Data Integration: Talk to Your Plants

FRAMINGHAM (03/15/2000) - What with all the headlines--E-this, @-that, cyber-whatever--it's easy to forget that somebody, somewhere, still has to make stuff.

Manufacturing, though, is alive and well, stock market multiples notwithstanding. But it is also harder than ever to do. In addition to the constant pressure for maximum efficiency in their plant operations, manufacturers face growing demands to hit web velocity in their responsiveness to customers. Take the concept of "available to promise" (ATP). ATP information is at the heart of e-business: A customer needs 400,000 widgets, and she needs them by Wednesday. She doesn't want promises from your sales rep; she simply wants to log on to your website to see if you can deliver. Can she find the answer? "In the old days, available to promise meant your customer service rep looked into the warehouse, and if the product was there, he allocated the order and printed a pick slip. Now, the product may [be available to promise but may] not be in the warehouse; it may not even be on the shop floor yet--you're trying to model whether you can do it on time. It's much more complicated," says Jim Forquer, a director at management consultancy Pittiglio Rabin Todd & McGrath.

The only way to build those models and answer the customer's inquiry is to have lots and lots of information available about what's happening on the shop floor. Are the lathes, bar-code scanners and conveyor belts running? Or is line two waiting for a replacement part that won't arrive until Tuesday? You might think your enterprise resource planning (ERP) system would know, but--surprise--it doesn't. Increasingly CIOs are being called on to build bridges from the factory to the corporate enterprise systems that employees and customers go to for information.

Tread lightly, though. Building those bridges--as always--is more complicated than throwing a piece of software into the breach and calling on all the manufacturing facilities to standardize. Manufacturing has been honed for a century; software has been honed for only a couple of decades. "The manufacturing people have gone to incredible lengths to make their operations very lean," says Bill Swanton, vice president and director of the manufacturing strategies group at AMR Research in Boston. "Very few of the software packages really support that [efficient operation]. You can break your manufacturing process and set it back 30 years" by ramrodding your manufacturing operations onto the wrong software standards, he says. CIOs must work closely with factory leaders and make sure the business is driving the software decisions, and not vice versa.

MANUFACTURING: AN INCREDIBLY BRIEF HISTORY In the early days, a company made stuff and then tried to sell it. Over time, improvements focused on making that stuff more and more efficiently, for example, by automating certain steps of the process with machine tools and robotics. Other efficiency efforts included reducing the amount of supplies on hand through software-supported techniques like just-in-time manufacturing. Quality-focused improvements resulted in other breeds of software tool such as statistical process control systems.

Today the ideal is to sell first and make later. That essentially reduces the inventory of finished goods to zero and ensures that nobody gets stuck with warehouses full of obsolete 486s, say, that they can't sell now that the age of Pentium has fully dawned. But that style of manufacturing requires tremendous exchanges of information up and down the enterprise, if not the whole supply chain. "There are really two flows in manufacturing," says R. Michael Donovan, a management consultant in Framingham, Mass., who has worked with manufacturing companies for almost 30 years. "Before material can flow, information needs to flow. If the information is of poor quality, irrelevant or slow in getting to you, then how are you going to have high-velocity production?"

Manufacturing machines themselves--conveyors, lathes, mills, robotic assembly units, machine vision quality inspection systems--run on an amalgam of different software and hardware systems from a flock of vendors that most CIOs haven't had much truck with. Vice presidents of manufacturing and line managers have usually been the ones dealing with Rockwell, Honeywell, Intellution and the like--some of the big names in process automation and man-machine interface tools. Systems from these vendors generate various data streams. Problem is, that data doesn't pop out in a form that ERP systems can readily digest. "None of the big ERP packages have great out-of-the-box connectivity to a molding machine," agrees Philip Duncan, vice president and CIO of Key Plastics in Novi, Mich.

Duncan is exactly where many CIOs find themselves in the process of linking the shop floor to the enterprise: smack-dab at the beginning. Key Plastics makes injection-molded auto parts in 22 plants in North America and 12 more in Europe. "The big issue for all of us is e-business. Nobody's going to come on the internet to buy door handles, but the question is how to connect all these automotive businesses into a supply chain," Duncan says. His company is nearing the end of the process of selecting an ERP package to serve as the backbone for those supply chain connections. That ERP package will need to keep Key Plastics executives informed about capacity, equipment utilization and product quality, and to do so, it will have to connect to the factory systems. It's so important, in fact, Duncan says integration to floor systems will be one of his group's primary decision factors in selecting an ERP package.

Similarly, at Tessenderlo Kerley, the ERP system is up and running but isn't linked to certain key manufacturing systems. Tessenderlo Kerley is a Phoenix-based chemical company that makes sulfur-based chemicals, often using byproducts from oil refineries as raw materials. The company's 15 plants are all equipped with a tank-level sensor system for automatically keeping tabs on the inventory levels of the raw and finished materials. But those sensors are run by a proprietary vendor; Tessenderlo Kerley's ERP system from SAP can't read the sensor data. "The plant-level engineers and I are elated thinking about that [potential] connectivity," says CIO Bruce Blitch, but neither SAP nor the sensor vendor has taken steps to build data bridges. "So far nobody wants to bite that bullet," Blitch says.

A FINE MES A bit further down the integration road, Dentsply International has bitten the bullet, writing unique, one-off connections to link many of it's shop floor systems to its ERP system from System Software Associates. "I'm hopeful that eventually there will be a common language that the equipment is going to expect--but I haven't seen it yet," says Paul Rials, CIO of the dentistry equipment maker. Based in York, Pa., Dentsply has operations in 26 countries, ranging from large-scale manufacturing plants to smaller sales and distribution sites. "Just due to geography, conveyor systems in different plants are purchased from different suppliers," Rials says; that means each requires a unique integration link to the main system.

Manufacturing execution systems (MES) may be the alternative to this kind of manual labor. HMT Technology Corp. in Fremont, Calif., offers a good example of how MES software can forge the connections necessary in a high-tech manufacturing operation today, balancing the need for customer responsiveness with the equally pressing requirement for total efficiency. HMT manufactures the thin-film disks that serve as the actual storage media inside computer hard drives. HMT faces a number of challenges in its manufacturing environment, according to CIO Jeff McKay. For starters, the company typically has seven or eight types of products passing through the shop floor at a given time; all these products are visually indistinguishable. The manufacturing process consists of multiple stages, with multiple tools performing multiple operations on each disk at each stage; these stages also make no visible differentiation on the products. So, the old "peek in the warehouse" method doesn't help at all in figuring out inventory levels.

Finally, high-tech though HMT is--it manufactures in a clean-room setting--the disks are a commodity product. HMT's profitability depends on extremely efficient manufacturing, characterized by high productivity, quick response to changing customer demand and little waste or downtime. "We have to automate as much of the [manufacturing] process as possible for price reasons," notes McKay, "and for yield tracking and optimization purposes, we have to know in real-time what product went through what tool at what time." HMT can't afford to find out at 11 a.m. that one of the tools has been cranking out defective parts since 9 a.m.

And that's where the company's MES system comes in. HMT uses J.D. Edwards & Co.'s ERP product as its core enterprise system and Camstar Systems' MESA manufacturing execution system product to help manage the factory (tracking and summarizing inventory levels, machine performance and staffing requirements) as well as to get transactional data from the factory floor machines to and from the ERP system.

Separate MES packages are not the only aid to shop floor connectivity. ERP vendors are working to build more functionality into their systems. Alas, the consensus--of most everybody except the ERP vendors--is that ERP systems are thin on functionality for the factory floor itself. "You can get very basic MES [functions] in ERP packages such as Oracle, for instance, but the serious MES packages like Camstar and Consilium have evolved over many years in the crucible of the manufacturing environment," McKay says.

Also, Microsoft has created an architecture for factory-floor connectivity called DNA (Distributed interNet Applications) for Manufacturing, using the vendor's Component Object Model middleware standards as the foundation. Windows NT/2000 is increasingly popular as a corporate standard for machine control systems, as that operating system fits cleanly into the DNA architecture.

PROCEED WITH CAUTION So several approaches to shop floor data integration are slowly emerging. But there's still another snag to watch out for. To CIOs, the cornerstone of efficiency is standardization. If the corporation has multiple manufacturing facilities of different sorts, it makes for a diverse toolset, and recently that has meant various platforms and software packages. That's complexity, and complexity burns time and money. The CIO's natural reaction, particularly in the wake of an ERP implementation, is to draw up a standards list that includes the shop floor and require everyone to toe the line. But that can be a recipe for disaster. The real challenge for CIOs is to draw factories into the enterprise architecture and provide a relatively standard set of integration tools, while still allowing each facility to optimize its own operating efficiency.

To strike the right balance, CIOs have to tighten their own links to factory leaders, not only through meetings and committees but also by walking the shop floor to see the systems and processes in action. "I have a dual strategy in communicating with the factory. Number one, IT has to [succeed] as a service organization. If users have to pound on you for service, everything that follows is hopeless. Once that service attitude is a given, then and only then do we take the second step and interact with R&D and manufacturing as equals," says McKay.

At Dentsply, Rials' IT staff includes training and implementation managers who, with factory managers, determine data and interface requirements and feed that information back to the central development group, then manage the rollout of the resulting systems.

Such communication allows CIOs to understand and weigh the benefits of standardization and the need for individual factory software tools and connectivity requirements. Making the right decisions depends on relationships with the factory folks. The worst approach is to issue a mandate that all factories must run on ERP system X, without understanding the connectivity issues and the individual needs of each manufacturing operation. AMR's Swanton says, "Lots of factory managers have a letter in their desk drawer saying, 'If you force me to do this, I resign!' That's the threat they keep on hand to make sure they can talk rationally" about software decisions, he says.

Executive Editor Derek Slater thinks he's still living in the industrial age.

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MANUFACTURING STYLES AND STRATEGIES Discrete: Assembly or manufacture of countable items such as electronics, computers, toys or consumer packaged goods. Described by one analyst as making "anything with edges."

Process: Involving liquids, gels,

gasses--supplies and products that aren't counted in discrete units. Batch

process industries make such products one batch at a time. Heavy process

industries (such as oil) involve a continuous flow of materials.

Flow: Flow manufacturing attempts to combine the efficiencies of high- volume line manufacturing with lean, demand-driven techniques.

Lean: Manufacturing with a minimum of supplies on hand. Lean and flow manufacturing styles put heavy emphasis on continuous process improvement.

Sources:; AMR Research; benchmarking Partners PLANT-TENDING SPENDING Plant management software is a fragmented market. Many vendors offer many different kinds of functionality, and no single vendor has a big slice of the pie. The top 10 vendors by revenue in manufacturing systems:

Vendor Estimated 1999 revenue ($millions) IBM Corp.

(MES) 104 ABB Automation (MES) 68

GenRad 66 LabSystems (Thermo BioAnalysis Corp.) 45 Consilium 34 Honeywell International (MES) 31 PRI Automation 28 iBASEt 28 Camstar Systems 25 Cimlinc 25 Source: AMR Research