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LEAN AND E-COMMERCE s CELLULAR MANUFACTURING s MES SOFTWARE

TOMORROW S IDEAS AT WORK TODAY TOMORROWS


A CLIFFORD/ELLIOT LTD. PUBLICATION VOLUME 2 NUMBER 4 JULY 2000

Computers are useless. They can only give you answers.


Pablo Picasso
SPECIAL REPORT

INTERNET FOR INDUSTRY

CANADA POST CANADIAN PUBLICATIONS MAIL PRODUCT SALES AGREEMENT 1460668

CONTENTS

JULY 2000

VOLUME 2 NUMBER 4

FRONT
EDITORS NOTE

4 6 8 10

THE NOTHING BUT NET ISSUE


Manufacturers are poised to harness the power of the Internet

FEEDBACK

READERS RESPOND
E-commerce editorial strikes nerve

NEWSWIRE

THIS JUST IN...


s Advanced Manufacturing wins award! s Auto industry stars shine at gala banquet s Whats a Covisint anyway?

WORLD WATCH

GLOBAL INNOVATION
s Global Internet use snapshot s Europe unveils new e-commerce rules s Japan tries to join new economy s Manufacturers test linked info systems

COLUMNS
CELLULAR MANUFACTURING

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17

BRING YOUR DEPARTMENTS BACK INTO THE FOLD


Treat your process departments as in-house vendors and watch your lean initiative take flight

page 10

page 17

page 25
COVER ILLUSTRATION BY ED SCHNURR

JULY 2000 ADVANCED MANUFACTURING

www.advancedmanufacturing.com

S P EC IA L R EP O RT

INTERNET FOR INDUSTRY

F E AT U R E S
AD VANCED TH INKING

22 25

PICASSOS PREMISE
Internet guru Jim Carroll explains why computers will always fail us.

SPEC IAL R EPORT

INDUSTRY CONNECTS
Everything you need to know about how to wire your manufacturing operations to the Internet, and why you ought to. We cant tell you everything here, so turn to page 25 to check out the contents page for our 26-page special report.

RE SEAR CH REP ORT

54 59

SCALABLE FLEXIBLE MANUFACTURING


Our special series by Chuck Anderson concludes in this issue.

I NF ORMA TIO N T EC HNOLO GY

E CHANGE FOR THE BETTER FOR MANUFACTURERS


Part four in our six-part series on harnessing information technology to help you run a lean enterprise. Gail Petersen looks at how ecommerce can be a positive force.

BACK
SOFT WARE RE POR T

65 68

MES SOFTWARE
s Camstars InSite for Windows

P A R T IN G S H O T

NO EASY SHORTCUTS ON JOURNEY TO LEAN


Dr. Thomas Jackson, CEO of Productivity Inc., takes aim at managers who think e-commerce might be the quick fix solution to implement lean manufacturing. Wrong again, he says.

page 22

ADVANCED MANUFACTURING JULY 2000 3

EDITORS NOTE

The nothing but Net issue

nside this magazine, you might find what you need to chart your companys online future. Really, I mean it. This isnt just sarcastic e-hype that was last issues editorial. It will take some time to digest, youll have to navigate through a 10 chapter maze of material, youll need to learn new language (ok, jargon) and youll have to search for stuff that applies to your company. But its here somewhere. Our writers and researchers have done a thorough job. And if you dont find it in the print version, its likely on our website (www.advancedmanufacturing.com). Weve loaded it with Internet and manufacturing-related reports, presentations, graphics and charts, and hot links to the best of the Web for manufacturers loads of stuff that we just couldnt fit into the print version. But why do you need all this? Barring a meltdown in the global communications system, the Web is your future. Although the Internet is really only a better way to move bits of information from one device to another, consider how much its changed our world. And its only just starting. In the near future, wed like to deliver our magazine to your desk, your desktop, your palmtop, your cellphone, your car, to the machines on your factory floor, and to the new wireless device youll soon carry with you everywhere. That is, once such a device is invented and perfected. Maybe your company will be the one to do it. These examples only show how these new communications tools are transforming the publishing industry. What about your industry? One recent survey by the National Association of Manufacturers found that 68 percent of manufacturers werent integrating Web-based e-commerce strategies into their operations. Thats not surprising. Some manufacturing professionals are adopting a wait-and-see approach, and arent keen to spend money without knowing theyll get some back. That will soon change. Manufacturers who search the Internet for accurate, unbiased and valuable information may also be frustrated by what they come up with. One problem is that many website creators treat all their visitors as buyers, eager to part with their money. But this e-commerce click-and-order model represents only a tiny fraction of what the Internet can do for manufacturers. If the Internet is really all about the me in media, as professor Julian Sher teaches in his Internet training sessions (www.journalismnet.com), then that puts users in control, and they will demand the information and services that they want in the format that they want them in. Thats where manufacturers are way ahead of most industries. They are used to responding to customer demand, customizing their goods for their clients, and being agile enough to shift gears on the fly. Thats why manufacturers will be able to rapidly integrate the strategic advantages that improved communications technologies and thats really all they are can bring to their businesses. So, in our efforts to be interactive and responsive, I encourage you to use this special report, download our research reports, pass them along, and if you found it helpful or not send us an email. As M Or, better yet, mail us a hand-written letter. Im starting to forget what those look like. s

NATIONAL SALES MANAGER

From the publishers of

Alistair Orr ao@advancedmanufacturing.com


DISTRICT SALES MANAGERS

A CLIFFORD / ELLIOT LTD. PUBLICATION EDITOR/PUBLISHER

VOLUME 2, ISSUE 4 JULY 2000 PRESIDENT

Todd Phillips tp@advancedmanufacturing.com


EDITORIAL DIRECTOR

George F.W. Clifford


ART DIRECTION

Julie Clifford jc@advancedmanufacturing.com Joanna Malivoire jm@advancedmanufacturing.com David Wilde dw@advancedmanufacturing.com


PRODUCTION MANAGER

Plant Engineering and Maintenance


Advanced Manufacturing is published six times yearly by Clifford/Elliot Ltd., 209-3228 South Service Road., Burlington, Ontario, L7N 3H8. Telephone (905) 6342100. Fax 1-800-268-7977. Advertising inquiries should be made to the above address. Issue dates for 2000 are January, March, May, July, September and November. Yearly subscription rates: Canada $100 plus GST*, U.S. $150. Others $250. Single copy prices: Canada $30, U.S. $45. Canada Post Canadian Publications Mail Product Sales Agreement 1460668. International Standard Serial Number (ISSN) 1481-8354. Advanced Manufacturing assumes no responsibility for the validity of the claims in items reported. *Goods & Services Tax Registration Number R101006989. PRINTED IN CANADA

Jackie Roth jr@advancedmanufacturing.com


ASSOCIATE EDITORS

Ian Phillips
WEBSITE COORDINATOR

Christine Zulawski
PRODUCTION COORDINATOR

Lee Scott plscott@cgocable.net Scott Bury c/o tp@advancedmanufacturing.com Paul Challen pc@advancedmanufacturing.com
CONTRIBUTORS

(www.advancedmanufacturing.com) Stacey Winter sw@industrialsourcebook.com

Nancy Hanc nh@advancedmanufacturing.com


EDITORIAL PRODUCTION COORDINATOR

Nicole Diemert
CIRCULATION MANAGER

Janice Armbrust ja@advancedmanufacturing.com

Ed Belitsky David Berger


4

JULY 2000 ADVANCED MANUFACTURING

www.advancedmanufacturing.com

FEEDBACK

E-world lacks vision

In response to your editors note in the May 2000 issue of Advanced Manufacturing, Combat e-mania fever with common sense Id like to say: My thoughts exactly! There are too many dotcom companies out there, and the marketplace is getting too congested. Too many companies arent focused and lack vision. I shiver thinking that someday I might be working for one of these types of companies. Getting hitched by dotcoms will be the very last thing Ill be in. So, now that consolidation is starting in a big way, I say: what a waste of money and effort.
Associate Prof. Leong Mun Chak Business & Advanced Technology Centre Kuala Lumpur, Malaysia mcleong@tm.net.my

B2B has bright future says website exec

I recently read your editors note, Combat e-mania fever with common sense. I agree with your statement that for every winning idea, there are dozens of really bad ideas, hatched by people perfectly willing to waste your time to make themselves a nickel. Today, more than ever, people do not know what they are getting online. You also wrote: Its fun to watch them squirm when you ask a pointed question about the merits of their idea. Sure, there are some Web
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creators that change their business models like seasonal fashions, but there are others that have staked a claim in the industry and arent budging. The manufacturing industry in particular is reaching such a critical mass of buyers and sellers that an open, Webbased community or marketplace is required for efficient supply chain management. The manufacturing marketplace model should be based on an open integrated market that benefits both buyers and sellers. Open marketplaces offer equal access to both buyers and sellers, a larger, more expansive selection of suppliers, and a shorter implementation cycle. B2B exchanges will be facing multiple challenges in the near future due to the increasing speed at which new marketplaces are joining the ranks in the manufacturing industry. If any one company will survive the undeniable shakeout in the industry, they must effectively differentiate themselves, either through partnering with the competition or generating traffic while moving towards profitability. In my opinion, Manufacturing.Net is the only integrated B2B e-marketplace that delivers an end-to-end comprehensive solution. Our website provides more than 400,000 pages of editorial content from leading industry publications including Cahners manufacturing publications, it receives more than one million page visits a month, boasts 220,000 registered users and more than 360 advertisers. It reaches more than 77,000 subscribers monthly with newsletters that deliver proprietary content, making it one of the most popAs M ular B-to-B portals. s
John Sateja Senior Vice President Manufacturing.net www.manufacturing.net

JULY 2000 ADVANCED MANUFACTURING

NEWSWIRE

visibility, and the int represents integration and the international scope of the exchange. But if you want to do business with General Motors, Ford, DaimlerChrysler, and Renault/Nissan, its a name youll soon have to warm up to. For now, the website is just a marketing vehicle, but they hav e put to get her so m e handy features like links to articles about the exchange, and a comprehensive frequently asked questions (FAQ) page. The marketing material at the website attempts to explain the Covisint vision: The purpose of the joint venture is to create an integrated supply chain for the worldwide automotive industry. The exchange will provide procurement, supply chain, and productdevelopment fu nctionality...... Covisint will address your entire business, link you to the entire industry, and provide a foundation to accelerate you into operating at Internet speed.
SKILLS SPOTLIGHT

This just in
TRADING E XCHANGE

Superexchange but not so super name


Covisint. Kind of grabby isnt it? Well, not exactly, but thats the name of the new high-powered online autom otive tradin g exchange. (www.covisint.com) Reaction to the name was mixed at best, with some observers calling the name downright awful. Like it or not, its a name youll be hearing a lot about, and one well be writing about. The Co is supposed to reflect communication, collaboration and connectivity. The vis represents vision and

da, was an advocate of the virtues of technical trades careers, and the need for Canadians to work together to address skills shortages. The awards program will acknowledge outstanding organizations and individuals in industry, government and education that promote technological educational at all levels of the education system. For more information, or to nominate a worthy candidate for an award, you can visit the website: (www.ylandryfund.org).

Auto industry stars shine at black-tie gala


Auto industry heavyweights dusted off their best suits and gathered in Toronto in June for a gala event to raise awareness of Canadas skills shortages and to raise money to do something about it. The 1,100 in attendance raised more than $1.75 million dollars for the Yves Landry Technological Education Endowment Fund. Landry, the late president of Chrysler Cana-

Above: The automotive industry honoured its bright stars during a gala event to raise money for a new skills training fund.

JULY 2000 ADVANCED MANUFACTURING

Ask@OracleMobile, a free wireless service that instantly allows any twoway wireless messaging device to access Internet content without
RESEARCH REPORT

requiring a browser. For now, the service is limited to information such as stock quotes, driving directions, flight information, UPS tracking, weather and other similar services that are accessed from OracleMobiles wireless portal www.oraclemobile.com. To use the service, wireless messaging
AWARD WINNER

Auto industry in transition


A new survey by the consulting firm PricewaterhouseCoopers predicts a radical overhaul in the business models for the automotive industry in 2000. The survey, Automotive Sector: Insights says this overhaul will result from automakers coping with the challenges of overcapacity, e-commerce, growth and improving shareholder value. It also explores the merger and acquisition activities. For information, visit (www.pwcglobal.com/insights/auto).

Welding Society. The article Robotic lines keep shipbuilder afloat by associate editor Paul Challen, detailed the innovative use of robotics at the Port Weller Dry Docks in St. Catherines, Ontario. You can read the August 1999 article by visiting our website archives. For his efforts, we flew Challen to Chicago where he was presented with a plaque and honoured at an awards banquet. We also finished in the top 10 in two categories in the Kenneth R.
As M Wilson business press awards. s

Magazine nets first editorial award


Since its only our first year of publication, youll forgive us for using this space to boast proudly that A dvanced Manufacturing won its first editorial achievement award, and was picked as a finalist for two more.

device users send an email to


WIRELESS WEB

In a competition open to all North American non-welding business magazines, Advanced Manufact u r i n g won the prestigious Silver Quill award from the American

Ask@OracleMobile.com using keywords such as stocks or flights in the messages subject or body. The company plans to add new services in the coming months, but didnt yet mention any plans for manufacturing-specific services.

Reach out and buzz someone


Soon, there wont be anywhere left on the planet where someone cant beep, buzz or email you. And that suits software giant Oracle just fine. In June, OracleMobile unveiled

Above: Associate editor Paul Challen accepts the Silver Quill editorial achievement award from AWS president Robert Teuscher.

ADVANCED MANUFACTURING JULY 2000 9

WORLDWIREDWATCH
WIRED WORLD

Global Internet use snapshot


RUSSIA Six percent of Russians have access to the Internet, according to www.monitoring.ru. CHINA Internet analysts IDC report that 36% of Chinese businesses are evaluating e-commerce. CANADA & USA North Americans continue to be the online global leaders with the highest Internet use rates. EUROPE Forrester Research predicts up to 1,000 e-marketplaces will emerge this year but that only one in 20 will succeed. MIDDLE EAST Internet use in the Gulf Cooperation Council, accounts for 60 percent of Arab Internet use despite making up less than 12 percent of population.

SOUTH AFRICA Corporate Internet COLOMBIA Experts predict 700,000 Colombians could be online AUSTRALIA Privacy fears are slowing ecommerce. In a recent survey, 25% of firms report not offering secure, encrypted payment methods. this year. Web use is slowed by poor telephone service and low PC penetration. users increased from 700,000 in 1998 to one million in 1999.

World Internet Use (Millions)


World Total : 304.36 million EUs Internal Market Commissioner. Source: Internet Works, www.iwks.com book, Internet and Electronic Commerce Law in the EU. Dickies enthusiasm is bridled because of technical concerns about whether the cross-border dispute resolution processes are in place to solve the problems that will arise. In his book, Dickie is more than cautious. He claim s the EU legal processes are too time consuming when compared to the pace of change in the marketplace. Dickie claims that once laws are adopted, the enforcement mechanisms are slow. He cites the case of a 1995 directive on the protection of personal data that has not been fully implemented by nine of the fifteen member states. He also criticizes the number and complexity of instruments applicable to e-commerce, suggesting a Code or series of Codes would help to make the law more understandable. has agreed to a legal framework for e-commerce, a framework which I think may become something of a world standard given the fact that the EU is the largest single market in the world an d still grow ing, says John Dickie, author of the 1999

EUROPE

Legislators unveil new rules for e-commerce


European Union countries are generating 17 billion Euros in e-commerce and experts predict it could reach as high as 340 billion by 2003. So its member countries dont miss this opportunity, the European Parliament set out a new legal structure to ensure access to Internet information and to guarantee the free movement of services throughout the European Union. The new law forces EU members to remove any prohibitions or restrictions on the use of electronic contracts and to apply national laws to electronic services. For business and consumers alike to benefit fully from the directive as soon as possible, I will pay particular attention to ensuring member states implement the directive in national legislation correctly and on time, says Frits Bolkstein, the

Europes E laws too slow, says researcher


A doctoral researcher at the University of Warwick School of Law has only reserved praise for the European Unions overdue directive on ecommerce . I think it is positive that the EU

ABOVE: Enforcement mechanisms for e-commerce legislation are too slow in the EU, says researcher John Dickie.

10

JULY 2000 ADVANCED MANUFACTURING

www.advancedmanufacturing.com

SWITZERLAND

JAPAN

Online collaboration for machine builder


When youve got 10 different engineers located at different sites, building machines with 2,000-5,000 parts, you welcome any new tool to help organize your manufacturing processes. Gretag Imaging of mini-lab and central photo finishing labs. The collaborative engineering capabilities of the EnoviaVPM, with the ability to exchange real-time data throughout the organization,

Trying to plug into the new economy


Growth in Internet start-ups in the last year indicate that Japan might finally be turning a corner on the new economy. A report by the Asian Technology Information Program says that new models for Internet-related business are rare and tend to be restricted to a few areas even though interesting opportunities exist for investors. One factor limiting the growth of Japans Internet economy, is the limited network infrastructure, (the majority of consumers still use ordinary dial-up access.) Various broadband services like ADSL (Asynchronous Digital Subscriber Line) and FWA (Fixed Wireless Access).have only become available in the past year. Still, fixed lines for corporate access are priced lower than in North America. Diffusion of computing and networking devices has been slower in strength of Japans investment driven manufacturing companies, but might well be a disadvantage in the Internet economy. Japanese venture capitalists have tended to act like banks, concerned about loans rather than equity investments. Still, there are positive signs. While large companies are coming to terms with the impact of the information and Internet economy, both the central government and local governments have been tor. Several companies have reformed their boards of directors and have hired outside directors, but most large companies in Japan continue to be dominated by internal managers rather than relying upon the markets to provide corporate control. This was once considered a

Switzerland manufactures complex photo finishing and imaging labs and found that the journey from design through manufacture and assembly was arduous. To make things easier, Gretag recently selected Enovia Solutions to manage the design and development of its products. The company purchased 40 EnoviaVPM seats, 120 Enovia Portal licenses and consulting services and training. EnoviaVPM will look after the design, manufacture, and assembly of the thousands of parts required for Gretags

is expected to improve the transition from components to finished lab. The goal is a perfect mechanical fit the first time the machine is assembled. Enovia Portal will also give non-engineering teams access to data. These e-business capabilities will allow designers to share graphical product information in real time with purchasing, inspection, and production. Enovia Portfolio is a set of e-business solutions that electronically manages all aspects of the product life cycle. Enovia and Catia are developed by Dassault Systemes of France.

shifting attention towards SMEs and technology-based start-ups. Surveys by the Organization for Japan than in the United States, Canada and the Nordic countries but is comparable to that in other European nations. A survey conducted by the Japan System User Association found that expenditures are likely to grow by 43 percent during 2000. Internet users tend to be young and use the Internet for entertainment rather than for professional services or information services. Differences in corporate culture could account for the lag. The report claims that the most important difference in economic organization between Japan and the United States is corporate governance and the way corporations interact with shareholders and the financial secment (OECD), found that the growth of the Internet is directly related to deregulatory measures. Recent changes to the registration procedures for service providers in Japan has resulted in an explosion in ISPs and ASPs. Economic Cooperation Develop-

ABOVE: A Swiss machine builder uses advanced software to manage the thousands of parts needed to build its imaging machines.

ADVANCED MANUFACTURING JULY 2000 11

WORLDWIREDWATCH

UNITED STATES

Manufacturers test new linked info systems


A new National Electronics Manufacturing Initiative (NEMI) will help OEMs link their factory information systems with their suppliers. The Virtual Factory Information Interchange Project (VFIIP) will work to define standards that will shorten the time and reduce the cost required to establish and maintain information exchange partnerships across the manufacturing supply Web. This collaborative effort boasts founding members Agile Software, Celestica, GenRad, Georgia Institute of Technology, Intel, Lucent Technologies, the National Institute of Standards and Technology (NIST), NetFish Technologies, Nortel Networks, Solectron, and Universal Instruments. As OEMs continue to outsource an increasing breadth of production processes to their network of suppliers, enterprise relationships are no longer one-to-one or even oneto-many, says Barbara Goldstein, co-chair of the project. Instead, they are complex, distributed relationships in which many strategic partners, downstream suppliers and customers need to collaborate and share data to compete effectively. The serious lack of standards for information integration among cross-company and inter-company systems is complex and can limit any po12

tential efficiency gains, says Goldstein. The VFIIP builds on the work of NEMIs plug and play factory project which focussed on interoperability on the plant floor by developing standardsbased architectures and communication protocols. VFIIP extends interoperability from within an enterprise to information systems distributed across business partners. It will address the bi-directional exchange of information between OEMs and Electronic Manufacturing Services (EMS) providers for board and final
ASIA

assembly, centering on the exchange of technical engineering and manufacturing data without including procurement supply chain interactions. GenRad, a partner in both projects recently announced that its products use several Web-based technologies developed by the plug and play

project, including a distributed object-oriented publish and subscribe messaging architecture based on industrystandard eXtensible Mark-up Language (XML) messages, and the development of virtual machine technology to monitor factory performance over the Internet.

High level product life cycle


important to satisfy demands for Internet access. Asia as a whole has a higher penetration of television sets than personal computers which could lead to Internet and online service delivery through this medium. Digital television is considered a better fit for the type of comm unitybased society found in many Asian countries. The study is written up in three separate volume and looks at all the Asian countries. You can find more detailed information about the region in the 6th edition, three-volume research report Information Highways and Telecommunications in Asia - 2000. Published by Paul Budde Communication, you can find an abstract and details for purchase by visiting the website: www.budde.com.

Infrastructure needed to support Internet


Poor Internet infrastructure is hampering the rebound for Asian countries recovering from the 1997 economic crisis that saw currencies devalued by 20 to 80 percent, according to a recent study. While much of the population is still waiting for a dial tone, there are some who are looking at nontraditional telecom products such as mobile and Internet services. Foreign investors are only now starting to re-enter the market, and are interested in funding the development of infrastructure. Theyve already started to invest in projects in some countries such as Malaysia, but resistance to foreign investment remains in many countries like Thailand, Vietnam, China, and India. The study also found that many operators are also reluctant to explore broadband services rather than the narrowband telephone services, further hampering growth efforts in the region. Some regions such as Hong Kong and Singapore have an efficient information highway infrastructure, while other countries like India have a higher growth in mobile phones. This may mean wireless services become increasingly

JULY 2000 ADVANCED MANUFACTURING

UNITED STATES

GLOBAL GATHERINGS

Internet helps speed rapid prototyping


The ability to design and produce consumer products quickly and cheaply is an advantage that many industrialized countries have lost in recent years. To regain that advantage, manufacturers are looking to the Internet. The Tele-Manufacturing Facility (TMF) at The University of California at San Diego and the San Diego Supercomputer Center are doing just that looking to enhance design and manufacturing productivity using automated Rapid Prototyping (RP) capability on the Internet. The ultimate goal of any RP process is to reduce the cost of design and manufacturing when it gets to the expensive point in the engineering design process. This would be represented by movement to the upper right corner of the accompanying figure. (See Figure 1)

Meetings of the minds


Heres an overview of events your colleagues in other countries will be attending, and what they might expect to learn about: sembly and capacitor manufacturer Aerovox will demonstrate the turn-

UNITED STATES The Internet and manufacturing


The technologies to conduct business-to-business (B2B) and business-to-consumer (B2C) transactions are complex. Photonics East 2000 Internet-Based Manufacturing will address some of these complexities. Sponsored by the International Society For Optical Engineering (SPIE), the conference is a forum for software and manufacturing engineers to discuss the different aspects of systems integration and process control to achieve open systems models across networks. For e-commerce success, integration of everything from internal business systems to process level control systems must be accomplished. Networking issues include security, reliability, authentication, and firewalls. Integration issues include interoperability, communication, and distributed resources. Managing issues include information communication and negotiation/bid processes. The conference is being held in Boston, 5-8 November 2000. For more information go

around it achieved using lean techniques. Visitors at Jostens Jewelry will find an operation that moved from Mexico to the U.S. to remain competitive. You can register online by going to www.ame.org - click on Boston 2000. You can also get a brochure by emailing info@ame.org or phoning (847) 520-3282 ext. 223.

JAPAN Manufacturing matters


Usually in this space we tell you about events that are about to happen not those that youve already missed. But this one is too good to let slip by. As Advanced Manufacturing was going to press, noted author Eamonn Fingleton was scheduled to give a lecture on the Internet and manufacturing in Tokyo for the Asian Information Technology Program (ATIP). Fingleton says a strong manufacturing base is still an economically empowering strategy even in the days of the new economy. During the seminar, Why Manufacturing Still Matters: the Limitations of the New Economy, Fingleton was to examine the power of the manufacturing sector to create a strong economy.. Fingleton is a Tokyo-based author whose commentaries on Japanese economics and business have been featured in The Atlantic Monthly, the New York Times and the Harvard Business Review. His latest book, In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity has been named one of the ten best books of 1999 by Amazon.com Business Editor Harry C. Edwards. Fingletons book was named one of the ten books that matter by the Industry Standard. For information about ATIP seminars visit their website www.atip.or.jp.

Figure 1: As we move from left to right, the costs rise sharply.

to www.spie.org and click on Photonics East.

At some point, some physical manufacturing and assembly prototyping must be done. Researchers at the TMF want to use the Internet to make RP accessible as an analysis tool rather than a costly manufacturing function. The challenge is not putting the RP hardware on the Internet, but making it useful. There are three major areas under development at the TMF website in San Diego: creating a rapid prototyping testbed on the Internet; Internet submission of parts; and researching algorithms that will automatically examine .stl geometry files look ing for glitches. The effort to reduce the need for human-checking of RP files is critical. Right now, the industry standard .stl files, feature no requirement for, nor any way to represent, geometricor topological robustness. If an .stl file is sent to an RP machine, there is no way to know it will make the part as intended. The result could be a pile of costly junk. Check out what is happening at the TMF by going to their website (www.sdsc.edu/tmf/). A live cam will take you to the virtual heart of the operation.

Simplifying for productivity


The Association for Manufacturing Excellence is bringing a lot of business to Boston these days. When the AME holds its Photonics East program, featuring lean techniques and e-business insights, they ll al so ho ld their S p e e d Through Simplicity conference in Boston from November 6-10. Conference presentations include case studies of lean manufacturing in a variety of business contexts. Tours are scheduled for several sites. Guests visiting Toyota Parts Distribution will see benchmark distribution practices. Polaroid will show high-speed automation as-

ADVANCED MANUFACTURING JULY 2000 13

WORLDWIREDWATCH

SINGAPORE

Award-winning website spreads its wings


Its hard to keep up with Advanced Manufacturing Online (AMO). The company is a true e-manufacturing success story. Since its inception in 1995, the company has grown from 10 employees to more than 200 worldwide. In recent months it has won prestigious business awards in Singapore and Hong Kong, changed its name to ECnet, and moved headquarters. In January, the company won top honours in the eStart-up category at the inaugural eAwards in Singapore. Organized by

UNITED STATES

Yahoo for robots


If you are an Internet-junkie, youve probably discovered the Yahoo clubs. Armed with a Yahoo ID and password, you can join any of the listed clubs in the Yahoo clubs directory or create your own unlisted club. One such club is for a keen group of robot builders from around the world. The Robotics Club of Yahoo, aka TRCY, boasts members from the U.S., Canada, Australia, Portugal, Turkey, England, Finland, France, Mexico, and Argentina. At the site youll find a parts finder, circuit schematics, design advice, editorials and reports, a store front and tutorials on motor basics, and online discussion groups. TRCY is a perfect example of how virtual communities on the Internet can provide a forum for information exchange leading to the development of new ideas and technologies.
UK/USA

ec.Think, a private sector e-commerce think tank, and CommerceNew Singapore, the eAwards recognize companies that have made significant contributions to Singapores e-economy. In March AMO picked up three awards as Internet company of the Year, Best B2B Internet Site, and Internet Visionary of the Year at the Internet World Asia Industry Awards in Hong Kong. The company was founded in 1995 as the brainchild of Wong Toon King, chairman and CEO and Leong Choong Cheng, co-founder and vice president of business development. ECnets supply chain management solution is a Web browser-based system that ties a manufacturer using an enterprise resources planning system together with suppliers, contract manufacturers, distributors, third-party logistics providers, financial institutions, and other trading partners using different systems. ECnet also allows buyer-to-supplier transactions directly through the two different ERP systems. The company has developed the B2B marketplace with more than 50 electronics manufacturers and about 1,100 of their trading partners, claiming that current combined transactions monthly are in excess of 120,000 purchase orders worth nearly a billion dollars. Some of these customers include Matsushita, National Semiconductor, Philips, Seagate, and TSMC. Investors include Goldman Sachs, Morgan Stanley, Doll Capital, 3i, Asiatic SilkRoute Holdings and others.
ABOVE: ECnet executives T.K. Wong, (left) and Nick Earle (right) meet with Singapores Deputy Prime Minister Tony Tan, to celebrate the formal launch of ECnet.
14

Middle managers target of new centre


The University of Warwick and Carnegie-Mellon University joined forces to create a $40 million e2Business Management Centre to train middle managers in the Internet and new communications technologies. The Centre combines the manufacturing expertise of the Warwick Manufacturing Group with Carnegies leadership in e-commerce. The information revolution has the potential to produce a massive productivity hike in traditional industries, says Professor Bhattacharya, Director of the Warwick Manufacturing Group. Things that many in the IT industry had promised sometime ago are now genuinely possible, says Bhattacharya. They enable all phases of a products lifecycle to be designed and planned from concept and definition to production, service, maintenance and retirement this is only feasible as an approach to product and process lifecycle management by using Internet-based techniques. The Centre expects to train 7,000 middle managers by 2001 with an
As M annual budget of 100 million pounds. s

JULY 2000 ADVANCED MANUFACTURING

CELLULAR MANUFACTURING

Bring all departments back into the fold


Treat your process departments as in-house vendors and watch your lean initiatives take flight
BY JOHN M. GROSS, P.E., AND KEN McINNIS

ne of the biggest stumbling blocks to implementing lean or cellular manufacturing is what to do with your process departments. How do you integrate your extrusion lines, stamping operations, paint lines, etc., into the desired dedicated cellular manufacturing processes? Its a tough nut to crack, because most companies have traditionally deemed these processes as core competencies. Companies have typically increased the size and sophistication of the equipment in a drive to run larger batches more efficiently. So what do engineers and managers do with these so-called monuments when they finally realize that running small batches scheduled through pull (or Just-In-Time) systems makes the most sense? The textbook answer is to assess how production runs are scheduled by process line and realign those runs dedicating certain product families to certain process lines. In the real world, however, you may discover several problems with this approach. Production quantities (or line time) dont allow assignment by discrete process line. The finished part might require several different variations of the product and none of your existing lines are configured to make all the required variations. All your products must run through the same piece of process equipment (i.e. paint lines). Another valid approach is to treat your process operations as in-house vendors to the assembly or finishing operations. Make these new vendors operate as

a profit centre not a cost centre. They must also set a course for continuous improvement. Eventually you may be able to integrate the process lines into downstream cells or product families based on new technology and the potentially expensive right-sizing of process equipwww.advancedmanufacturing.com

ment. Because of the continuous improvement process, however, you might decide to leave the process department as a vendor. What is an in-house vendor? With this concept, you reorganize a process department into a separate business unit which
ADVANCED MANUFACTURING JULY 2000 17

CELLULAR MANUFACTURING

Figure 1: Typical implementation process flow

supplies its downstream customers with processed material. Essentially, you attempt to create a supplier to customer relationship. This relationship is the strength of the lean thinking process. Consider that most of us tend to be

much tougher on our suppliers in terms of quality, cost and delivery. This new mentality leads us to question the amount of work-in-process (WIP), the amount of defective material received, and the lead times required to produce

certain products. Each product family ultimately becomes a customer setting its own supply criteria, quality requirements, etc. The in-house vendor has new metrics focusing on things like per-unit cost, schedule attainment, WIP turns, and customer satisfaction. Additionally, the new metrics become the basis for employee evaluations and rewards. This whole concept runs counter to the traditional manufacturing process mentality. The typical batch process mentality advocates processing the large batches to optimize processing costs and to reduce set-ups. The downstream operations then must deal with the results of these runs. The customer must store the WIP and deal with any residual quality issues. Both are conditions we would never allow our vendors to force upon us, yet we allow our own process departments to do it every day. The new vendor mentality forces the process department to assess their operations and develop ways to better serve their customers. Because everyone works for the same company, you can break down many of the traditional supplier to customer barriers sharing of data and

18

JULY 2000 ADVANCED MANUFACTURING

loss of proprietary technology. The lack of traditional barriers may allow the plant to leapfrog into advanced supply chain management concepts. Full and open access to data on floor space, technical specifications, and forecast data can allow in-house vendors to pursue innovative scheduling and delivery systems. The in-house vendor could become responsible for asneeded production and delivery of product to their in-plant customer. The in house vendor could begin supplying the product families like vending companies supply cafeterias or MRO suppliers supply parts storerooms. Open access to the data makes many concepts more viable and less risky. If the plant has a continuous improvement mindset, then experimentation to reduce WIP and streamline the ordering process may lead to some outstanding results. The in-house vendor concept starts by forming an implementation team. The teams goal is to reorganize the

process department as a vendor. The team should start by characterizing the process, identifying opportunities, and identifying required resources. The team should clearly define performance measures and reward systems since these factors have the largest impact on behaviour. As the team progresses, they

the same process at lower cost with the same quality level? If so, then determine how they do it. Use the other company as a benchmark for setting improvement goals. The other course of action, if we do not deem this process a core competency, is subcontracting the work out to the lower cost vendor.

The in-house vendor could begin supplying the product families like vending companies supply cafeterias or MRO suppliers supply parts storerooms.
should schedule periodic management updates to avoid any surprises when they unveil the final product. The teams final product should be an implementation roadmap. (Figure 1 on page 18 shows a simplified process flow of activities.) The team should also perform a make or buy analysis. Does someone else perform Use the information gathered to develop a roadmap for implementing the vendor transformation. This roadmap needs to address not only todays needs but also how the department will look in the future (1-3 years from now). The roadmap should address required layout changes and necessary equipment

ADVANCED MANUFACTURING JULY 2000 19

CELLULAR MANUFACTURING

replacements. Any plans for implementing lean manufacturing techniques, 5S, changeover time reduction, or Kanban should also be included in the roadmap. Once the team completes the roadmap, then they need to identify plant resources as well as outside resources (within your company or consultants) required to implement the roadmap. Based on the roadmap, the team should develop metrics (schedule

attainment, productivity, scrap and rework rates, RTY, WIP turns, etc.) to manage the new enterprise. Then the team must coordinate and communicate their roadmap plan and strategy to both upper management and the process department associates. Before coordinating the final plan with upper management, the team should hold in-process reviews to verify agreement of the concept.

The team should also coordinate with functional managers on personnel, raw materials, order fulfillment, WIP levels, cost and available budget. If these reviews are taking place, then final coordination will be straightforward with no surprises. If in-process reviews have not taken place, then the team should come to the meeting prepared to take upper management through the entire roadmap development process. Do not expect instant approval. After management approval, getting the crucial buy-in from the process department associates becomes the next hurdle in the implementation process. The department associates need: s to understand the end game; s to be given the opportunity for input. (Many teams have found that the grizzled old veterans werent asleep at the switch they were never asked); To avoid the chicken and egg dilemma of when to talk to the associates, simply gain support from upper management during an in-process review to discuss the concepts with the associates. During associate discussions, the team needs to be open to new ideas and listen to any concerns. There are two key points to remember during the communication process: s most people hate or fear change, and for many associates, youre tinkering with their identity; s choose your words carefully, be prepared, and expect some opposition. To keep the buy-in process rolling along, after communication meetings the team needs to follow-up on the associate concerns and shouldnt be afraid to adopt any good ideas that arise. Once your plant makes the decision to implement lean or cellular manufacturing, consider making your process department(s) into in-house vendors which serve the various product families. Apply the same measures to this new in-house vendor as you would a conventional vendor. To start the transformation process, charter a team to develop an implementation roadmap. Use in-process reviews to ensure the final product meets everyones expectations and dont forget the importance of obtaining buy-in from As M department associates. s John Gross is a business unit manager for a Missouri-based Tier 1 automotive supplier. You can reach him at (636) 2395738 or by email at Jgross@fidnet.com. Ken McInnis is the plants materials manager.

20

JULY 2000 ADVANCED MANUFACTURING

ADVANCED THINKING

Picassos
Pablo Picasso wasnt impressed with computers, but you might expect Internet guru Jim Carroll to disagree with him. But Carrolls essay proves that computers are as smart as their programmers. Illustrator Ed Schnurr presents his visual interpretation.

icassos statement presumes computMost of us who use the Internet to

NO PLATE as the reason. This information was entered into a computer database. A previously unknown logic problem meant that the computer examined the infraction, NO PLATE, queried its database, and found the fellow who owned the licence plate NO PLATE. Aha! That must be the guilty party, the computer deduced. This programming error helps illustrate the most important thing that we have learned about computers humans make mistakes. Lots of them. Those of us who write the code that drives the global microchip express that fuels our connected economy continue to make mistakes that cause big problems. Which means that yes, computers give us answers. The problem is, quite often, we cant be certain those answers are right.
As M s

ers can actually give you answers.

ask questions get 1.2 million answers only problem with answers. Sometimes things are stranger than they seem. I once read a story about a sailing enthusiast who wanted a custom licence plate. The

each of which is irrelevant. But that isnt the

application form gave him three choices. He wrote YACHTING as his first choice, and SAILING as his second. If he couldnt get those two, he didnt want a customized plate. So in box # 3 he wrote, NO PLATE. Then the licence bureau sent him a custom licence plate that read NO PLATE. He kept it. Within a week, he got a summons for not having a vehicle properly registered. Soon, he got 3 or 4 summons a day. After investigating, the computer jockeys at the licencing authority figured it out. When police officers found any abandoned vehicle, they would write up a ticket citing
22

Jim Carroll, FCA, is one of North Americas most sought after speakers about the Internet and the new economy. He has written more than 20 books including The Canadian Internet Handbook, and Light Bulbs to Yottabits: How to Profit by Understanding the Internet of the Future. You can order his books via his website (www.jimcarroll.com/catalog.htm) and you can reach him by email at jcarroll@jimcarroll.com .

JULY 2000 ADVANCED MANUFACTURING

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premise
Computers are useless. They can only give you answers.
Pablo Picasso

SPECIAL REPORT

Our comprehensive guide to the Internet for manufacturers

CONNECTS

Industry

ADVANCED MANUFACTURING JULY 2000 25

OVERVIEW PREDICTIONS MANUFACTURING BUYING ONLINE

SELLING ONLINE

SECURITY & PRIVACY TIPS & TRAINING CYBER ROADMAP TECHNOLOGY

INTERNET PRIMER

No turning back
Even though in the Internet world the future arrives before you can grasp the present, heres our take on why the Internet is about to transform manufacturing.

by Todd Phillips
Top 10 reasons why the Web will win over manufacturers: s It works: properly harnessed, its the worlds best productivity boosting tool. Just using Web-based tools to improve company-wide communications can make a major difference. Not convinced? Shut down your company e-mail for a day and watch the chaos. s Competent managers will regain control of strategy: the managers from IT departments will be politely elbowed from the corporate boardrooms, and will be less involved in strategy and more involved in system administration and maintenance where they can be most effective.
26

To e or not to be: the big fish will force their suppliers to get online. Smaller suppliers will have to provide the transparency in their operations needed for a fully integrated manufacturing process to work effectively. s The smooth ride of the Cadillac Internet: users willing to cough up the dough
s

will be able to buy higherspeed, higher reliability Internet access. This will provide the reliability and bandwidth industry needs to effectively run electronic enterprises. s Simpler technology: the mysteries behind computer code like HTML, cold fusion, java, shockwave and XML, will be old hat, and end-users

will have access to simple Internet access software and programs. Shop floors will be outfitted with Internet devices that come with preloaded links to websites approved by their companys management: suppliers, customers, vendors, leading portals and information sources (and of course to www.advancedmanufacturing.com). Remotely hosted software programs will monitor internal and external operations, reducing the need for costly software licensing and compatibility and upgrade nightmares. s Foiling the hackers: some soon-to-be-hugely profitable company will develop Internet security and privacy programs and techniques that will all

JULY 2000 ADVANCED MANUFACTURING

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but eliminate the major risks that now exist and are slowing the Web s growth among companies that jealously safeguard proprietary data. s Information when you want it, how you want it, where you want it: mobile Internet access devices will allow manufacturers, especially those in multiplant settings, to remain in constant communication with critical data when needed, as needed. As Web use moves from personal computers and into handheld portable devices, and devices attached directly to machinery, Web use in industry will soar. s Machines return phone calls: machine-to-machine Internet devices will be as routine and commonplace as phones and fax lines today. They will do remote condition-based diagnostics, online corrections and repairs, and will lay the groundwork for more complex and more complete automation systems. s Time to market will continue to shrink: true online collaboration on major new product design projects will ease the need for global travel and finally allow corporations access to all of their intellectual resources without having to fly them all into one city. s Better products, smarter website models: new and emerging companies will recognize the value of providing true valueadded services to manufacturers and will create online goods and services that are actually helpful to manufacturers, who will have no choice but to use every available tool to remain competitive. s And the most important factor: middle and senior managers who ran world-class manufacturing plants long before the Internet, will eventually be replaced by the next generation of engineers and managers for whom using the new communications technologies are as routine as clicking on the television or twisting off a beer cap.

Whats inside
PREDICTIONS

29 31 35 38 40 43 45 48 52

Editor Todd Phillips checks out what gurus, analysts, soothsayers and visionaries of all kinds are saying about how the Internet will evolve, and the role that manufacturers will play in business-to-business e-commerce.

MANUFACTURING
So what can manufacturers do over the Internet anyway? Plenty, says Dr. Richard Mathieu, author of Manufacturing and the Internet and a teacher of MIS studies at St. Louis University. In his report, he presents a strategic overview of what leading manufacturers are now doing online.

BUYING ONLINE
In this report, youll find what you need to know about online purchasing, including online auctions, electronic data interchange (EDI) and trading exchanges, by John Raskob, senior manager with Deloitte & Touche consulting.

SELLING ONLINE
Before you open up your business to the world, you had better do a realistic assessment of whether your company is ready for e-business. Doug Ward, a senior manager with Deloitte & Touche offers his e-readiness primer.

SECURITY AND PRIVACY


Whos watching you? Whos trying to hack their way into your companys systems? What can you do to protect yourself and your company? Rene Hamel, a former RCMP officer who has tackled hackers, and who is now with KPMG Investigation and Security Inc., presents a detailed overview of online security and privacy.

TIPS AND TRAINING


Before you launch your Netscape or Internet Explorer, youd better have a plan, or youll get hopelessly lost. Veteran Internet expert, Jim Corlett, from Nottingham Trent University in the UK presents the best article youll read this year about how to search the Web and get the results you need.

CYBER ROADMAP
So, where to? Well show you some of our favourite websites, and why we like them. If you are looking for a good starting point, this is it. This is a sample of the exhaustive list of reviewed sites that you can link to from our recently overhauled website at www.advancedmanufacturing.com.

TECHNOLOGY
What will it take to get your operations hardwired to the Internet, and to your suppliers and customers? Why your new machines and production lines will have integrated Internet capability and why your plant should be looking at adding the infrastructure for wireless communications. Associate editor Scott Bury presents a detailed analysis.

INTERNET PRIMER
Our glossary of Internet and e-terms, e-expressions, and some basic Internet facts to get you up to Internet speed in no time.

GET THE FULL STORY ONLINE AT OUR NEW AND IMPROVED WEBSITE
Weve overhauled our website, and filled it with loads of new material, including all the articles in this special report, online exclusives, research reports, and links to all the websites in this report. Check it out!
ADVANCED MANUFACTURING JULY 2000 27

OVERVIEW PREDICTIONS MANUFACTURING BUYING ONLINE SELLING ONLINE SECURITY & PRIVACY TIPS & TRAINING CYBER ROADMAP TECHNOLOGY INTERNET PRIMER

Experts say Web will transform industry


Theres no shortage of experts and consultants willing to guess about how the Internet is going to evolve
BY TODD PHILLIPS Forget the numbers. It doesnt matter whether B2B e-commerce hits $5.7 billion or $7.3 billion by 2003 or by 2010. Analysts and experts all use different methods to calculate their projections. But the only thing that is deadly consistent is their belief that the numbers are going up. Fast.That means more people spending more time online, and more money. But some surveys show that manufacturers arent leading-edge innovators eager to adopt and adapt the Internet. Thats a little surprising, because other surveys find that users like and trust manufacturers websites. Perhaps its just too much, too fast. Ive seen more change in the last 12 months than in my previous 19 years in the industry combined. Its moving at e-speed, says Henry Ross, an analyst with Andersen Consulting. Well, heres what experts predict is coming next. So, a paragraph earlier, we tell you to forget the numbers. Now, we are about to bombard you with a series of numbers that will make your head spin. Are you ready for some forecasts? s A recent study by GartnerGroup estimates that B2B ecommerce will skyrocket from about $145 billion in 1999 to $7.3 trillion in 2004, accounting for seven percent of all global sales transactions. Source: Gartner Group. s Global e-commerce will reach $6.9 trillion in 2004, capturing 8.6 percent of the world s sales of goods and services. Source: Forrester Research One quarter of all businessto-business purchases will be made online by 2003, and will be worth $2.8 trillion. Source: Boston Consulting Group. s Business-to-business e-commerce will dominate the business-to-consumer side by a factor of six, reaching $1.3 trillion by 2003. Source: Deloitte Research.
s

Giga Information Group estimates that Internet commerce will save companies $1.25 trillion by 2002, with the U.S. accounting for half of this amount. Giga calculates that within three years, American firms will gain a profit increase of between $360 to $480 billion due to savings accrued through e-commerce. Giga also says that annual cost savings for U.S. firms will be more than $600 billion every year by 2002. Source: National Assoc. of Manufacturers s A poll finds that by 2001, 71 percent of corporate leaders plan to extend their business processes to eMarketplaces, where multiple sellers and buyers conduct commerce online. Source: Forrester Research. s B2B-based Internet commerce will reach $5.7 trillion by 2004. Customers that do not take an aggressive approach to B2B commerce will lose customers and ultimately fail. Source: AMR Research.
BEHIND THE NUMBERS

s The

So, lets take a break from the numbers for a minute and recap the significance of all of these prognostications. If the Internet is such a vital tool, and experts agree it is to play an increasingly important role in commerce, why then are so few manufacturers capitalizing on Web opportunities? A nationwide poll of American manufacturers earlier this year found that 68 percent of those responding said their companies werent using electronic commerce as a forum for business transactions. No one questions the importance of B2B e-commerce, yet relatively few manufacturers are participating in it, said Jerry Jasinowski , president of the National Association of Manufacturers. The new NAM survey shows a wide disparity between the recognition by business that the Internet is a vital new form of commerce and the actual

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ADVANCED MANUFACTURING JULY 2000 29

PREDICTIONS

Worldwide Internet access forecast


Amount in billions of dollars
800 Net access devices (millions) 600 400 200 800 600 400 200 1995 1996 1997 1998 1999 2000 2001 2002 2003 Net population (millions)
1300 1200 1100 1000 900 800 700 600 500 400 300 200 100

U.S. E-Commerce
1998 2003
Business to business Business to consumer 1331

843

499 251 8 43 1998 109 18 1998 33 1998 52 1998 76 1998 108 1998

Net-access devices (millions) Net population (millions) Devices per surfer

1995 14.2 13.9 1.02

1999 237.1 239.5 0.98

2003 755.5 602.4 1.25

Devices include all PCs and appliances accessing the Internet.

Year

Figure 1: Online access will surge faster with new access devices.

Figure 2: Forrester Researchs projections for U.S. e-commerce.

application of that knowledge by American industry. The survey found that manufacturers are now using the B2B e-commerce for: s 23 percent, new product introductions; s 17 percent, shop for the best price; s 17 percent, use in place of EDI; s 13 percent, RFP/RFQ/RFI; s 12 percent, buy intermediate materials, parts, sub-assemblies or shipping services; s 10 percent, arrange logistics; s 7 percent, buy raw materials;

facturers in the report, The Manufacturers Growth Spiral is that: s Most online buyers are hooked on manufacturers websites. And the no-shows those who arent now visiting these sites soon will as they become more experienced Web users. The attraction is consumers belief that manufacturers sites offer the best product information the lowest prices and helpful postpurchase support. s While pure-play Web retailers and traditional brick-and-

online buyers in Forrester's survey who have ever visited a manufacturers site say that they do so regularly. Forrester also found some evidence that manufacturers are finally expanding their Web efforts. Manufacturers whove dipped their toes in the water are ready to go for a swim. While 92 percent of ecommerce-enabled manufacturers have met or exceeded their sales expectations and are planning to increase their online activity, 68 percent of manufacturers not yet selling

Most online buyers are hooked on manufacturers websites. The attraction is consumers belief that manufacturer sites offer the best product information, the lowest prices and helpful post-purchase support.
INDUSTRY STANDARD (WWW.THESTANDARD.COM)

5 percent, integrate existing supply chain. To help speed things up a bit, the association launched its own multi-million dollar website portal, (www.manufacturingcentral.net) in March.
s

MANUFACTURERS SITES POPULAR DESTINATIONS

In June 2000, Forrester Research (www.forrester.com) released its findings from a survey of 10,000 online consumers in the U.S. and Canada. Of interest to manu30

mortar merchants fight over online buyers wallet share, 80 percent of consumers whove made a purchase online have found another place to shop on the Internet: manufacturers websites (see the May 2000 Forrester Report Retail & Media Data Overview ). Online buyers who visit manufacturer sites also visit often. Web shoppers who visit manufacturer sites dont click on them by accident; 62 percent of the nearly 9,000

online expect to be within three years.


CRYSTAL BALL GAZING

Heres an assortment of other interesting forecasts and predictions that we came across in our research. s Pure play dotcom companies will gradually peter out this year and stock evaluations of Net companies will balance out. Source: IDC Research, January 2000. s E-business technology has already made outsourcing

large modules to Tier 1 suppliers possible. As Internet technology continues to make more demand data visible, more and larger modules will be outsourced until OEMs stop manufacturing altogether. Initially powertrains, which some OEMs look at as a value-added component, will remain an OEM manufactured module, for the first four to five years. Within 5 to 10 years, even these components will be outsourced. During this 10-year transition, OEMs will continue to assemble the modules into cars, but Tier 1 suppliers will eventually take over this role too. Source: AMR Research. s A new report by IDC shows that the market for Internet appliances devices designed primarily to connect to the Internet and to email is expected to soar to $18 billion by 2004. Source: The Industry Standard. s A survey of American workers found that 81 percent reported using a computer in the past month, and 68 percent have access at home. One third of all workers report spending at least one hour a day on the Internet at work. Source: Rutgers University & the Univ. of Connecticut. s The Internet economy by itself is now one of the worlds major economies. The $301 billion in annual revenue generated by Internet companies now rivals the U.S. automotive

JULY 2000 ADVANCED MANUFACTURING

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OVERVIEW PREDICTIONS MANUFACTURING BUYING ONLINE

($350 billion) and telecommunications ($270 billion) industries. Source: Univ. of Texas Centre for Research in Electronic Commerce. s By 2006, almost half of the U.S. workforce will be employed by industries that are either major producers or intensive users of information technology products and services. Innovation has increased demand for high paid IT workers, and wage gaps between IT workers ($53,000) and all other workers ($30,000) continue to widen. Source: The Emerging Digital Economy II: U.S. Dept. of Commerce. s From 1998 to 1999, the number of Web users worldwide increased by 55 percent, the number of Internet hosts rose by 46 percent, the number of Web servers rose by 128 percent, and the number of new Web address registrations rose by 147 percent. Source: The Industry Standard. s Dell Computer s online sales more than doubled during 1998, rising to more than $14 million per day, and accounting for 25 percent of the company s total revenues. Source: The Emerging Digital Economy II: U.S. Dept. of Commerce. s As many as 28.2 million people have personalized a webpage, more than 10 times the number from two years ago. Source: Cyberdialogue. s Though the Internet has grown at an incredibly rapid pace, an historical analysis by Industry Standard magazine found that television penetration grew at a faster rate and radio just as quickly. Source: The Industry Standard. s With higher bandwidth Internet access, real-time television video and audio quality presentations will be possible. Source: The Online Businessto-Business Industry: ActivMEDIA Research.

SELLING ONLINE SECURITY & PRIVACY TIPS & TRAINING CYBER ROADMAP TECHNOLOGY INTERNET PRIMER

Manufacturers shift it into high gear


Manufacturers that only put corporate brochures online are missing the point, and might miss the boat.
BY DR. RICHARD G. MATHIEU, PH.D., SAINT LOUIS UNIVERSITY The Internet has forever changed the way that manufacturing organizations do business. The Webs global access to people, data, software, documents and multimedia have allowed organizations to shorten the development cycle for new products, decrease the costs associated with procuring parts from suppliers, and achieve lead time reductions while providing personalized service and support. But achieving success on the Internet doesnt happen without clear strategic objectives and a considerable commitment of resources. Manufacturing corporations involved in e-commerce must rethink their vision for the future, says Richard Mathieu, the author of Manufacturing and the Internet. His article offers an overview of what leading manufactures are doing online. The beauty of the Internet is in its simplicity. The Internet is a packet-switched network, developed in the 1960s, in which data is broken up into pieces, addressed and numbered, and directed by routers to its destination. The Internet offers distinct advantages over the traditional telephone system for computer-based communications. First, the phone network is a circuit-switched network where each communication requires a circuit to be dedicated solely to that communication. Circuitswitched networks were okay for phone calls, but arent efficient when large amounts of data are transmitted. The World Wide Web has allowed portable, platform-independent, and content-independent applications to be created using the Internet. The birth of the Mosaic graphical Web browser in 1993 allowed a new type of client/server architecture where thin, portable,

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ADVANCED MANUFACTURING JULY 2000 31

MANUFACTURING

Figure 1: IBMs site lets customers diagnose and solve problems.

Figure 2: Users can search Kohlers online data warehouse.

universal client computers were able to access server computers. The magic of the Web was created by the introduction of four new technologies on top of the existing Internet infrastructure: s graphical Web browsers; s (the Hypertext Transfer Protocol (HTTP) remote procedure call; s Hypertext Markup Language (HTML) tagged documents; s the Uniform Resource Locator (URL) global naming convention. This relatively simple technology lets people effectively construct interconnected webs of hyper-linked nodes that mirror the distributed nature of information.
32

Web technology isnt just a way to publish electronic documents. It is also a way to build networked applications that allow internal and external users to have ubiquitous access to your computers. The implications of this are profound. Web-based client/server applications are now being developed that interactively access databases, pictures, sounds and video. These innovations have substantially changed the capabilities and competencies needed by todays manufacturing organizations.
The Internet: a strategic tool for manufacturing

The Internet and the Web have provided new strategic opportunities for manufacturing organizations.

Information technology is no longer an afterthought in forming business strategy, but must be used to break traditional barriers to business success. The Internet is being used to break geographic, time, cost, and structural barriers. The tough task for management is to align their business strategies, processes, and information technology applications. In manufacturing, the efficient and effective management, manipulation, and use of information is essential to economic vitality and growth. A competitive battle is being played out against a backdrop of companies seeking to leverage the Web for uses other than simply posting information. The following three paradigms are designed as a strategic guide to help the manufacturing professional focus on the real issues related to manufacturing and the Internet. Paradigm 1: Packaging information, providing access to information, and information e-tools are becoming critical differentiators in the customers purchase decision of manufactured products. Each manufactured product has an associated set of information related to that product. CAD drawings, inventory levels, production plans, spare parts catalogues, assembly instructions, owners manuals and the bill-of-material are just some of the valuable information elements that may be associated with a manufactured product. Manufacturing organizations are looking for ways to reduce distribution costs, speed products to market, and to get the right products to the right place at the right time, price and cost. To achieve these goals, enterprises are rethinking their relationships with customers, retailers and distributors. The more efficient the relationships with partners, the greater the com-

petitive edge these organizations will enjoy. The secret to building this competitive advantage centres on providing controlled access to the intellectual property of the organization.
Product information for customers

Websites can be used for more than simply advertising and selling products to customers. Customers often desire followup support for their purchases. For example, Bissell, Inc., (www.bissell.com) a manufacturer of vacuum cleaners, deep cleaners and sweepers, supports their customers with online user guides, a replacement part catalogue, online product registration, and a product accessory catalog. In the electronics industry, AMP, a leading supplier of electrical and electronic connectors and interconnection systems, uses its website to support its customers, typically design engineers, in the aerospace, automotive, computer networking, consumer goods, industrial, power utilities and telecommunications industries. AMP ( www.amp.com) constructed a custom database that enables information in a product catalogue to be put into a searchable form. A search engine called StepSearch creates each page on the fly, based on the information the customer is looking for. Drawing specifications, product availability, pricing information, a competitor cross reference database, and a technical glossary are also provided to assist the customer with the selection and use of AMPs products.
Information for suppliers

Herman Miller, Inc., (www.hermanmiller.com) a multinational provider of office furniture and services, has developed a webbased portal for suppliers that helps users make fast, wellinformed business decisions and eliminates multiple points of contact. Herman Millers ex-

JULY 2000 ADVANCED MANUFACTURING

tranet, reduces production cycle time and raises product quality by providing suppliers with access to receipt, quality, material inventory, invoice and payment information.
Product information for distributors

Websites can also be used effectively to support an organizations distributors. The Fruit of the Looms Activewear division is a manufacturer of Tshirts, fleecewear and knit sport shirts in the imprinted sportswear market. The Activewear website (www.fruitactivewear.com) sup-

be information intensive. One good example of this is the OnStar (www.onstar.com) communications accessory that comes as an additional feature on many General Motors vehicles. OnStar combines wireless technology with attentive, personal service to bring you enhanced safety, security and convenience. Using a Global Positioning System, satellites are able to locate the customers vehicle, diagnose the engine, and control minor vehicle operations. In the computer industry, IBM ( www.ibm.com) provides

are deploying information technologies to gain an edge over competitors by reining in costs, assuring quality products, guaranteeing quick product delivery, and improving customer service. Two technological developments are playing a major role in the growth of information technology in manufacturing organizations: s packaged enterprise software; s Web-based Internet applications.
Packaged enterprise software

ample is Meritor Automotive, Inc. ( www.meritorauto.com), a large automotive component supplier, who installed Oracle s ERP software, QAD, Inc. s manufacturing software, MatrixOne Softwares product data management software, and Thru-Put Technologys capacity-scheduling system. This set of packaged enterprise software systems has allowed Meritor to standardize and integrate global business processes in the areas of order fulfillment, accounting, production and product design.
Web-based applications

Figure 3: Lexmark uses the Web to fine-tune business models.

ports their network of wholesalers by allowing users, typically retailers, to locate specific products in stock using a Product Locator . Wholesalers are sorted by zipcode to help find products located closest to the user.
Information-based services

It is reasonable to assume that within a short period of time, most major purchases will be accompanied by some kind of Internet-linked service. Drew Rosen (1997) states that what counts most is the service actually built into the product the way the product is designed, delivered, billed and bundled, explained and installed, repaired and renewed. The value-added customer services associated with a manufactured product will typically

product updates online and computers can be automatically diagnosed and fixed. Paradigm 2: Deploy packaged enterprise software applications for data and process standardization and integration. Deploy customized Webbased client/server applications to support strategic valueadded business processes. Remember that todays strategic Internet application is tomorrows new feature in an enterprise software package. According to a 1999 survey by InformationWeek, manufacturing organizations are increasing the share of revenue spent on IT from two percent (1998) to 2.5 percent (1999) and expect 25 percent of their revenue to come from e-business. Manufacturing companies

Packaged enterprise software includes Enterprise Resource Planning (ERP) applications, Supply Chain Management (SCM) applications, and other pre-built applications, for example, in product data management and capacity scheduling. Enterprise software helps companies establish common sets of data and establish business process standards across business units. Sharing information also allows for coordination of production and customer service across global operations. One of the most significant technological events of the 1990s was the widespread adoption of ERP systems by industry. ERP vendors SAP, Oracle, PeopleSoft, J.D Edwards and Baan have developed integrated application suites that unite major business process such as order processing, general ledger and production using a framework of applications devoted to finance, accounting, human resources, and manufacturing resource planning. Installation of ERP systems has not been painless. Failed installations have resulted from the failure of organizations to realize the impact that ERP systems have on people, business processes and procedures. Yet the overall success of enterprise systems in many businesses has been tremendous. One successful ex-

Once companies have built their packaged enterprise systems, the next step is to deploy Web-based applications that present ERP data to internal or external users. For example, Kohler Company ( www.kohlerco.com) was able to Web-enable their SAP ERP system so that users in the technical services division could access tactical business information. Specifically, Kohler created a data warehouse with data extracted from the ERP system. Users can now directly query the data warehouse without having to request the use of a full-time business analyst. Packaged software systems such as SAP and Oracle are adding Web-based features to their ERP suites. Applications that are ideal for Web-based platforms, however, often pertain to non-industry standard business processes that may be unique to specific organizations. According to Kalakota and Robinson (1999) Web-based business applications that feed off of existing packaged enterprise systems will fall into three general categories: s supply chain management; s selling-chain management; s knowledge-tone applications. Selling chain applications streamline the order cycle by moving information faster among respective buyers and sellers so that buyers can

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make quicker more confident decisions. Supply chain management applications streamline the flow of goods from upstream suppliers to manufacturers, distributors and end customers. Supply chain applications must increasingly support the integration of business processes, such as co-manufacturing, co-packing, and collaborative product design, with those of key business partners. Knowledge-tone applications focus on personalized decision support, modelling, information retrieval, data warehousing, what-if scenarios and reporting. The objective of these applications is to make effective use of the tremendous stores of data generated by enterprise software systems. The core technologies for knowledge-tone applications are data warehouses that extract, cleanse and aggregate data from multiple operational systems.

specific operations. Many times these higher costs cannot be avoided, because no packaged software exists for the task the company envisions. The capabilities of enterprise software applications, however, are continuing to grow. Thus the warning: todays customized Web-based application may be a feature in tomorrows packaged enterprise system. Paradigm 3: Inefficient buying, redundant processes, nonstrategic sourcing, and maverick buying are symptoms of poor procurement practices. The ability to tie efficient procurement strategies and business workflow together with robust technology implementation will truly differentiate market leaders. (Kalakota and Robinson, 1999) Electronic procurement is a broad area that incorporates automation of traditional procurement processes. The ultimate objective of eprocurement systems is to combat high pro-

Figure 4: Automakers are banking on the Covisint superexchange.

posals (RFPs), auctioning, customer and channel management, and ways to assess participants performance. According to the Yankee Group and AMR Research, there are now approximately 500 to 600 trading exchanges. The biggest predictors of success will be the volume of trading on the exchange, the existence of prior business relationships of the participants,

Covisint, (www.covisint.com) as the joint venture is now known, will have a potential market capitalization of $30 to $40 billion with annual revenues of about $3 billion.
Buy-side procurement solutions

Web-based business-to-business trading exchanges promise better prices for buyers, more channels for suppliers, and cost efficiencies throughout the trading process.
For example, Lexmark International (www.lexmark.com) a developer and manufacturer of laser printers, developed an inventory management application that uses a data warehouse of retail sales information to enable executives to refine marketing campaigns, develop optimal pricing schemes, rationally allocate inventory, and proactively schedule factory production. Customized software applications are often more expensive to develop than packaged software because the software is tailored to the company s
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curement costs and lengthy cycle times to ensure smooth delivery of material and services. The Forrester Research Group estimates that in the U.S. revenue from eprocurement services will grow from $441 million in 1999 to more than $5 billion in 2003.
Online trading exchanges

Web-based business-to-business trading exchanges promise better prices for buyers, more channels for suppliers, and cost efficiencies throughout the trading process. All exchanges will provide requests for information (RFIs), request for pro-

and the presence of one or more big named companies. Perhaps the most visible attempt to consolidate procurement processes is the auto exchange developed by Ford, General Motors and DaimlerChrysler. The goal of the auto trade exchange is to cut costs by streamlining the purchasing process while letting suppliers pocket savings by leveraging the automakers buying power for additional discounts. The exchange provides the opportunity for suppliers to buy, sell and auction at very large volumes.

A buy-side procurement application streamlines and integrates the entire procurement process. It will automate the selection and purchase of goods from the desktop, integrate the sourcing, ordering, and payment process, and will electronically send and receive purchase orders, invoices, shipping notices and acknowledgements. For example, Lockheed Martin, Corp. (www.lockheedmartin.com), a large aerospace and defense company, has built a Web application called SupplierNet that gives more than 50 business units a central source of information about suppliers and is directly tied to the firms procurement system. Texas Instruments (www.ti. com) installed an eProcurement system by Intelisys Electronic Commerce, Inc. that allowed automated procurements so that the purchasing department no longer had to act as an intermediary between buyer and seller. Texas Instruments managers estimate that they are saving about $100 per transaction to manage direct and capitalequipment purchases than they would by simply using the procurement features found in

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their SAP system. To survive all these changes, manufacturers must implement strategies that: s treat information as a valueadded component of the manufactured product; s take advantage of the relative strengths of enterprise software systems and Webbased client/server applications, and; s reduce cycle-times and operational costs in the procurement process.
References
s Gilbert, A., IT Brings Manufacturers Closer to Customers , InformationWeek, Sept. 27, 1999, pg. 217-223. s Goldman S., Nagel, R. and Preiss, K., Agile Competitors and Virtual Organizations, Van Nostrand Reinhold. s Greenemeier, L., Buying Power , InformationWeek, April 3, 2000, pg. 67-82. s Grygo, E., Exchange Future is Mixed , InfoWorld, June 5, 2000, pg. 42-43. s Kalakota, R. and Robinson, M., e-Business: Roadmap for Success, Addison-Wesley. s Liebmann, L., ERPs Second Act: Online Access, InformationWeek, April 10, 2000, pg. 146-153. s Paul, L. G., The Biggest Gamble Yet, CIO, April 15, 2000, pg. 144-157. s Rosen, D., National Productivity Review, Fall 1997

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Supply chain key to e-procurement gains


You can buy lots of stuff online, and save lots of money, but why not start with the people you already do business with?
BY JOHN RASKOB There are new opportunities for e-procurement cropping up daily: trading exchanges, aggregate buyers gaining volume discounts, and online auctions for new and surplus goods and even for excess capacity. But whats sometimes forgotten in the rush to find new people to buy from, is the benefit of forging better links with your existing suppliers. The devil-you-know versus the

Richard G. Mathieu is an associate professor of Management Information Systems at Saint Louis University in Saint Louis, Missouri. He has published numerous articles on critical success factors in the development and implementation of information systems in manufacturing. His book, Manufacturing and the Internet was honoured with a first place award in the Association Trends 1996 publications contest. You can reach him by email at mathieur@slu.edu

one you dont argument applies well here. Supply chain management has been a critical issue for manufacturers to manage for years, and while many of the old challenges wont disappear with the Internet, the Web does create some exciting new options and approaches. The Internet enables processes to be improved between organizations by more closely bringing together suppliers, manufacturers, customers and consumers. Some of the newer supply chain techniques are built upon the established elements of the past, but they execute them in much different ways.
The new look of EDI

Electronic Data Interchange (EDI) has served as a foundation of supply chain manage-

ment for years, and its benefits include manufacturing on demand, just-in-time delivery and vendor managed inventory. Thats not to say that traditional EDI isnt also without its drawbacks it can be costly, its usually restricted to routine transactions, it s inflexible and it doesnt process information in real time. An-

other shortcoming is that is has been a benefit primarily for larger players with their own value-added networks (VANs). The Internet is changing EDI for one thing, the Web is cheaper and much more sophisticated than VANs and EDI software firms have turned to Internet EDI.

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These newer Internet technologies are replacing traditional EDI, though the basic functionality of high speed, integrated, automated messaging systems remain. The key difference is the simpler format. No longer are separate software packages required to collect, define and organize data; to translate the information to an EDI standard; and then to communicate it. Now, it is all done with just one piece of software a Web browser. How does this work in real life? Heres an example. Each

acknowledgement, invoicing and status checking. As far as the company s customers are concerned, the EDI technology is invisible. They place their orders through Owens Corning s password-protected extranet, and the software automatically converts the quantities entered by customers into truck loading logic. The customer is provided with a visual display of a cube truck showing the size of their order, together with the appropriate costs. A growing number of com-

links to Cemexs GPS-equipped fleet via satellite technology. That solution has significantly improved delivery time accuracy to within 20 minutes of the scheduled time. Cemex has improved its fleet productivity by 35 percent, leading to savings on fuel, maintenance and payroll. Most importantly, however, is the fact that Cemex has all but eliminated the problem of customer cancellations.
Reining in the maverick buyers

to do their own purchasing, their purchases are now controlled through systems that automate the routing and approval processes, using realtime product and inventory information. This allows companies to increase their leverage with key suppliers by combining all their employee orders to enable them to negotiate better volume discounts.
On the online auction block

One of todays hottest Internet-enabled supply chain ben-

One major Internet-enabled supply chain benefit is MRO e-procurement which targets commonplace problems of inefficient buying, redundant processes, non-strategic sourcing, and unreliable shipping.
day, manufacturers need to ship products to their customers. They transact with their customers through purchase orders, the invoice flags a receivable and the company arranges for a carrier to deliver the product to the customer. For the customer, the carrier represents the manufacturers service level meaning that the manufacturer is only as good as the middleman that links it to the customer. Owens Corning, the company best known for its pink fiberglass insulation, uses Internet-enabled EDI for such routine transactions as enabling its customers to define their own orders. Customers can determine their order size based on cube/weight cost or whether they want to build a full truckload for their own order rather than split a load through a lessthan-truckload (LTL) shipment. Its all done through the companys fully-secured, Internet-based order processing tool that allows online pricing, truckload sizing, order entry,
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panies are using the Internet to communicate purchase-order entry/tracking and inventory with their supply chain partners. These Web-enabled communications are expected to help reduce costs and improve performance. Some of the specific benefits they anticipate include stronger customer service levels, reduced inventory, lower supply chain costs, improved delivery date accuracy, enhanced management control, and decreased order fulfillment cycle times. Cemex, a cement and concrete company that operates in Mexico, the U.S. and South America, links satellite technology to the Internet. It turned to Web-enabled Global Positioning Satellites to solve a delivery scheduling problem which had resulted in the company s customers either cancelling, changing or rescheduling up to half of their orders. Now, with the companys central tracking system, customers use the Internet which

efits is being achieved in the area of MRO e-procurement which targets the commonplace problems of inefficient buying, redundant processes, non-strategic sourcing, an overabundance of paper and unreliable shipping. Maintenance, repairs and operations purchases (MRO) typically represent more than one-third of all the indirect goods and services a company purchases everything from office equipment right down to nuts, bolts, nails and screws. These purchases can be costly, and average about $115 per transaction. The problem and costs are exacerbated by the fact that a considerable amount of the purchases are done through maverick buying, where individual employees arrange their own purchases with suppliers of their own choice. MRO e-procurement succeeds because it doesnt try to change employees behaviour something that would be exceedingly difficult. While employees continue to be allowed

Infomediaries are virtual third parties that bring buyers and sellers together. With online exchanges, suppliers get the chance to expand their customer bases, manage excess supply, and cut their transaction and marketing costs. The process, which works particularly well at matching fragmented suppliers and buyers in markets for near-commodity items, operates in real-time with a bid-ask matching process and provides marketwide price determination and clearing. E-Steel, (www.e-steel.com) is such an exchange. Users work their way through a series of Web screens to select and configure the product type they wish to purchase, specify sales terms, select potential suppliers, confirm that their bid is matched with a supplier, receive an order confirmation, and track their order as it moves to them from the manufacturer. Auctions, another interactive means of matching buyers and sellers, are expected to account for more half of online business transactions within the next two years. They work best with unique, specialized or perishable products and services, and provide a means by which buyers and sellers can test prices. There are a number of them around. iMark ( www.imark.com ), for example, helps companies deal with excess capital equipment, used products, and unsaleable returns. Large contract bids can also be facilitated through

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auctions such as FreeMarkets (www.freemarkets.com) that offer live on-line business-to-business auctions for energy, chemicals, industrial parts, raw materials, food products and commodities.
Collaborative e-manufacturing

With the Internet, supply chain techniques are e-volving towards two or more companies working together to reduce costs and increase efficiencies throughout the entire supply chain. Within the manufacturing sector, the focus is shifting away from rationalization. Companies are concentrating on increasing their agility through lean manufacturing, configure-to-order, concurrent engineering and collaborative product design, and outsourcing non-core functions. Currently, manufacturers are using the Internet for e-CAD files and automatic transfer to

product data management (PDM) for multi-location companies, virtual plant tours, and concurrent manufacturing execution systems (MES). For example, General Motors has provided its dealers with Web-related tools. GM Access is a Web-based configure-to-order tool that historically models trends to help dealers order the appropriate number of vehicle models and their features based on past popularity. If a customer s choice of vehicle isnt available on a dealers lot, the dealer can use GM Buy Power, a Webbased network that identifies all available GM products (by vehicle type and dealership), to locate vehicles that match a customer s specifications across GM and its dealerships. If no such vehicles exist, GM Prospect is a point-of-sale, spec-to-order tool that a sales associate can use to input the customers order directly into

GMs production facilities.


Collaborative planning, forecasting, replenishment

The most sophisticated supply chain technique involves the full virtual integration of organizations, normally described as CPFR, in which each companys internal systems are fused to those of its suppliers, partners and customers. Such linkages only work when all players use common languages, have integrated Web, EDI and internal information systems and, not least, have a willingness to collaborate.
Managing your own supply chain

So, what do many organizations want in the way of Webenabled customer and procurement solutions? Here are eight favourites: s online cataloguing; s pricing by customer contract and other criteria; s online customer history

from quote to delivery; customer self-maintenance of their information profile; s online quote generation; s automatic, real time sourcing from the nearest location; s integration with EDI (on customer/vendor preference); s electronic billing, collection and payment. When it comes to addressing your own supply chain, remember that manufacturers are using e-based solutions to do the same things with their supply chains that they have always done, they are just doing it differently. The basics POs, invoices, bills of materials, etc. haven t changed, but they are being done faster, better and much cheaper using the Internet. While it can be frustrating to watch new technologies reduce the impact of your significant past investments and efforts, remember that by
s

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continuing to take real steps to optimize your supply chain you will further minimize costs while also maximizing services. Automating routine and non-routine transactions, and improving collaboration with your customers and suppliers are key ways of achieving this. Remember, that your EDI investment isnt obsolete. You can build upon it. How far you actually want to go with it, and how you do it, really depends upon your company and how much it wants to try. You must also keep an eye on what others are doing. With its potential for large savings and fast payback times, eprocurement is a current top favourite, and likely to remain so in the immediate future. There are 228 net-markets or e-marketplaces to date, and they are beginning to grow rapidly. The Covisint (www.covisint.com) automotive trading exchange between GM, Ford and DaimlerChrysler, and the more recently announced mining exchange, are just a few of the Internet-enabled techniques receiving widespread attention. Routing transaction features will be the next focus, and things will move into the mid-market. Also watch for improvements in reverse logistics. Though returns have yet to be perfected, when this occurs buying confidence (especially at the consumer-level) will increase. Keep a close eye on the Net-markets being developed in your industry. They may be the most cost effective way of leveraging your organizations presence on the Internet from the perspectives of both a buyer and seller. John Raskob is a senior manager with Deloitte & Touche Management Solutions in Toronto. You can reach him

Ready and willing, but are you able?


You must first build a solid foundation before you open your operations to the outside world
BY DOUG WARD With online business projected to exceed US$2.9 trillion in two years time and virtually all business-to-business transactions expected to be conducted via the Internet within a decade its not surprising that everyone seems to be jumping into cyberspace. But before your business makes that leap, is it really prepared to do so? According to a Gartner Group survey, the most common reason why e-business ventures fail is because the companies simply went ahead and did it, or at least tried to. Companies that have successfully set up online capabilities , however, know that it involves much more than just getting a www address. Here are some critical factors to consider that, collectively, will indicate whether your business is truly prepared for online operations. Stakeholders are the people you want to do e-business with including your customers, suppliers, employees, shareholders, regulators, the media, government and others. You need to consider how these relationships will work. While the same basic marketing principles apply to online businesses as they do to traditional ones, the way those principles are executed will almost certainly differ. For example, who will you sell to? The fact that Canada has one of the highest per capita online populations may sound encouraging, but manufacturers rarely sell in the consumer market. Thus, the critical issue is: how many of your customers, suppliers and other business partners are online? Next, determine whether those of your customers with online capabilities are using them to transact over the Internet and, in particular whether they would do so with you. How do they want

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to be served, and can that be done online? For example, are your products of a type that customers could make a buying decision online, or do most of them usually require the assistance of a sales associate? Often, the improved service you want to provide your customers will depend on your suppliers ability to meet your own demands on time. Are they ready to participate in your new venture?
What will you sell?

Not everything lends itself to being sold online. Books and compact disks were among the first items to sell well over the Internet because customers didn t need to touch or feel them to know what they were buying. All they need is an item description and picture.You may need to package and present your products differently to sell them online. Consider the other services you will offer, since the actual product may be the smallest part of your online strategy. Increasingly, the services that accompany the product make the difference, and may include order status tracking, product technical help, online configuration, multiple delivery options or more.
What business processes do you need?

ries, random re-ordering methods or inappropriate production scheduling. Another consideration is how you ll handle the additional volume youll generate from your online operations. Youll need to make arrangements with suppliers to ensure there are no delays in shipping products. Youll also need to determine how youll handle returns should a customer be dissatisfied with a product. Also, be aware that your online processes will duplicate your existing ones, and that

tems must be integrated across the supply chain associated with the Web transaction. For example, online sales must be supported by a system integrated from enquiry through fulfillment to bill presentation. Back office systems must be black box you need to be able to rely on the fact that information your customers input at the front end (when they place an order on your website) will be translated accurately and immediately to all relevant back office functions. You dont have time to

nents, connect to new sources of data, and bring in new technologies. Another critical consideration is the ability to duplicate. When problems arise, youll need to switch processing to alternative systems while you fix things. In the online world, youll need the ability to take down complete portions of your system without any visible effect on operations. In the fast-changing world of high-tech, you need technology that will be around and continue to grow.

Even though online transactions are cheaper, they must be borne in addition to your existing costs since many of your customers will still prefer to transact with you the way they always have.
will mean additional costs. Even though online transactions are cheaper, they must be borne in addition to your existing costs since many customers will still prefer to transact with you the way they always have.
IT systems applications

Most companies must revamp their business processes to support their online outlets. Online businesses operate in 24/7 time and customers shopping in the middle of the night expect the same high level of service, including access to online help, that they would receive if they were shopping in mid-afternoon. A second concern is the availability to promise (ATP) for the products youre selling. Many companies dont truly know exactly if and when a particular order can be fulfilled without doing work offline. This may be a result of poor information systems, or poor business processes that result in inaccurate invento-

Systems applications are critical for online businesses. Here are some important considerations: Your website and associated market-facing systems must be easy to improve and maintain since you ll need to change them on a regular basis to keep them from growing stale or static. Because youll be changing your front-end systems regularly, the interface between them and your back office systems must be an easy one. When you change your website, for example, you don t want to have to reconfigure your company s entire back office information system to accommodate that change. Next, your back office sys-

verify every transaction. Incidentally, if youre waiting to see how e-business will evolve and affect your industry, then spend the time getting your basic transaction processing systems and process into perfect shape. Then when the e-business wave does hit you, youll be ready for the challenge.
IT infrastructure

IT staff and support

One of the most important concerns for your information technology infrastructure is reliability. Your systems must work when you need them. Performance is also important, since your technology must be capable of handling the volume of online traffic. Youll need appropriate bandwidths to ensure that when customers visit your website, they are able to enter it. Your technology must be easy for your operations staff to manage and control on a day-to-day basis. It should also be flexible, since youll inevitably need to make changes, add new compo-

They key staff person youll need for your online business is a webmaster the point person for your online operations, responsible for maintaining and regularly updating your website. Other staff are needed to support customer queries,and maintain your technology infrastructure on a 24/7 basis. Your existing staff may also need to adapt attitudes and cultures to meet online demands by becoming more flexible and responsive than is often the case with many inhouse IT departments.
Security, audit and control

The denial-of-service attacks of February 2000 illustrate the importance of online security. Your security framework should satisfy at least these five controls: s authenticity: is the person or company conducting the online transaction actually who they say they are?; s non-repudiation: once a transaction has been conduct-

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ed, it should not be possible for the transactor to deny that they made it; s confidentiality: new security features with improved encryption technologies will help ease these concerns; s availability: your systems must be available when needed, every time; s integrity: the data captured and information provided must be fully reliable. You can t afford to have stored data deteriorate, and calculated information must be accurate at all times.
Tax, legal and regulatory issues

Online businesses are global operations, which introduces a world of tax, legal and regulatory issues affecting their businesses.Currently, a tax moratorium exists for online commerce in North America. But governments are working on it, and online businesses may find themselves exposed to multi-jurisdictional income and sales tax laws. Bill C-6, Personal Information Protection and Electronic Documents Act, controls the information collected on customers and how it is used. Online businesses can also be liable for information posted on their websites, so have someone check all materials. Searching for new customers can involve an extensive and costly marketing campaign, which you may not be able to afford. Youll need to find a way to do so, however, if you are to fully realize the advantages of going online. You may also need to convince your suppliers to accept online transactions from you, especially if they are much larger than you. Doug Ward is a senior manager with Deloitte & Touche Management Solutions in Toronto. You can reach him at dward@deloitte.ca

Protect yourself from the World Wild Web


A former RCMP officer reveals what companies must do to improve their online security and ensure privacy
BY RENE HAMEL Every day we see how the term network security is a contradiction. We are faced with new problems, new technical terms, new types of attacks on protected systems and new technology that is supposed to make our work easier. Managers are faced with a wide variety of products and services to buy so they can protect their companys assets. How do you approach e-commerce security in this type of environment? You are confronted with a virtual world that plays by its own rules. Is it much different than the physical world? Probably not. But in this new millennium, you have to make your company visible on the World Wide Web if you want to stay competitive, because more exposure and availability of your product equals more profit. But that opens your operations up to threats youd never have imagined five years ago. Everybody wants to create their own website and conduct transactions on the Web. One of the consequences of this phenomenon is a lot of small and medium-sized businesses install out-of-the-box ecommerce server systems. The installation is quick and very user-friendly. Unfortunately, to accommodate this type of installation, the out-of-the-box product often has weak security features.
Present threat

Would you start a business selling computer hardware in a seedy part of town without an alarm system, proper door security, or bars in your win-

dows? Probably not. But every day in cyberspace, numerous business owners are doing exactly that. E-commerce systems are built in a flash in the hope that profits will be generated quickly while the market is hot. You may be lucky enough that your system will not be compromised for a while, but is it

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worth taking that risk? A threat that shouldnt be overlooked these days are what we call script kiddies. A script kiddie is usually a young teen with above average computer skills who will search the Internet for hacking tools and simply try them out. Unfortunately, most script kiddies dont think about the consequences of their actions and will mess around just for the challenge and the hope of gaining status as a cool hacker. Script kiddies are scanning the Internet for easy preys. If you are an IT security professional who thinks that your systems are secure because nobody knows that you are on the Internet, you are deceiving yourself. Several cable modem users have reported scanning of their systems shortly after connecting to the Web and without previous transactions made on the World Wide Web. Security through obscurity doesn t work.
Prevention

E-commerce security

There are four components that you need to evaluate if you are thinking of building an e-commerce server: s client system; s transport protocol; s Web server; s operating system. These components have different types of vulnerabilities and they need to be understood by the manager and/or owner of a website. In the policies and standards for your company, you will need to follow a security

At this point, you should have a fairly secure system and you should be able to keep script kiddies away for a while. A similar analogy would be to use a steering wheel club device for protection on your vehicle. It doesnt mean that your vehicle will not be stolen but it will keep most car thieves away from it. Now that your system is running live, you should take the following monitoring actions: s note any intrusion signs such as unusual log-ons outside

A good definition of a digital signature can be found at (www.webopedia.com): A digital code that can be attached to an electronically transmitted message that uniquely identifies the sender. Like a written signature, the purpose of a digital signature is to guarantee that the individual sending the message really is who he or she claims to be. Digital signatures are used for the following: s to endorse a document; s endorsement of identity only;

Your resources shouldnt be spent trying to secure something that is already protected. Your system is as secure as the weakest component of your network. Computer hackers know this and they will exploit it.
cycle which will help you create a process to protect your information. To protect your business, you will need to create a system that will prevent, detect, respond and recover from attacks. The series of steps will be best implemented if you take into account both education and training. The whole cycle will only work effectively through proper coordination. Once you have decided on a security policy, you will need to take some basic steps before your system goes online: s implement network intrusion detection systems (NIDS) and/or firewalls; s do not keep services that you will not use on your network (i.e. FTP, and mail); s shut down Internet control message protocol (ICMP) services when warranted; s have a backup Internet Service Provider (ISP); s Review default settings of your system and adjust them to meet your security requirements. regular hours or while employees are vacationing, system slow down, remote access log-ons and attempts; s record all employee complaints of their system being used while they were away or their system behaving abnormally; s use adequate logging features to collect evidence; s be conscious of your email conversations on the network about the incident. You could be monitored by the people who attacked your system; s do not start your own investigation and evidence collection. You could destroy crucial evidence. Hire trained experts for this task; s remember that cleaning your system is no guarantee that you wont be attacked again. Stay alert and proactive. Whether you are performing e-commerce transactions or protecting your intellectual property, you should be familiar with other security features such as digital signatures and certificate authorities. does not certify the authoring of a document; s not an approval of the content. A digital signature differs from a certificate authority in that a third party will confirm the identity of the parties involved in an electronic transaction. Webopedia defines a certificate authority as: a trusted third-party organization or company that issues digital certificates used to create digital signatures and public-private key pairs. The role of the CA in this process is to guarantee that the individual granted the unique certificate is, in fact, who he or she claims to be. Usually, this means that the CA has an arrangement with a financial institution, such as a credit card company, which provides it with information to confirm an individual s claimed identity. CAs are a critical component in data security and electronic commerce because they guarantee that the two parties
s

There are some basic security steps that you can adopt to prevent and minimize the amount of damage or loss if you are the victim of an attack from a hacker or a disgruntled employee. You will have to look at your whole system and reassess its weaknesses and strengths. The information stored in your system is more likely to be vulnerable at the access points and not in transit between point A and point B. Your Web server and your clients systems will need more controls and security policies implemented. When the information travels between A and B, it is encrypted most of the time. Consequently, your resources shouldn t be spent trying to secure something that is already protected. Your system is as secure as the weakest component of your network. Computer hackers know this and they will exploit this environment.

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exchanging information are really who they claim to be. Digital signatures, certificate authorities, digest, and encryption are terms constantly used by security professionals dealing with problems such as push/pull technology. The pull technology refers to a user surfing the Internet and requesting information to be downloaded to his/her computer system. For example, if you decide to download the encryption software PGP. You need to go to the (www.pgp.com) website and download the freeware version. Once it is downloaded, you will install the software on your system or you can delete it if you change your mind. The majority of users on the Internet today use this type of technology. As a user you have the advantage of choosing what will be installed on your system and what kind of

changes you will allow on your PC. You are still vulnerable to virus and Malware (malicious software). You are, however, in a better position to monitor and react quickly to an attack if warranted. The push technology is a different threat altogether. You might be familiar already with ActiveX controls and Java applets. In a nutshell, they are little programs executed on your system making Web surfing more interactive. They frequently run in the background while you are surfing the Internet. A good example would be when you install software asking you if you want future upgrades when they become available. If you responded Yes, you will automatically receive upgrades from the manufacturer while you are surfing the Web. The installation will occur without you asking to do it.

For example, you can download the newer version of Real Player at (www.realplayer.com). It is a tool for listening to music files. Once the program is installed and you have agreed to let Real Player send you updates, the push technology will take effect every time you sign on to the Internet. Real Player will check its website for updates without you asking for it. Another great example is the Bullet software from a security company named ISS at ( www.iss.net ). This software will push an ActiveX control onto your system and check to make that sure you are not infected by a virus before you go on one of their client s web sites. The software will clean your machine automatically if you are infected by a virus. You will also find this type of technology when you subscribe to a service that enables you to receive the latest

stock quotes on your system every few minutes. When your system is hooked up to the Internet as you are working away on something else, it will automatically download the quotes for you on your computer. This type of service is very useful, but you must be certain that the source of the software is 100 percent reliable. It should be used with care and common sense. Remember that you are allowing an unknown person to install an unknown number of files on your system in several different locations. The source code for the files is unknown to you and you should react accordingly.
Stop hackers

The CSI (Computer Security Institute) released a recent survey which revealed that most security violations in businesses are internal problems. The ratio used to be 80 percent internal (ex-employees included)

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and 20 percent external (hackers). The 2000 survey shows a ratio of 71 percent and 29 percent respectively. The increase of external hits by hackers is primarily due to the technology being easier to use by the script kiddies and the population becoming more computer-literate. Because the threat is now real, we need to focus more attention on security. A proper security cycle includes: prevention, detection, response and recovery. You need to focus on the prevention and detection components to minimize the amount of money spent on response and recovery. We presently have a very hot market for e-commerce businesses. To secure your esystems effectively, a proper security assessment and a good system implementation will save you a lot of grief and money. It may be more costly initially but you will be glad that you made the decision when your competitors are shutting down for the day because of a DoS (Denial of Service) attack, while your system is up and running and you are busy taking orders. Rene Hamel is a senior manager for the newly formed Technology Investigation Services practice for KPMG Investigation and Security Inc. After more than 15 years in the RCMP, he spent the last three working for the RCMP Vancouver Technological Crime Section where he performed hacker investigations and computer forensic analysis. Rene received training from different agencies specializing in network security and data recovery such as the FBI( Quantico, Va.), Electronic Warfare Associates EWA (Ottawa, ON), ASRData( Austin, Texas) and the Canadian Police College (Ottawa, Ontario).

SELLING ONLINE SECURITY & PRIVACY TIPS & TRAINING CYBER ROADMAP TECHNOLOGY INTERNET PRIMER

Search tips to help you find your way


Strategies, options and developments in searching for manufacturing information on the Internet
BY JIM CORLETT Anyone can do an Internet search. By simply putting a word or two into a search engine, you will get something back out. What you wont necessarily get are those sites most relevant to what you want, and you may well miss the best ones. To search efficiently and effectively, you need a strategy. Jim Corlett helps oversee one of the most impressive collections of resources for manufacturers that exists online or anywhere (www.eevl.ac.uk). He didnt help build that website without knowing a thing or two about how to separate wheat from the chaff. This will likely be the best article you read this year about Internet search strategies for manufacturers. If you read it carefully, and follow Jims strategies, you will save yourself countless wasted hours waiting for useless website pages to load. Im going to show you how I search for information on the Internet. There are other approaches that differ in detail, but the basics are the same. Most search engines offer simple or advanced searches, and the good ones will have a page of search hint or tips for you to get the most out of the service. Use them! A quick read of their specific search rules will save you time later. For a simple search to be effective, you need to be looking for something pretty specific or unusual if you want stuff on high speed machining, then enter high speed machining, into the search window, and not just machining which will give you a mass of irrelevant items to wade through. For a more advanced search, (that is, one with more than one simple word or term), you need first to be clear about what you are actually looking for. Sounds obvious, but its often a useful first step. Formulate a sentence which

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describes the topic e.g. concurrent engineering in the automotive industry. Identify the key bits (concurrent engineering, automotive industry ) and then make sure you ve got the alternatives covered. Putting in these terms will get some relevant results. But you will miss, for instance, those sites which call it simultaneous engineering (a synonym). Similarly with automobile, car, or motor for automotive. These searches use Boolean logic. To widen a search out (get the most hits), use an OR simultaneous engineering OR concurrent engineering. To narrow things down, use an AND concurrent engineering AND automotive industry. Other things to look out for are: s spelling: moulding or molding, for instance; one without the other could lose you a lot of sites; s also, be wary of acronyms: they can be a useful shortcut, but they are often not unique. Look for electro-discharge machining by putting in EDM and youll also get back lots of stuff about engineering data management; s another useful shortcut is truncation: most searches will allow you to do a stem search i.e. cut off words with a symbol so that you find everything which starts with that stem e.g. automo* (and most Web engines use an asterix as the truncation symbol) will get you automobile, automobiles, automotive. It is particularly useful if you want both singular and plural. But don t cut too deep: auto* for example, would bring out a lot more than the three terms required in the last example! Also, know your search site. There may be options within a site. For instance, EEVL ( www.eevl.ac.uk/) has a database option (for which you ll need fairly general
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terms, since youre searching only the titles, keywords and abstracts describing sites) and also the option to search whole websites (where much more specific terms are appropriate, given the much greater amount of information available for searching). If youre getting too much out of the system, it is possible with some sites (e.g. EEVL, again) to limit the search by a particular resource type. It may be that you only want companies in a particular field, or full-text documents, or courseware. In which case, put your search term in and click the relevant resource type. If you re not getting enough out of the system using these strategies, then try going wider, using related terms rather than just synonyms, or more generic terms. Youre never going to get everything, nor are you likely to want to. Some of these strategies, however, will get you more relevant sites more quickly. Once youve got a list of sites, what should you do to see if theyre any good? You need to know a number of things about them to make sure youre not wasting your time checking out a dud. Website evaluation does not take long. A few quick checks should do it: s Can you see if a person or organization is responsible for the site? (You need to know where its coming from); s Is the subject matter relevant? (Obvious, really); s Is it maintained by an individual or organization affiliated to an academic or government institution? (These are usually reliable sources of useful information); s Is there a statement about the purpose and coverage of the information? (so you can gauge its range and depth); s Is the information promotional? (In which case, be aware of bias); s Is the information copyright-

ed? (If so, this might restrict what you can do with the info; you must abide by the rules laid down); s Is the date of the last update included? (Invaluable to make sure youre not getting outdated information); s Is there an index or site map or table of contents? (Can speed your awareness of and navigation round the site), and; s Are contact details given? (So that you can have somewhere to go immediately for further info, if required).
Options

Once youve decided what exactly youre looking for, and how you re going to rate it when you do find it, where do you then go to look for it? Basically, you can try one of the big global search engines that use robot search tools to trawl through a massive number of websites automatically and give a very brief indication of what the sites about. Or you can go for one of the more specific sites (subject gateways) which search a pre-selected range of sites in a targeted area (such as engineering), based on certain quality criteria and containing full descriptions of each site. My favourite global search engine of the moment is Google (www.google.com/), but there are a good number of others, such as AltaVista (www.altavista.com/), Lycos (www.lycos.co.uk/), and HotBot (hotbot.lycos. com/). As search tools, they can be effective for detailed topics. Their main defects spring from the way the results of a search are presented; the list of resources your search query returns can seem very unfocused and unselective, and the descriptions unhelpful. This can lead to time-consuming efforts that you may find frustrating when trying to dig out the relevant sites. I would rather start from the other end, and go from the specific to the general. I would pick a single-subject gateway and see what it has to offer

first. EEVL (www.eevl.ac.uk/), from the UK, with more than 5,000 engineering resources (some 1,600 in manufacturing), is a prime example and my first port-of-call. It offers a variety of search options (the catalogue, engineering newsgroups, UK websites) and complementary services, including a recent advances in manufacturing (RAM) database ( www.eevl.ac.uk/ ram/ ). Resource type searching is also available, and some topics are conveniently listed as hot links. There are other examples of engineering gateways (most of which include manufacturing information) emanating from various countries. Although none offers as many resources as EEVL in this field, they are useful resources: s EELS (Sweden) (eels.lub.lu.se/); s AVEL (Australia) ( avel.library.uq.edu.au/); s CEN (Canada) (www.transenco.com/), and; s ICE (USA) ( www.englib.cornell.edu/ice/). A useful list of subject gateways is at the Pinakes site (www.hw.ac.uk/libWWW/irn/pinak es/pinakes.html). If you don find what you are looking for, then you could try one of the multi-subject gateways. s Galaxy (galaxy.einet.net/galaxy/ Engineering-and-Technology.html); s Yahoo! ( dir.yahoo.com/Science/Engineering/); s World Wide Web Virtual Library (www.eevl.ac.uk/wwwvl. html), and; s INFOMINE (infomine.ucr.edu/ search/physcisearch.phtml). Recently, Google (directory.google.com/Top/Science/Technol-

and AltaVista (dir.altavista. and some of the other global search engines have also acquired subject directories. There are various other, less extensive sites available. The two main UK sites are NISS ( www.niss.ac.uk/subject/ ) and BUBL ( bubl.ac.uk/link/ ),
com/Top/Science/Technology/)

ogy/)

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while European sites include DutchESS (The Netherlands) ( www.kb.nl/dutchess/) and DEf Vejviser (Denmark) (www.deff. dk/vejviser/ ). The library resources of many academic institutions will also act as quasi-subject gateways, so it may be worth looking at specialist libraries or ones with acknowledged good collections, if you know of some in your particular area.
Developments

SELLING ONLINE SECURITY & PRIVACY TIPS & TRAINING CYBER ROADMAP TECHNOLOGY INTERNET PRIMER

The change is on from gateways to portals. A portal is a door or gate, and helps steer users to where they need to go. There are a number of international projects aimed at creating better portals to help organize the chaos of the Web. Eventually you should be able to put in a search term and get not only websites, but also resources such as: document references, data, images and videos, courseware and training materials, lists of leading experts/like-minded people, events taking place in the field, product data and purchasing opportunities. Jim Corlett is a faculty liaison officer for engineering and computing at the Nottingham Trent University in the UK. He is a subject consultant on manufacturing and mechanical engineering for the EEVL website project, and writes for the e-journal ADAM with IT: Advanced Design And Manufacturing with Information Technology ( www.cimwareukandusa.com/ ). You can reach him by e-mail at: (jim.corlett@ntu.ac.uk)
References

All revved up and everywhere to go


Instead of chewing out employees for wasting time online, smart managers help employees find useful places to go
BY TODD PHILLIPS Theres no shortage of excellent websites that can help you do your job better. But you dont have time to waste clicking around to see if a website is any good. John Roth, the CEO of Nortel Networks, estimates that people already waste 2.5 billion hours a year waiting for pages to download. That cant be good for productivity. So, you need to know what you will get before you go. Weve pulled together this cyber roadmap of sites that we visit and find useful. Its not a scientific sample, and this brief list omits thousands of other worthy sites, (some of which weve listed on our website), but its a start. So what makes a good site? Content, speed, easy navigation, a detailed site map, well-organized collections of links with descriptions, and a good search engine.
Experts / Web consultants

1. Corlett, J., 2000. The Portal Shone: Resource Discovery in Engineering, In: Su, D. ed. Internet-Based Engineering: Applications and Case Studies. Nottingham: Nottingham Trent University in association with Professional Engineering Publishing.
s

Advanced Manufacturing Research


(www.amrresearch.com)

A great resource for reports, updates, and in-depth perspectives on developments in manufacturing. They arent beholden to any sponsors,

vendors, or industries, and since they dont push any one particular manufacturing philosophy, AMRs analysts have a reputation as straight shooters. Their insights are particularly useful in the muddled world of information overload where it s getting harder to sort our corporate spin, information, and paid advertising.

To get the really good stuff though, you have to register and pay. But since Im a press hack, I get their free reports, and they are top notch. Other notable analysts include: (www.forrester.com) (www.gartner.com) (www.yankeegroup.com) (www.idc.com) (www.arcweb.com)

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Industry Canadas Strategis Site: www.scc.ca/index.html Rockwell Automation: www.automation.rockwell.com Portals

SuperFactory (www.superfactory.com) If you get by the cheesy name, youll find an extensive compilation of links and resources for those interested in pursuing world class manufacturing. There are daily news
STANDARDS

updates from leading publications, you can sign up for email alerts and newsletters, and there are some interactive features of the site available if you register. One drawback is that there are no descriptions accompanying the links, and no rating system.

Cahners: ManufacturingNet (www.manufacturing,net) A comprehensive website that links the information from the Cahners group of industrial magazines. The site is divided into five communities: automation and control; design; manufacturing processes; plant operations and supply
U.S. and international sites
NSSN: A National Resource for Global Standards (www.nssn.org/) NSSN is a cooperative partnership between the American National Standards Institute (ANSI), a number of U.S. private-sector standards or-

chain. The sites creators say there are 400,00 pages of editorial content. Fortunately, the search engine helps you find what you are after.
Vendors

Rockwells online superstore ( www.automation.rockwell.com) We try to shy away from


Society of Automotive Engineers (www.sae.org/products/standards/st dsinfo/standard.htm) The SAE Standards site allows you to search by number, keyword or topic. A number of aerospace and ground vehicle standards are available for direct download in PDF format. Items are available in a variety of formats and update services are available. International Organization for Standardization (www.iso.ch/search.html) The ISO site offers the opportunity to search for a standard or a standardization project by keyword or phrase, by ISO number, by stage code, by International Classification code, by date the current stage was reached and by committee. Susan Salo is the Head of the National Research Councils Information Centre in London, Ontario. You can reach her at (519) 430-7003 or by email at: Susan.Salo@nrc.ca. You can visit the NRCs website at www.nrc.ca. You can read Susans complete report on standards sites complete with hotlinks on our website.

Internet sites set the standards


BY SUSAN SALO
Here are some of the standards sites that will be useful for manufacturers. Standards Council of Canada (www.scc.ca/index.html) The Standards Council of Canada exists to administer the National Standards System. This site includes the following databases: National Standards System Search Centre Standards Databases Includes both a Canadian standards database and connections to the sites of foreign and international standards databases; regulations databases Provide access to Canadian federal and provincial statutes, regulations and legislative information as well as the Regulatory Notices Database, a database of proposed regulatory changes; accreditations databases Contains information on Standards Council accredited laboratories and certification bodies scopes of accreditation; information search database Searches information not contained in the other databases, including information about ISO 9000.

ganizations, some government agencies, and some international standards organizations. NSSN currently has about 80,000 documents available for direct download, and they have introduced a system of deposit accounts, so it is no longer necessary to order on credit card. Global Engineering Documents (global.ihs.com/) Global Engineering Documents is part of a group of information companies known as IHS Group. The IHS Group of companies was founded in 1959, and is a major distributor of standards, specifications, and other technical publications. Global Engineering Documents maintains exclusive and primary selling partnerships with large Standards Developing Organizations such as UL, TIA/EIA, AGMA, AES, GM, AIA, and NEMA. Global also carries historical and military specifications from around the world.

Canadian sites
Canadian Standards Association International (www.csa-international.org/english/home/index.htm) The CSA International Site offers an online store where about 90 percent of documents are available for downloading in PDF format. These standards can be searched by any part of a product designation, product ID number, or related keyword or phrase. Items can be purchased in hard copy, CD-ROM, or as downloadable PDF files. There is contact information for certification and testing, information on CSA events, links to related sites and newsletters on the topics of certification, regulation, and standards development initiatives and publications.
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hyping any particular vendors sites, (particularly if they happen to be advertisers of ours) but Rockwell Automation is worth singling out because they ve taken their website strategy to the next level of ebusiness. Rockwell s web strategists hardwired their inventory systems and purchasing capability directly to their customers. When customers log on, they see a list of the products and services they already use, they have customized local pricing information, and pre-approval limits for who can buy what. Its an interactive, and easy-touse model that is showing early signs of success.
Business auctions / deals

Industrial e-commerce sites / services worth a look

(www.commerceone.com) (www.ariba.com) (www.iprocure.com) (www.mro.com) (www.industrialvortex.com) (www.verticalnet.com) (www.tradeout.com) (www.purchasingcentre.com) (www.netvendor.com) (www.thomasregister.com) ( www.industrialsourcebook.com)
Media

Visit these sites for bargains or to wheel and deal. (www.freemarkets.com) (www.e-steel.com) (www.metalsite.com) (www.bid.com) (www.priceline.com)

Manufacturing Systems (www.manufacturingsystems.com) A great site for tracking down information about information technology and software vendors. If you are looking for any type of manufacturing-related software, try their online Software Finder. It provides a detailed list of vendors, product descriptions and contact information. The site also features archived articles, and feature stories.

A good site for standards information (www.nssn.org/)

Industry Standard (www.thestandard.com) The best weekly guide to whats happening to the Internet, with trends, email newsletters and loads of research reports. Similar sites: (www.redherring.com) (www.cnet.com)

Who powers the Web?

For information about how to get wired to the Web, and for technical background information, try these sites. (www.cisco.com) (www.oracle.com) (www.nortelnetworks.com) (www.ibm.com)

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E-mail security and online privacy tips

If you dont like the rest of the world knowing your business, you might want to visit these sites. When you visit the anonymizer site it automatically generates a report of all the information your Web browser is revealing to the world. It will shock you. (www.tenfour.com) (www.anonymizer.com)
Associations

National Association of Manufacturers ( www.manufacturingcentral.net) These folks have done an impressive job building a major portal for manufacturers. Its an impressive and ambitious project that proves the NAM takes its e-business seriously and wants other manufacturers to do likewise.
Government

Industry Canada: Strategis (strategis.ic.gc.ca) (strategics.ic.gc.ca/sam) Who says government s cant do anything right? Not us. This is an excellent resource for all things Canadian that affect manufacturing. Youll find a host of government reports, links to various government departments and services, and external links to some of the worlds best resources for manufacturers. The Solutions for Advanced Manufacturers (SAM) site is particularly useful for tracking down companies that provide advanced manufacturing technologies.
Time savers

Interconnectivity the key to wired future


Before long, devices connected to the Internet will be as routine and mundane as the electrical outlets in our homes
BY SCOTT BURY The next wave of the Internet has already started to build. In this wave, everything electric will be connected.That means everything in the manufacturing enterprise will be part of an overall network thats based on Internet protocols, or TCP/IP: computers, printers, peripherals of course; the fieldbus network connecting automated manufacturing components like PLCs and the devices they control; your personal electronics, and things like the lights, heating and air conditioning, locks, clocks, telephones, and cell phones. This next wave of connectivity is going to enable you to do much, much more than you ever thought possible with a computer and a network. In this series of articles, we look at the rapid changes in the technologies that operate behind the scenes, and that power the point-and-click information revolution. The new connectivity and communications tools will boost productivity, profits, speed to market, and flexibility for those manufactures able to change. Soon, you can expect to see connectivity become a feature of everything you buy for your enterprise: every device will be connected to a network. And that network will be based on the Internet: your corporate intranet, a wide-area network (WAN) or virtual private network (VPN) based on TCP/IP, the computer protocols of the Internet. The first decision your IT managers will have to make will concern your network, not your computers. If you use an intranet a corporate network based on Internet protocols (IP) youve probably noticed the Web being used as the front end for an increasing number of businesses. Other managers, supervisors just about everybody involved in manufacturing will be spending a lot more

Google search engine (www.google.com) Where I start every search. Awesome power, lightning fast. Try using features like GoogleScout , and I m feeling lucky and youll have the power of the Web at your fingertips. Five star rating.

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time online, on the network. The major difference will be that they wont necessarily be using a computer. Once every device is connected, we ll be working online through other devices, including wireless phones and also through the manufacturing machines and systems that are connected. This will truly empower the knowledge worker on the shop floor by giving him or her access to information on machinery maintenance, repairs, upgrades, process improvements or whatever else he or she needs access to at any time, right at the system that needs repairs, says Jim Fall, president and CEO of Manufacturing Data Systems, Inc. (MDSI), an Ann Arbor, Michigan firm that develops and implements motion control software applications. The signs are already there: commerce over the Internet has grown to $101 billion in 1998 that is, actual sales of products and services to consumers or businesses over the Web, according to a study by Internet Indicators. This sector has also been growing at an incredible rate of over 50 percent per year. Industry analysts expect e-commerce in the business-tobusiness sector to explode in the next few years. There are also more computer and Internet-enabled devices available on the market, from industrial motion controllers to vision systems to medical instruments to automatic teller machines. These embedded electronics were originally developed to control one small set of functions, and to communicate with a single control system. As technology developed and the Internet became an indispensable part of almost every manufacturer in North America, users started to demand more functions and wider connectivity for such devices. continues on page 51

COMMUNICATIONS

Wireless digital communication, and especially of wireless Internet access (see article on page 50), is going to increase the use of intranets. Wireless communication and wireless Internet access are growing fast in some sectors, such as in remote locations like pipelines says Don Thompson, e-business practice leader in Deloitte Consultings Toronto operation. IP running over Ethernet wires is the most common corporate computer network, and thus enjoys some economies of scale. Furthermore, enabling machine-to-machine communication over IP doesnt require any new network installations or support, just extension of the existing network. Whats more, says Thompson, IP is faster and better than dedicated wide-area networks, and valueadded networks. Internet protocols also lend themselves to a wide range and oil wells, mines or logging operations, fleet operations, and large warehouses or storage yards.

Machine to machine
Machines that return phone calls
BY SCOTT BURY
Once every machine and device is connected to the Internet, which won t be far off, the traffic on the Internet is going to get a lot heavier. According to a study on machine-to-machine (M2M) communication by Deloitte Consulting, the growth of this type of communication is accelerating and could soon outstrip the already incredible growth of human-initiated communication on the Internet. Deloitte predicts that M2M communication could dominate the Internet by 2005. The first examples of machineto-machine communication over the Internet could include simple things such as automatic communication from a home electrical meter, for instance, to the local utility, which could base billing on actual energy use. Beyond that, however, is a new level of communication, strictly from one kind of machine to another. For instance, shop floor devices or machines now are connected over Ethernet networks to computerized maintenance management as well as production planning systems. As the control devices and the communications become more intelligent, these systems will be able to notify the management system when breakdowns occur, when its available for more production, or when it needs more inputs or raw materials. Inventory systems already can notify the accounting or purchasing system when inventories drop below critical levels. Adding more intelligence to the system will allow the networks to not only notify purchasing when inventories get low, but to initiate a requisition or even a purchase order, send the message electronically to the supplier and ultimately pay all without any human intervention. But ERP systems have been promising this level of automation for years. So, why move to Internet protocols? The main reason is cost, of machine-to-machine communications that are better than those manufacturers have been using for years to connect PLCs, drives, computers and other production machinery. IP is faster than fieldbus networks, even faster than those running over Ethernet, says Jim Fall, president and CEO of MDSI, which develops software for computer numerical controllers and for linking electronics to networks.

The expanding horizon


Just what will intelligent machineto-machine communication do? It will allow for intelligent building and plant management that will controlling heating, ventilation, air conditioning, fire, safety, elevators, security and electricity over the Web, or allowing them to adjust automatically for weekends and holidays or emergency situations. So, how do you get started? Getting into M2M communication can

be done gradually, and relatively cheaply. First, you need a fast, reliable and secure connection to the Internet, with appropriate security in the form of firewalls, data encryption and a password system. A robust intranet is also necessary. Then, most of the actual communication technology must be installed. Shrink-wrapped applications are still a few years off. Your software will also have to communicate with your legacy applications. M2M over the Web so far is still very new, and most manufacturers who do it now are blazing new trails, reaping huge rewards in some cases, but also incurring costs and risks. Still, M2M promises to deliver cost-savings, time-savings and faster time to market for those who do it correctly right now.

Developments that will push this further


The rapid growth in all types of Internet-enabled devices will fuel more M2M communication. The growing interest in linking all of an enterprises information technology, and the use of IP for its inherent and economic advantages, will also help spur M2M growth.

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Uses what it will enable


But manufacturers have found many uses for wireless communications within automated assembly lines, in warehouses and distribution centres, as well as among the sales and customer service departments. A study by the Gartner Group found that in-house workers can be away from their desks or workstations up to 40 percent of the time. This can be a real problem when it comes to supervisors or maintenance personnel. Just think of the delays you often encounter when you need a mission-critical machine or device
CONNECTIVITY

mobile computing and communications into the enterprise (asset management system). The results, says a company news release, will be faster response to service requests or equipment failures, and better access to information on the site which will enable workers to complete work properly, faster. The two companies see their joint venture as being especially useful in mining, transit and telecommunications fields industries with assets, resources and needs that are scattered geographically.

The Internets role


Where does the Internet fit into all this? At the simplest level, as IP technology is taking over in-plant communications in the form of intranets, wireless LANs and wireless Ethernet will also be supporting IP. Wireless communications anywhere in the manufacturing operation simplify some tricky communications, because you no longer have to drill through walls and string miles of cables around machines or between buildings. But more than this, the Web browser become a standard interface which supports a very broad range of activities. Wireless Web access extends the reach of knowledge workers to literally around the globe. Not having to be physically plugged into the network frees them up to do more valuable work, anywhere. Combining wireless communications with small, Internet-connected devices increases the applications exponentially. Alan Reiter points out the future of smart devices Web-enabled, mobile data devices that can interpret and respond to incoming data. The applications include accessing e-mail wirelessly and integrating the messages into calendars and address books, downloading highly-filtered information services, retrieving intranet databases or simply browsing the Web. Users could receive updates to existing applications or receive new applications via wireless networks or via the Web. Combined with machine-to-machine communications, these new devices could forever change the way manufacturers stay in contact and stay in control.

fixed. Companies are starting to equip their maintenance and engineering people, as well as key supervisors, with wireless phones or pagers for inside the plant, or for general use within and outside the walls of the enterprise. Spectralink makes a series of million by 2005. These numbers are probably unrealistic. There are several roadblocks ahead to surfing the Web through your cellphone. As John Davison of Ovum is quoted in the Internet economy magazine Industry Standard: Wireless Net access is not surfing, but more of a gentle paddle. (www.thestandard.com ) Wireless devices are necessarily small, with tiny screens that arent suited to the surfing paradigm that evolved on big-screen computers. Even connecting your laptop computer to the Net through a wireless modem or a cable to your cell phone gets prohibitively expensive very quickly. There s a wirelessWeb culture clash , according to mobile communications and Web consultant Alan A. Reiter of Wireless Internet & Mobile Computing, based in Chevy Chase, Maryland. The wireless industry mindset is different from the computer communitys, he explains. Much of the information you obtain via the Internet isnt worth paying for in a wireless environment. For example, for most people most of their e-mail is neither time-sensitive nor important. Internet users get free access at work or, in the case of the U.S., pay about $19.95 a month for unlimited access. How much of a premium would you pay a wireless operator to transmit your e-mail messages? wireless phones that provide clear voice and data communications within a plant, even where electrical interference makes walkie-talkies useless. Meanwhile, wireless local-area networks (LANs) bring Ethernet communication speed without the necessity of running wires all over the place. Radio Beacon and RF Gateway are two technologies that link enterprise-management computer systems and inventory systems to mobile computing devices. For instance, Priva Sport, a manufacturer of sporting clothes in Montreal, provides its inventory pickers with hand-held computers and bar-code readers. The RF-based system communicates the bar code data to the inventory system automatically, reducing pick-and-place order errors dramatically. Micromains MS2000 software connects computerized maintenance management systems (CMMS) with palmtop computers like the Palm II or Symbolic Technologies Palm Terminal units. The system can send emergency or breakdown alarms and even remote diagnosis data to people with these relatively cheap devices. Another CMMS developer, Indus, has a joint venture with iMedeon, which develops work execution systems, or WES. The new technology, iAnyware, integrates

The wireless Web


Mobile access devices change everything
BY SCOTT BURY
Internet connectivity, smaller electronic devices and thin-client technology: where they all come together in an impressive way is in wireless communication. Wireless technology has already taken the world by storm. The growth of the wireless phone market is nearly as impressive as the Internet explosion itself. Consider that, outside of North America, more people use wireless phones than surf the Web. Combining the two seems irresistible. Its already starting with Internet- enabled wireless phones and personal digital assistants. All the major wireless phone service suppliers offer Internet-ready phones which can receive text messages from other wireless phones, e-mail from your ISP and even some limited Web browsing. Palm-top computers from Palm, Nokia, Ericsson and others now include Web browsers. CAP Gemini, formerly the consulting arm of Ernst & Whinney, along with ebusiness developer Corechange, Inc., predict that the ratio of U.S. Internet users who use wireless phones for wireless data applications will increase from three percent to as much as 78 percent this year. Another research firm, Ovum, predicts that the number of Internet users worldwide who get to the Web through wireless technology could hit 484
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JULY 2000 ADVANCED MANUFACTURING

TECHNOLOGY

Hence the growth of embedded Web browsers. Embedding Web connections into a wide range of noncomputer devices requires an operating system that can fit in the restricted memory of a cell phone or process control system. Currently, there are three main contenders: Windows CE, embedded Java and a new version of OS/2. Microsofts Windows CE is a small operating system for portable devices that allows communications with Windows-based personal computers. The first devices to use Windows CE were palm-top computers, but a growing number of consumer electronics such as game systems, settop boxes, pagers and Web-ready cell phones use embedded Windows CE. Sun Microsystems embedded Java technology uses the Java Virtual Machine running on top of the embedded devices operating system. Java is platform-independent, yet allows a range of high-level functions with relatively small amounts of coding. And because its platformindependent, the same type of functionality can be given to different products. Its being used in products from mobile phones to printers and network switches, medical instruments and industrial process controllers. IBM is almost ready to release an embedded Web browser called NetDiver, which is based on Suns Java technology. NetDiver takes on 700 kilobytes of memory, plus another four megabytes of RAM for Web caching. Running on an embedded version of the OS/2 operating system, its a sign of a new possible direction for the development of this alternative OS to Windows. It could be found soon on medical instruments, handheld computer terminals used in warehousing and manufacturing, process and machine control systems as well as

wireless phones and automated teller machines. Within manufacturing concerns, the various enterprisewide systems like ERP, MES, SCADA, and even newer acronyms like Enterprise Asset Management (EAM) and Product Lifecycle Management (PLM) are communicating with each other, and sharing data. Increasingly, this is done through Internet connections. The emergence of the Application Service Provider is another signal that the Internet is becoming the computer

stone, which develops technology that enables ASPs and ASP software. Perfect technologies rarely get out of the lab, he explains, because to be perfect they typically only fit a very limited set of criteria. The Internet, however, is easy to use and widely accepted. Because its everywhere, there is a great wealth of solutions, and a lot of expertise to help users implement and troubleshoot what theyre trying to do on the Internet.
MACHINE-2-MACHINE

The biggest reason for the use of the Internet for ma-

Basing machine-to-machine communications on IP means setting up protocols and security in software. This makes it so much easier to allow certain people access to certain sections of the system, according to whatever criteria you like; maintenance people need certain parts of the data, but not others; operators would be able to access a limited number of devices; managers would be allowed to monitor, but not change anything, etc. Furthermore, IP is robust enough to handle the commu-

The Internet is easy to use and widely accepted. Because its everywhere, there is a wealth of solutions, and a lot of expertise to help users implement and troubleshoot what theyre trying to do online.
software platform, more than the type of operating system or computer manufacturer. In the ASP model, the user or software customer doesn t own the software, but rather rents it pays for the software based on the time they use it. The application stays on the developers computer server, and the customer connects to it through the Internet. ERP systems, Computerized maintenance management systems from such companies as RDMI, Tabware, Wonderware and PSI have or soon will have ASPtype services, and the ASP model is spreading through the Enterprise-oriented applications. (For Scott Burys online
only exclusive report about ASP software visit our website: www.advancedmanufacturing.com )

The Internet and its communications protocols have a number of advantages. IP is imperfect, and its everywhere, says Al Smith, vice-president of software development at Blue-

chine-to-machine communication is cost, says Don Thompson, a consultant with Deloitte Consulting in Toronto. Since most corporate IT infrastructures already use intranets, it makes sense to base new communications efforts on it. They dont need to add new physical networks or hire more experts to maintain a different type of network. The Internet is being used even at the shop floor level. For instance, OpenCNC 5.1 from Manufacturing Data Systems, Inc. (www.mdsi2.com) connects computer numerical control devices (CNCs) through intranets or the Internet to ERP, production planning, or maintenance systems. Fieldbuslevel networks arent oriented for communication between platforms, or between buildings or plants, says Jim Fall, CEO of MDSI. Basing shopfloor data communication on IP, on the other hand, makes it simpler to connect those systems with enterprise management systems.

nications. It supports real-time communication (as opposed to batch processes) and it s faster and more robust than the virtual private networks or value-added networks that came before it. As Jim Fall points out, it has bandwidth to spare. The Internet is where all the exciting developments are happening. Technologies such as Java and ActiveX allow developers to build a wide range of tools, controls and functions to address almost any manufacturers needs. New technologies such as the Extensible Markup Language (XML) are now making it easier to share data between different application programs, and to set up computers to take actions based on criteria for instance, to order supplies when inventories reach a critical low point. Schneider Electric s new Transparent Factory ( www. schneiderelectric.com) is an architecture for communication and connection of the various

www.advancedmanufacturing.com

ADVANCED MANUFACTURING JULY 2000 51

OVERVIEW PREDICTIONS TECHNOLOGY MANUFACTURING BUYING ONLINE SELLING ONLINE SECURITY & PRIVACY TIPS & TRAINING CYBER ROADMAP TECHNOLOGY INTERNET PRIMER

elements, networks, systems and electronic devices, enabling front-office management systems such as ERP to communicate, via TCP/IP, with plant operations devices including PLCs. Basing the communication on the Internet makes for an elegantly simple solution.
The holy grail: the lights-out plant

With the Internet used within and between enterprises, communicating between management, production planning, execution, maintenance, sales, accounting, shipping and purchasing activities, the totally automated, 24-hour, lightsout factory might not be far off. It has already arrived in some plants: the manufacturing operation that can be operated completely by remote control, with no one on site other than maintenance personnel when needed. Using Internet protocols makes the development of new communications simple, fast and relatively cheap. And while the Internet seems popular now, its going to grow even faster as more Web-ready devices hit the markets. All this means is that having a handle on all the data that manufacturers need to maximize their efficiency and profits, as well as the ability to control every action in the operation, is going to be in your hands sooner than later. Scott Bury is an associate editor with Advanced Manufacturing and a frequent contributor on technology issues and manufacturing software. You can reach him by email at s-bury@home.com.
You can read longer versions of Scott Burys series of articles on Internet technologies and an online only article on the software powering the Web on our website (www.advancedmanufacturing.com)

Brush up on your Internet knowledge


Theres no getting around the fact that youll have to learn a new language to join the online world
BY TODD PHILLIPS Wander down to your IT department, ask a straight question, and youll get answers in some obscure new techno-code-language. So what do you do? If you are like most managers, you nod your head, pretend you understand, and just let them do whatever the heck they were doing before. Fear not, here we present you with an Internet primer that will put you on equal footing with that 20-something Bill Gates look-alike who is now, seemingly, in charge of your manufacturing strategy.
Aggregators:

when you register with website firms like Mercata (www. mercata.com ) and with the newly-named MobShop (www. mobshop.com) your small quantity order is pooled with other purchases to negotiate bulk purchase rates from manufacturers. Auction sites: such as (www. bid.com) and (www.freemarkets. com ) facilitate the purchase and sale of a huge range of

products and services directly between individuals in the form of an online auction.
Browser or Web browser:

software that allows you to surf the Internet. Netscapes Navigator and Microsoft Internet Explorer are examples. Clearing houses: such as ( www.priceline.com ), let consumers access discount prices by bidding for unsold, time-sensitive inventory.
Commodities exchanges:

such as ( www.ariba.com ) and

( www.metalsite.com) facilitate the buying and selling of goods between a vast number of companies by standardizing the process and making it more efficient. Domain name: The Internet name assigned to an organization. In the U.S. domain names are handled by the InterNIC (rs.internic.net). E-business: activities carried out over computer-mediated channels. E-commerce: transactions

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JULY 2000 ADVANCED MANUFACTURING

www.advancedmanufacturing.com

carried over computer-mediated channels that comprise the transfer of ownership of the entitlement to use tangible or intangible assets.
Electronic Data Interchange (EDI): transferring business in-

formation from one computer application to another in a standard electronic format. EDI messages usually travel over a private, value-added network (VAN) but could go over the Internet. FAQ: Frequently Asked Questions. The best way to find information on a subject you are interested in is to use one of the search engines available on the Web. FTP: Short for File Transfer Protocol. It is a long-existing Internet standard used for transferring files between different machines on the Web. The standard has two modes, ASCII and Binary. FTP archives are repositories of files (often compressed) that

Internet users can access anonymously using either an old-style command line ftp program, or more recently, using GUI interfaces. HTML: Hypertext Markup Language most documents that appear on the World Wide Web are written in HTML. Hypertext: A document that contains Hyperlinks, a.k.a. Links or Hot Spots. Newsgroup: Internet discussion groups where people post and respond to messages regarding an abundance of topics. Approximately 15,000 newsgroups exist today, covering every imaginable topic. PPP and SLIP: Point to Point Protocol and Serial Line Protocol. These are both serial line protocols used for Internet access typically over phone lines. SLIP is TCP/IP based. PPP is protocol independent, i.e., it can be configured to handle different types of network packets in addition

Percentage of top CEOs on-line


by country (1988)
Canada United States Autralia United Kingdom France Spain Italy Germany Japan

o%

20%

40%

60%

80%

100%

Percentage of those surveyed

Figure 1: Canadas senior execs lead the pack in online access

to TCP/IP. TCP/IP: Transfer Control Protocol / Internet Protocol. The computer networking standards used for most communications on the Internet. URL: Uniform Resource Locator. URLs specify a location for a document and a method for accessing it. For an excellent online Internet

and technology dictionary, with a robust search engine, visit (www.webopedia.com) For the best in Internet research As M stats, visit (www.nua.com). s
Sources: www.endpoint.com, The Boston Consulting Group, Statistics Canada, www.purchasing.com

ANDERSEN CONSULTING SURVEY

ADVANCED MANUFACTURING JULY 2000 53

RESEARCH REPORT PART THREE

In our last two installments, we introduced, then expanded on the concept of a flexible scalable manufacturing system that can be reconfigured to meet changing customer demands. The final part in this series summarizes the research results, and provides the detailed bibliography compiled by a group of leading manufacturers with the Consortium for Advanced Manufacturing International (CAMI). We have only presented excerpts of CAMIs full 74-page report, so if youd like to see the full report, complete with graphics, diagrams and programming notes, visit our website (www.advancedmanufacturing.com) click on the Research Reports link and follow the instructions.
o far in this series, weve introduced the basic concept of a flexible manufacturing system work cell. Figure 1 on page 55 helps illustrate the conceptual model of such a cell. We also delved further into the reference architecture needed to support such a system, and modelled the work cell. In this final article, well look at the controller, introduce the virtual manufacturing device, and summarize our findings to date.
Control

BY CHUCK ANDERSON

The task of the controller in the system can be broken down as: s Coordinate the sharing of resources among the processes/ jobs resolving conflicts and avoiding forbidden states; s Choose a transition from among all the transitions allowed by the supervisor;

Send out commands to the resources and receive responses from the resources. These three tasks are divided between the supervisor, the scheduler and the dispatcher. Supervisor:The main control task is to coordinate the sharing of resources while allowing concurrent processes to run through the system. To allow for the dynamic introduction of new and alteration of old job routes in the system, automatic
s

synthesis of supervisory controllers must be resorted to. Scheduler: The supervisory controller, at each state, offers the scheduler a number of possible transitions or actions to choose from. The schedule chooses one among several possibilities according to some optimal strategy. The supervisor guarantees the liveness and safeness of the system. Scheduling can be done off-line or in real-time. A separate scheduling algorithm can

The Consortium for Advanced Manufacturing International is a not-for-profit cooperative consortium established in 1972 to support research and development in areas of strategic importance to manufacturing industries. This article presents part of CAMIs research findings on scalable flexible manufacturing one area of great interest for the consortiums members. For more information about CAMIs work on this or other topics, visit their website at: www.cam-i.org.
54 JULY 2000 ADVANCED MANUFACTURING

be run to select one alternative from among several. Dispatcher: The dispatcher is responsible for sending command actions to the appropriate resources and receiving messages from the resources. It controls the physical system through the resource modules. The device drivers communicate with the physical device according to the messages it receives from the dispatcher.
Synthesis of complex manufacturing systems

our building block (the work cell), we can synthesize larger systems by using these modules as resources at the higher levels. Each higher level would have its own supervisory controller.
Resource models and job models

Data/control/status WORKSTATION CONTROLLER I/O driver Proc. driver Trans. driver Stor. driver

Processor

Transport

Buffer

We claim that the architecture has a high degree of flexibility in that the controller is modularized and the control policies are automatically synthesized and resynthesized whenever there is a significant reconfiguration of the system. Reconfiguration of the system includes addition of new resources, new product routes, and changing existing product routes. Since we started out with a self-contained, autonomous module as

A single processor work cell can be thought of as a unit consisting of transportation units, storage units and a single processing unit each functioning autonomously over a predefined set of instructions. The work cell is responsible for physically interfacing with devices that bring the jobs to it, internal handling, transportation and the temporary storage of the jobs during their processing in the cell. The cell controller coordinates the functioning of these units to process the different jobs sent to the work cell. The most basic building block of the system is a programmable

Parts

I/O unit

Figure 1: Model of a scalable flexible manufacturing work cell.

machine (or device).


Behaviour model

The controller architecture proposed in our system use a client-server architecture where all the devices/resources in the system synchronize their activities by sending messages to the central controller. Each device in the system has a cor-

responding module in the cellcontrol system, called the virtual manufacturing device (VMD). The VMD handles the resource-specific control tasks. The devices or the resources that may comprise a work cell can be classified based on their functionality: s Processors that include the

ADVANCED MANUFACTURING JULY 2000 55

RESEARCH REPORT

machine tools or measuring stations of a flexible manufacturing system; s Transportation units that move the products between processors and storage units.

terface places for the jobs. Depending on the type of device the VMD is controlling, they are classified as processor modules, storage modules, transport modules

Determining the NC programs or the device programs to be executed; s Downloading NC programs or the device programs to the device;
s

Each device in the system has a corresponding module in the cell control system, called the virtual manufacturing device (VMD). This VMD device handles all of the resourcespecific control tasks.
These include the conveyors, AGVs, etc.; s Storage units that hold the products between the different processing stages. These include automatic storage and retrieval systems (ASRS), queuing carousels, re-circulating buffers; s Ports that act as material inor port modules. The processor module is controlled by the cell controller and is responsible for the correct commands being sent to the physical device. The module supports the following functions: s Keeping track of the current state of the device;
s A set of control functions that

control the device operation; An interface for communicating to/from the device; s Keeping track of the different parts in the device and their states; s Keeping a log of all activities that have taken place in the device;
s

Uploading processing data from the device. The transport module is also controlled by the cell controller and is responsible for the transportation of the part to be sent to the processor/storage unit that performs the next operation. The transport module supports the following functions: s Establish a set of control functions that control the device operations; s Create an interface for communicating to/from the device; s Keeps track of the different parts in the device and their states; s Keeps a log of all activities that have taken place in the device; s Determines the way the move operation is to be carried out, for example which program to execute and which gripper to use; s Downloads robot programs to the transport device.
s

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JULY 2000 ADVANCED MANUFACTURING

Work cell and resource model implementation

We use an object-oriented approach to model the various resources of the FMS. Using multiple inheritance and function overloading, a uniform operational logic can be adopted for different cell configurations. The program consists of object models for the transportation units, the storage units, the processor unit and the I/O ports. It also consists of a control module that is based on the supervisory control theory. From the implementation
BIBLIOGRAPHY
s [1] Computer Integrated Manufacturing (CIM) Framework Specification Version 2.0 , SEMATECH. INC,1998. s [2] Virtual Factory Equipment Interface (VFEI) Version 2.2, SEMATECH. INC, 1995 s [3] Ralph Mackiewicz, An overview to the Manufacturing Message Specification, http://litwww.epfl.ch/MMS/ mms_IntroSISCO.txt, 1994. s [4] Z.A. Banaszak and B.H. Krogh, Deadlock avoidance in flexible manufacturing systems with concurrently competing flows, IEEE Trans. on Robotics and Automation, Vol 6, pp724734, 1990. s [5] J. Brzezinski and J-M. Helary and M. Raynal and M. Singhal, Deadlock models and general algorithms for distributed deadlock detection , Technical Report, The Ohio State University, 1994. s [6] H. Cho and T.K. Kumaran and R.A. Wysk, Graph-theoretic deadlock detection and resolution for flexible manufacturing systems, IEEE Trans. on Robotics and Automation, Vol.11, 1995, pp413-421. s [7] E.W. Dijkstra,Cooperating Sequential Processes, Technical Report, Technological University, Eindhoven, Netherlands, 1965. s [8] Open System Architecture for CIM, Research Reports ESPRIT Project 688. AMICE, Springer-Verlag, Vol. 1, 1989. s [9] MMS: A Communication Language for Manufacturing, Research Reports ESPRIT Project 7096. CCECNMA, Springer-Verlag, Vol.2, 1995. s [10] A.Adlemo and S.-A. Andreasson and M.Fabian and P.Gullander and A.Hellgren and B.Lennartson and T.Lil-

point of view, we require communication software that would handle message passing between the different resources of a work cell. Using the principles of distributed object technology, we could implement each resource in the work cell as a distributed object. A resource, modeled as a distributed object, has a well-defined interface, describing the data and the methods that it supports.
Work cell configuration

The work cell can be set up to support different manufacturing environments. A work cell

can be configured to have multiple buffers, separate I/O ports, combined storage/transportation and so on. The ports associated with each device and the connectivity information is defined in the work cell configuration file. On accepting a job, each device runs an appropriate program. These programs are device dependent. The work cell controller has no control over this. This way the operational logic is separated from the processing logic. When the job in a device is ready to be sent

out (when processing is complete), an appropriate signal is sent to the cell controller. The cell controller schedules the next event after ensuring that this event results in a deadlock free operation.
Conclusions

In this report, we described a generic system architecture for flexible manufacturing systems. Furthermore, we showed how the product specification is integrated with the control system. The approach adopted can be summarized as follows: s The use of object-oriented ap-

jenvall and L.Pernebo, Models for Specification and Control of Flexible Manufacturing Systems, Technical Report, School of Electrical and Computer Engineering, Chalmers University of Technology, Goteborg, Sweden., 1997. s [11] M.P. Fanti and B. Maione and S. Mascolo and B. Turchiano, Eventbased feedback control for deadlock avoidance in flexible production systems,IEEE Trans. on Robotics and Automation, Vol.13, pp.347-363, 1997. s [12] Computers and Intractability : A Guide to the Theory of NP-Completeness, W.H. Freeman and Co.,New York,1979. s [13] A. Giua and F. Dicesare, Petri net structural analysis for supervisory control, IEEE Trans. on Robotics and Automation, Vol.10, 1994, pp.169184. s [14] E.M. Gold, Deadlock prediction: Easy and difficult cases, SIAM Journal of Computing, Vol.7, 1978, pp.320-336. s [15] A.N. Habermann, Prevention of system deadlocks, Comm. ACM, Vol.12, 1969, pp.373-377. s [16] A survey on Manufacturing Technology, The Economist, March 5th, 1994, pp.3-18. s [17] P.F.Drucker, The emerging theory of manufacturing, Harvard Business school, May-June, 1990, pp.94-102. s [18] D. Upton, A Flexible Structure for Computer-Controlled Manufacturing Systems, Manufacturing Review,Vol.5, 1992, pp.58-74. s [18] C.A.R. Hoare, Communicating Sequential Processes , Comm. ACM 21, Vol.8, 1978,. s [19] R.D. Holt, Some deadlock

properties of computer systems , ACM Computing Surveys, Vol.5, 1972, pp.197-207. s [20] J.E. Hopcroft and J.D. Ullman, Introduction to Automata Theory, Languages and Computation, Addsion-Wesley, Reading, MA, 1979. s [21] P. Kumar and K. Kothandaraman and P.M. Ferreira, Scalable and Maximally-Permissive Deadlock Avoidance for FMS, IEEE Conf. on Robotics and Automation, May 1998. s [22] P. Kumar and P.M. Ferreira, Hierarchical Control of Flexibly Automated Manufacturing Systems , Japan-USA Symposium on Flexible Automation, June 1998. s [23] M. Lawley, Structural Analysis and Control of Flexible Manufacturing Systems, PhD Thesis, University of Illinois at Urbana-Champaign, 1995. s [24] M. Lawley and S. Reveliotis and P.M. Ferreira, FMS structural control and the neighborhood policy: Part 1 and 2, IIE Trans. on Design and Mfg, 1997. s [25] Jo Wyns, Hendrik Van Brussel, Paul Valckenaers and Luc Bongaerts, WorkStation Architecture in holonic manufacturing systems, Cirp Journal on Manufacturing Systems, Vol. 26/4, 1996, pp220-231. s [26] A. Silberschatz and P. Galvin, Operating System Concepts, Addison-Wesley, 1994. s [27] T. Murata, Petri Nets: Properties, analysis and applications, Proceedings of the IEEE, Vol.77, 1989, pp.541-580. s [28] J.L. Peterson, Operating System Concepts,Addison-Wesley, 1981. s [29] M. Singhal, Deadlock detection in distributed systems , IEEE

Computer, Vol. 22, 1989, pp.37-48. s [30] P.J. Ramadge, W.M. Wonham, Supervisory control of a Class of Discrete Event Processes}, SIAM Journal of Control and Optimization, Vol 25, No.1, 1987, pp.206-230. s [31] S. Reveliotis, Structural Analysis and Control of Flexible Manufacturing Systems with a Performance Perspective, PhD Thesis, University of Illinois at Urbana-Champaign, 1996. s [32] Prashant Kumar, Optimal Deadlock Avoidance Policies for Resource Allocation Sysytems, MS Thesis, University of Illinois at Urbana-Champaign, 1998. s [33] Karthik Kothandaraman, An Architecture for control and specification of flexible manufacturing systems, MS Thesis, University of Illinois at Urbana-Champaign, 1998. s [34] S.A. Reveliotis and P.M. Ferreira, Deadlock avoidance policies for automated manufacturing cells, IEEE Trans. on Robotics and Automation, Vol.12, 1996, pp.845-857. s [35] S.A. Reveliotis and M.A. Lawley and P.M. Ferreira, Polynomial-complexity deadlock avoidance policies for sequential resource allocation systems,IEEE Trans. on Automatic Control, Vol.42, 1997, pp.1344-1357. s [36] Grady Booch, Object-Oriented Design with Applications , Benjamin/Cummins, Redwood City, California, 1991. s [37] N. Viswandham and Y. Narahari and T.L. Johnson, Deadlock avoidance in flexible manufacturing systems using petri net models, IEEE Trans. on Robotics and Automation, Vol.6, 1990, pp.713-722.

ADVANCED MANUFACTURING JULY 2000 57

RESEARCH REPORT

proach to model the various FMS resources as resource modules or VMDs. The classification of the various resources are classified into four principal types

s Automatic synthesis of a supervisory controller given a set of resources and the product routes. The use of automatic synthesis of supervisory con-

hierarchical control policy for ensuring deadlock-free behaviour in such a system. We then applied this methodology to model a FMS setup under the frame-

The use of distributed object technology to implement the system enables us to run each resource module as a distributed object / server on a computer node. This allows the operator to access the system at different control levels.
based on their behaviour: These serve as the basic object types for the resource models in the architecture: Transport unit; Storage unit; Processor unit; I/O port unit; s Specification of job routes as a sequence of job stages; trollers allows a high degree of flexibility in the system. We have suggested hierarchical synthesis as a strategy for rapidly configuring large systems. We ve also developed a methodology for formally modeling hierarchical resource allocation systems, and proposed a distributed work of our architecture. The use of distributed object technology to implement the system also enables us to run each resource module as a distributed object/server on a computer node. It is possible to access the control panels associated with each resource from a separate

computer and this allows the operator to access the system at different control levels (the resource or the work cell). The software module we have implemented based on this architecture is highly configurable to suit the needs of a variety of manufacturing enviAs M ronments. s Chuck Anderson is a program director for the Consortium for Advanced Manufacturing Internationals (CAM-I) Next Generation Manufacturing Systems group. Chuck is a regular contributor to Advanced Manufacturing, and you can reach him at (817) 860-1654, ext. 144 or by email at: chuckcam@gte.net
For a Portable Document Format version of CAMIs 74-page report on Scalable Flexible Manufacturing click on the Research Reports link on our website at www.advancedmanufacturing.com

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JULY 2000 ADVANCED MANUFACTURING

INFORMATION TECHNOLOGY

Echange for the better for manufacturers


Part four in our six-part series on harnessing the power of information technology to help you with your lean enterprise transformation.
Introduction by David Berger, story by Gail Petersen

PART 4

This article helps explain why the e words are about to change every-

merce allows consumers to deal directly with base providers of goods and services, moving them one step closer to lean through elimination of one or more intermediaries and the associated nonvalue-added processes. The future role of the digital economy in moving to lean is critical. The greatest potential stems from suppliers, customers and yes, even competitors collaborating in ways never before imagined, from sharing standard data to simplifying processes.

thing for manufacturers. The world of e brings us new opportunities for creating a lean environment. It starts with the simple, internally-focused improvements resulting from elements of an e-workplace, such as email and the intranet, for better communications and sharing data across your enterprise. E-business has the greatest impact on lean throughout the supply chain. This includes business-to-business knowledge-sharing (eg., product design data), elimination of paper (eg., quotations, purchase orders, invoices), removal of nonvalue-added activities (eg., e-procurement for eliminating many manual processes), and value creation (eg., electronic malls, exchanges and auctions for trading goods and services worldwide). E-commerce represents a new business-toconsumer (B2C) access point, hot on the heels of the last breakthrough, the call centre. B2C e-com-

The e is for efficiency


by Gail Petersen

The Internet explosion has provided the power to shrink the globe and dissolve boundaries. Combined with the digital plant, so named for its dependence on information technology, manufacturing has a new and unprecedented step-up improvement opportunity to explore and leverage.
www.advancedmanufacturing.com

What does all of this mean? Lets call it the world of the extended manufacturer with an eye on the customer. In addition to the capability introduced internally by integrating information, manufacturers are able to link electronically to all their stakeholders to capture information at its source. Forwardthinking executives have invested heavily in technology within their plants while simultaneously stressing the codependence of facility, equipment, systems and most importantly, people. Such a focus has brought extraordinary agility to the manufacturing process. Compounding this opportunity, the Internet has touched off a revolution in the way that individuals, organizations, industries and countries communicate and interact. It represents a powerful new channel to exchange and disseminate information, provide services, and
ADVANCED MANUFACTURING JULY 2000 59

INFORMATION TECHNOLOGY

E-commerce
Information ebbs and flows
Pr ur oc

Information flows in, around, and then back out again


For true connectivity, your manufacturing plant must be able to handle incoming orders, queries and emails, process the information requests at the source, and then send out the
Lo Pr od t io uc n
D

em t en m em ag an ch ar se Re B

required information all without a hiccup in your manufacturing operations. In our plant floor diagram, we see that e-commerce information systems touch all departments, and must be accessible to those outside your facility.
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Key
A B C D E

Design engineering (CAD/CAM) Product data management (PDM) / knowledge management E-commerce / customer relationship management Enterprise Resource Planning (ERP) Enterprise Asset Management (EAM) / Computerized Maintenance Management Systems (CMMS)

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JULY 2000 ADVANCED MANUFACTURING

Fin a

lA

ss em

bly

In fo rm at io n te ch no
E B

g M n te ain E an La ce

lo gy Su Sh ip pi ng Su bm se as Re ce n ivi g Su a bss em bl y bl y

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deliver transactions. Software and computer networks have emerged as the backbone of manufacturing in North America. They weave an integrated fabric of highly automated, interdependent triggers and events designed to meet the demands of the customer. At the heart of the plant, integrated enterprise suites and best-ofbreed software applications manage the integrated supply chain. Plants are able to customize products in quantities of one while churning them out at mass-production speeds to satisfy consumer demands by using real time computer systems to exchange and use information to drive decisions. As my colleague Bill Cloke pointed out in his discussion of lean in the March 2000 issue of Advanced Manufacturing, a lean company is driven by a single customer-focussed mission. By connecting over the Web with the customer, manufacturers can improve customer loyalty, help to streamline

wants and needs. And equipment vendors are able to remotely detect the wear on their equipment and trigger maintenance work as required. In the digital factory, middle players are eliminated and communication occurs directly. The manufacturing world becomes very tight and intimate, dependent on the relationship and health of our vendors, suppliers, customers and distributors. Our traditional brick-and-mortar fixed-plant manufacturing world is finding its way to leverage this high tech revolution which is moving at lightning speed. We are in the midst of a fascinating migration in the traditional capital intensive manufacturing plant world as it moves to the 21st century world of click-and-mortar collaborative competition. While the boundaries of traditional manufacturing have been blurred by linking production seamlessly to both suppliers and customers, massive Internet

TIPS TO AVOID E-TRAPS


Partner. Collaborate. Carefully select trusted e-partners and best-in-class service providers. Integrate your business inside and out with robust and flexible solutions for enterprise application integration and business-tobusiness collaboration. Develop e-commerce applications faster and gain a competitive advantage using pre-built components for common e-commerce functions. Ensure a secure and reliable interchange of information using robust technology to seamless connectivity and integration across the e-space. Drive e-tool selection from business needs, not technology alone. Always map new e-dependent processes first to define your business needs, then finalize the e-tool.

Our traditional brick-and-mortar manufacturing world is finding its way to leverage this high-tech revolution which is moving at lightning speed.
business-to-business processes, and increase profitability.

Personalize customer relationships with pre-built services and easy-to-use technology that will dynamically define application behavior and deliver content tailored to the customer. Develop relationships with distribution channels to ensure that your products are delivered on time to the customer. Use information flow to reduce finished

E and the principles of lean manufacturing


The principles of lean manufacturing focus on reducing time and eliminating waste. Being lean is all about reducing time. Seamlessness is the secret to timeliness. Enter technology and the world of e. This enables us to integrate business systems across the Web and capitalize on the power of the Internet. A simple example illustrates this point dramatically. We have found the most common cause for delay is the repeated handling of data which also introduces defects in the form of errors. In the world of e we are able to capture data once only, then manage it seamlessly across the supply chain. We are able to reduce cycle time by marrying supply both electronically and in real time to demand. Customers are able to enter their own orders and configure products to their own

exchanges drive the procurement of raw materials, maintenance repair parts and finished goods. These exchanges are created by the most powerful industry giants who now collaborate in these new areas while still competing in other areas. We find large industrial companies teaming up with software companies to create Internet-based trading networks that streamline product design, order taking and distribution. In his introductory article, David Berger referred to the proliferation of the e-words, both internal to the digital plant and its enterprise, and externally in the space of e-commerce and e-business. Berger rightly cautions e-adopters on the impact that effectively implemented ewords will have on their companies and workers as they make the cultural shift imposed by the world of e. In a lean digital plant, orders can be received directly from the customer and virtually error free. As Berger notes, this is where the pull strategy begins. This leads
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goods inventory. There is less need to hedge against production forecast errors when access to customer demand information is available directly. Accelerate the material flow at every point on the supply chain. Streamline. Eliminate costly middle players and non-value added steps, and reduce the number of hand-offs. Simplify. Reduce your number of suppliers. The result? Maximize the return on assets and increase profit margins on all manufactured products.

ADVANCED MANUFACTURING JULY 2000 61

Your newest bookmark

INFORMATION TECHNOLOGY

Online and interactive


SPECIAL REPORT

to shorter production runs as well as to greater standardization of raw materials and sub-assemblies. Finished product can be custom-manufactured to the needs of the individual making for great customer loyalty. Payment is electronic for immediate access to funds. Finally, much of the old, sluggish, bricks-and-mortar based supply chain can be simplified or eliminated in terms of supplying raw material just-in-time, distributing the product, and managing the selling process. Defining value and making value flow by eliminating waste is the key to lean manufacturing. To achieve this end, we must change the way we do business. The most effective way to make this transition is to map our manufacturing business processes and redefine them in the context of e-tools and the e-world.

E-commerce
E-commerce deals with Internet-based commercial transactions. Buying and selling opportunities over the Internet have proliferated for manufactured products. The Internet is making it possible for companies to build a brand and reach new customers in geographic markets where a bricks-and-mortar presence was once required. Trading on newly established commodity exchanges represents a real efficiency breakthrough which has eliminated costly middle players. Such capabilities are quickly transforming traditional global industries such as forestry and automobile manufacturing.

E-business
But the Internet is more than a tool for buying and selling. It is a way of providing rich, customized information about organizations and their products. For the manufacturer, it is a channel that transforms the physical fixed plant to an

CONNECTS
Our comprehensive guide to the Internet for manufacturers
WHATS INSIDE

Industry

The E-workplace
The Internet and new communications technologies have the capability to con-

But the Internet is more than just a tool for buying and selling. It is a way of providing rich, customized information about organizations and their products.
nect all workers to the heartbeat of the plant, its customers and the corporation. Most of us are familiar with the curse and the blessing of email. This informal communication vehicle has single-handedly broken through boundaries both departmentally within the plant, and geographically within the corporation and beyond. Immediate access to the dynamics of the digital plant and its systems present the opportunity to capture and reuse worker learning and knowledge. Wireless communication intimately connect each worker to the business of the plant, and also remote plants to the heartbeat of the corporation. With the installation of smart equipment with embedded sensors designed to monitor the manufacturing process and the health of equipment suppliers, manufacturers will be able to diagnose problems over the Internet and trigger repair activities before overt problems impacting product quality, run speed, or equipment breakdowns occur. agile digital plant that is directly connected to immediate global markets. Automated inventory control systems which connect the digital plant to its suppliers and customer demands, and collaborative product and equipment design systems used in concurrent engineering illustrate the online information sharing now possible between companies and their business partners. Manufacturers are able to capture and feed back customer preferences into the product design process immediately. The Internet is removing some of the scale advantages that large, established firms once enjoyed, permitting more nimble players to displace them. In the past, proprietary Electronic Data Interchange (EDI) networks which managed commercial transactions limited participation and therefore the benefits to a few large players. So also has secured Electronic Funds Transfer (EFT) shifted to more informal but equally secure payment methods. By way of example, in

Industry connects Overview Predictions Manufacturing Buying online Selling online Security & privacy Tips and training Cyber roadmap Technology Internet primer

Visit our website


www.advancedmanufacturing.com

full text articles links to dozens of key sites for manufacturers exclusive online articles research reports PowerPoint presentations

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JULY 2000 ADVANCED MANUFACTURING

the automobile industry Ford, GM and DaimlerChrysler recently launched large-scale Internet initiatives to manage all supplier interactions from product design to inventory management to order processing. With increasing velocity, we are witnessing the formation of global supply chains in traditional manufacturing industries that are being facilitated by online exchanges.

Threats to extended manufacturing


For some time we have known that insufficient capital is being spent on modernizing facilities and equipment. Going e requires additional investment and commitment. Compounding this challenge, we have learned that technology, software and systems integration are often unanticipated and very difficult. The spread of new technology and know-how is uneven across the supplier-plant-customer network. So even if we meet these challenges and opportunities within the e space, we are not assured that we can implement the much-needed seamless integration across the supply chain. In some ways, we are our own worst enemy. The impact and cultural shift required to go e are not minor factors. Old ways in manufacturing are slow to die. But the greatest roadblock to the North American manufacturing renaissance and move to the digital factory is the shortage of qualified, knowledgeable workers. Design engineers, operators, managers, and skilled shop floor workers, our new knowledge-workers, must be educated and trained for the new skills they require to run an extended manufacturing plant effectively.

Factors critical to e success


A solid vision, a clear business strategy, and robust streamlined business processes must be in place before venturing into the e-world. A clear understanding of the interlocking nature of manufacturing business processes is mandatory. For example, the delicate balance between production capacity, supply and demand must be maintained at all costs. Brilliant sales and marketing initiatives have the potential to create chaos and implode any lean manufacturer if customer demand cannot be met in the global Internet-enabled market. Clearly, our ability to navigate through the increasing velocity of breakthrough changes in the e-space is key to our survival.
ADVANCED MANUFACTURING JULY 2000 63

INFORMATION TECHNOLOGY

Whats next?
The world of e and the Internet will continue to change the face and pace of business. The Internet offers unprecedented opportunities for manufacturers to expand geographic reach and enter new markets. It can also deliver huge savings through efficiency gains in inventory reduction, shorter cycle times, and less manual administration all of which support the principles of lean manufacturing. But e-commerce involves an entirely new way of doing business that is yet not fully understood, defined or proven. Compounding this risk, a high up-front investment in ebusiness may be required to gain the benefits of lower prices and larger market share. In spite of these uncertainties and costs, senior executives in manufacturing must consider the potentially higher cost of not doing e-business. Werner Knittel, Vice President, B.C. Division, Alliance of Manufacturers & Exporters Canada commented at the recent B.C. Manufacturers Club that e-business has become a reality for management teams of many of our leading manufacturing and exporting firms. For the rest it is quickly becoming the single biggest challenge facing the executive suite of today. No other issue seems to be rising to the top of the priority list as fast as how a firm will respond to the e-business challenge. The introduction of the Internet has produced a low cost channel for business-to-consumer and business-to-business information sharing, e-commerce, delivery of services, and trading. Our best manufacturers are not standing still. They are justifying the capital to develop high tech digital plants both internally and externally, no matter what product they produce. They are constantly increasing their agility by venturing into the e-space, partnering collaboratively, leveraging technology, implementing systems, and employing the best talent available. Skilled shop floor teams, now becoming knowledgeworkers, are the people who will make the extended manufacturing plants As M excel. s Gail Petersen is the maintenance practice leader in the manufacturing and distribution consulting group of Grant Thornton LLP, chartered accountants, management consultants. You can reach her at (416) 360-5025 and by email at gpetersen@grantthornton.ca.
64 JULY 2000 ADVANCED MANUFACTURING

SOFTWARE REPORT

MES muscles shop floor data up the food chain


Camstars InSite fills the plant gap between shop floor data and company-wide IT systems
BY TODD PHILLIPS
IN BRIEF
InSite for Windows Vendor: Camstar Systems, Inc. Main purpose: Manufacturing Execution Systems (MES) software Contact: (800) 237-2841 Website: www.camstar.com

or many industrial managers, information systems on the shop floor have been less about improving the manufacturing process, and more about collecting data for the bean counters at head office. But with increased pressure to shrink product development time and to increase throughput, quality and efficiency, information technology tools that can capture that information and actually help improve the manufacturing process are warmly received by manufacturers. Manufacturers are particularly skeptical of some of the as-yet-unfulfilled promises of Enterprise Resource Planning (ERP) systems for planning resources. These planning systems can help allocate resources, but dont help execute manufacturing floor operations. Thats where Manufacturing Execution Systems (MES) software comes in, as we explained in our January 2000

ERP/Supply chain

InSite Plant 1

InSite Plant 1

InSite Plant 1

Factory floor data sources


InSite gathers shop-floor data from multiple plants and moves it up the information chain.

issue. (MES gathers shop floor data in real time.) You can track down that article by Scott Bury by visiting our website at (www.advancedmanufacturing.com) and clicking on the archives link. MES software provides the critical link to fill the information gap between the ERP business systems and manufacturing operations. One such MES system uses what the vendor, Camstar Systems, Inc. describes as In-Process Intelligence to build in critical business and process logic to make the operation run smoother, faster, and with better decisions on resource (people, equipment, materials) utilization. Camstar has two main product lines, its AS/400-based MESA and Windows NT-based InSite. Built from the ground up as a native Windows NT application, InSite is designed for manufacturing enterprises

and system suppliers and integrators responsible for delivering production management and factory automation. The company says its MES software delivers key manufacturing floor control, enabling managers and users to: s achieve a plant-wide view of the entire manufacturing environment through tracking and control of all orders, materials, operators, processes and equipment; s implement consistent manufacturing procedures and documentation; s collect and analyze quality and yield data for continuous process improvement; s capture and store production history and tracking records to meet government or customer requirements; s collect cost data which reflects the true activity-based costs of production; s achieve integration and information exchange between the planning (ERP) and cell control

ABOVE: InSites workflow modeller provides a point-and-click interface for quickly modelling complex manufacturing processes.
ADVANCED MANUFACTURING JULY 2000 65

www.advancedmanufacturing.com

SOFTWARE REPORT

(machine) level systems. InSite can integrate information that might currently exist in paper form only, or in multiple, disconnected systems on the floor. The user-defined factory information model is the single source that describes material tracking, specifications, resource (machine) control, quality data, and scheduling data. The software uses the collected data described in your workflow model to actually control what happens. Based on data collected, InSite can warn operators or prevent processing if product quality is off-spec. InSite can be used as a common plant level software across multiple plants in the enterprise, yet can be tailored for each plant. Built on standard Microsoft technologies, InSite gives users an objectoriented MES component architecture that integrates with other factory systems (HMI,

automation, and controls), and is upgradable. The software allows users to model the way their factory works, accounting for exception or non-standard workflows and managing all data-product, process, or resources related-generated by the manufacturing process. The software can help users: s model complex workflows within their factory; s alternate routes and paths for product based on plant conditions; s automatically rework routing and quality dispositions; s do product grading/binning; s alternate processing of product based on parametric/ test data conditions; s allow for user-configured logic for special handling; s conduct a set of transactions for recording and modelling actual product flow. Some other features of the InSite software include:

s the ability to track multiple levels in a process (e.g., units within lots, lots within work orders, batches within packages, coils or rolls within orders) simultaneously-as well as multiple unit-of- measures (e.g., cases and weight, linear feet and weight); s handing of discrete, batch, or continuous flow movement of product in the process; s collecting quality or parametric data at any point in the process, including quality, parametric, and machine data; s providing product-centric or resource-centric views of production, including results by unit, batch, or work order; s allowing for revision control for all critical manufacturing resources, including products, routings, specifications, instructions, data collection, machines, or any plant resource. Camstar has also developed industry-specific produc-

tion extensions for: semi-conductor / electronics: fabrication, assembly, disk media, fibre optics, fabless, components, optics; s consumer packaged goods: meat, bottling, food processing; s rolled products: metals, paper, textiles, film; s process industry: chemicals, pharmaceuticals; s discrete manufacturing: electronics parts assembly. As we were going to press, Camstar was about to release its InSite Version 2.0 that supports the administration and control of all execution functionality from a centralized location. The company says this capability for single-point administration and control provides larger-scale, multiplant manufacturers a better method to coordinated management of their distributed As M operating environments. s
s

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JULY 2000 ADVANCED MANUFACTURING

July, 2000
Do you want to know more about any product advertised in this issue of Advanced Manufacturing? Here, youll find all the information you need to make the right connections! Every advertiser is listed, along with several ways that you can get in touch. Whether

FORYOURINFORMATION
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ADVANCED MANUFACTURING JULY 2000 67

PARTING SHOT

E everything wont speed lean journey


Obsessing over info tech could derail your lean initiatives
BY DR. THOMAS JACKSON
Dr. Thomas Jackson is the president and CEO of Productivity Inc. a Portland, Oregon-based training and publishing firm that focuses on teaching and training in lean manufacturing.

-business! There they go again. Another inappropriate technical fix swooped on by gee-whiz executives enthralled by information age hype. I suppose that if the CEOs of this world had good data, information technology might be worth the billions they spend on it. The sad fact is that they dont have good data and are wasting their money. To conduct a scientific investigation, the careful scientist establishes a controlled environment so that experiments may be repeated and observations, i.e., the data may be verified independently. Most businesses, however, rarely do the same procedure in the same sequence and under the same environmental conditions twice. Most companies don t have what Toyota and other lean enterprises call standardized work. Thats the DNA of lean enterprise, because it permits every single person in a lean system to conduct ongoing experimentation with and systematic improvement of the high standards that characterize the unbeatable combination of high quality and low cost. Production in most companies is one grand, uncontrolled experiment. Because their experiments are uncontrolled, business executives have no way of obtaining reliable information to analyze the root causes of performance variances. Technology cannot help these poor souls. Technology cannot compensate for sloppy conditions in the lab. No standardized work, no controlled environment. No controlled environment, no good data. Managerial reports generated by ERP systems full of bad data are nothing more than worthless abstractions. Garbage in, garbage out. This will be true regardless of the frequency or complexity of data-crunching or re-formatting. Likewise, high-speed communications technology such as the Internet can only propel pseudo-scientists all the more quickly to wrong conclusions. As my mother would say, theyre going (with their data-garbage) to hell in a hand basket. Why do business leaders suffer from this obsession with information technology? Why dont economists tell them about standardized work, learning organizations, and the lean enterprise? Is it North Americas chronic shortage of labour and irrational love of labour saving machines? Cult worship of
JULY 2000 ADVANCED MANUFACTURING

Newtonian genius? Slavish imitation of the e-rich and famous? Such questions will become fodder for future business school PhDs. In the meantime, our executives, their techno-consultants, and their stock analysts persist in their fervent promotion of the latest, bogus findings about cold fusion, er, e-business. Is there hope? Im reminded of little Dorothy, wandering through Oz, chased by witches and flying monkeys, when all along she had those ruby slippers. There is a strange parallel here. The fact is that the lean enterprise itself contains the key to the information age. Things digital, including ERP and e-business, merely enable a more complete application of true, proper,

lean information-age principles: a culture of organization learning based on respect for the intelligence and responsibility of every employee; intensive training in fast identification methods of root-cause analysis and permanent solution of critical problems; an environment conducive to organizational learning based on a crusade against the primary sources of variability, i.e., non-value-adding wastes; fast feedback and feed forward systems that provide all employees with the right waste-busting information at the right time and in the right form. The real key to the information age is to cultivate these principles company-wide. Become a lean, learning organization. Empower your people to do primary research. Encourage them to share results. Constantly improve your standards. When youve set your own company on fire, spread the revolution with Napoleonic fervor to your customers and your suppliers. The information age will belong to those who complete the arduous journey from mass production to lean enterprise. Stop As M dreaming, Dorothy, and get to work. s

ILLUSTRATION BY JASON SCHNEIDER

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