@ Supply Chain Management


Different Priorities – Investment Prioritization for Manufacturing Software

IndustryWeek reports on investment prioritization for manufacturing operations software and how it varies across different industry segments in a recent article titled – Different Priorities.
According to the report,

# In chemicals, 28% of the manufacturing budget will be applied to advanced process control and simulation.
# In aerospace and defense, 50% of the manufacturing budget will be applied to quality management systems.
# In pharmaceuticals, almost 45% of the manufacturing spending will be applied to quality management (if LIMS is included), 20% on recipe/formula/specification management and 20% on enterprise manufacturing intelligence (EMI).
# Automotive, high-tech and industrial products are prioritizing MES (29%, 32% and 35% respectively).
# The consumer products industry is spending the largest share of any industry’s manufacturing budget on EAM, at 16%.

The other interesting tidbit is captured in this pie graph:

As the report highlights, pharmaceuticals, aerospace and defense are trending towards quality management systems which is a sizeable market area to address if you were a provider of software systems. So the obvious question then is what are the quality management systems out there? Further, is quality management a COTS (Commercial Off-the Shelf Software) type of solution or something more substantial (and messy as well).
The second category of interest is MES (Manufacturing Execution Systems) which garners significant interest across the segments of automotive, high-tech and industrial products. The surprising (or perhaps, not so surprising) thing about MES is highlighted in this article here.

“In 2001 the vast majority of the Fortune 1000 manufacturers AMR Research surveyed were in the throes of massive ERP rollouts,” says senior research analyst Alison Smith. “As these draw to a close, manufacturers are realizing that their ability to effectively measure and manage the performance of their manufacturing assets hasn’t proportionately improved.”

What happened here – manufacturers are realizing that their ability to effectively measure and manage the performance of their manufacturing assets hasn’t proportionately improved? Is it simply that knowing what is happening doesn’t mean that you know what to do about it? Or is it just an informational glut of too many metrics that have not been pulled together into a coherent manufacturing execution philosophy?
The last category of interest is the advanced process control and simulation software as applicable to chemicals industrial segment.

One thing stands out in all these major categories of investment interest i.e. finding the silver bullet for business execution. These systems are central to the functioning of the business i.e. they are core systems. Even in the quality management systems of interest in the first category, I would argue that it is a core function of the firm. From this, there is an indication that the promises of ERP or similar systems have not actually panned out in actuality. That’s good to know because the need is still there.

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How we improve?

How we improve is a snapshot of improvements in industry, economies of the world and methodologies in a 100 year history starting from the pre-1900 era all the way up to the current. This snapshot captures how a better world through industrial management and engineering has been made possible and lists the key stepping stones on the way. Created by RMA (Richard Muther & Associates), I think it should be something to keep in mind as to how we have gotten where we are right now.

Beware that the PDF file is rather large and cannot be printed out as is. If you’d like to order a copy of the timeline, do so here. (No, I don’t get anything out of it).

Also, this is my 100th post since starting this site. I’ve taken a little under six months to get to a 100 posts which works out to a little over 16 posts a month.With self improvement in mind, I think I should be at a run rate of 20 posts a month and so I’ll be heading that way. One more thing – Support my site, click the ads of my sponsors.

HT: Evolving Excellence – Now That’s a timeline.

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About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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December 2006