLANTYNE CORPORATE PLACESUITE 300CHARLOTTE, NC 28277PH. 1.800.588.0030CAMSTAR.COM

About Camstar Systems, Inc. Camstar is a leading innovator of software solutions that advance product quality in the manufacturing industry, enabling Brand Owners, Manufacturers and Suppliers to produce the highest quality products through Global Supply Networks. Camstars cloud-based and on-premise solutions provide Manufacturing Execution, Supply Chain Visibility and Intelligence, and Quality Management and Collaboration. For nearly 30 years, Camstar has served hundreds of satisfied customers worldwide.

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Camstar 2014-05-22 FINAL eBook