Ten years ago, the idea of integrated manufacturing was great. . . a way for companies to flexibly manufacture products at least cost. Using technology to become more competitive seemed promising, and achievable. To some it appeared to be a defensive strategy to counter stiff offshore competition that was taking it's toll on U.S. market share. To others it was a way to respond quickly to the market using slimmer, leaner and more effective resources.

Companies struggling to survive were turning to computer integrated manufacturing (CIM) out of desperation in their efforts to find a better way to manufacture. Over time, the original definition of computer integrated manufacturing was lost as CIM became an acronym for the automated factory. Manufacturers concocted the vision of a completely automated facility where parts were produced with little or no human intervention.

Billions were invested in programmable logic controllers and CNC's for the factory floor, workstations for engineering, personal computers for the office, flexible machining systems, optimizing software, MRP, robots and automated conveyance, etc., all with this vision in mind. Very few knew the real costs involved in a company-wide integration and networking of computers, and the impact it would have on operating profit.

Manufacturers knew it was going to be expensive, but they rationalized the investment in a convoluted sort of way.

• When hard numbers weren't supportive of a good return on investment, the argument was used that the investment can't be justified using short term ROI: it's too myopic.

• When there was difficulty defining the CIM vision in practical terms, and how to get there, the response was that CIM was a journey, and not a destination.

• When asked about direct profit contribution the response was that emphasis was on control: of data, of information, and consequently the business.

What wasn't considered was if it takes so much effort to control the process might there be something inherently wrong in the process itself?

Today, predictions of a doubling of automation expenditures in man- ufacturing haven't materialized. After an initial spending spree, companies are avoiding heavy investments in automation and retrenching to make their technological indulgences work. Although few are willing to openly admit it, savings predicted on CIM aren't surfacing, and it's not surprising.

After all:

• Efforts to automate factories and offices began before fundamental problems were identified and solved.

• Automation was implemented to displace direct labor, which addresses a small percentage of total product cost.

• Islands of technology were implemented with little regard to a master plan and how it would fit together.

The results were predictable. Today, pockets of CIM, FMS's, and cells are grossly underutilized because they were implemented incorrectly or for the wrong reasons.

In a recent survey of manufacturing executives, it was revealed that a surprising number of systems were implemented with no links to operating profits. Most of the benefits that resulted centered around control. Respondents reported a 30% overall systems implementation failure rate, a documented testimonial to the difficulty of implementing manufacturing support systems.

With no guarantee of success, one must wonder why the concentration of efforts has been on the integration of computers in the first place?

Nothing is wrong with integrated manufacturing. It's the implementation that has failed. Automation cannot effectively compensate for decades of problems on the factory floor caused by haphazard growth. It's treating symptoms instead of causes.

Companies manage themselves using old manual techniques, while automated systems are pouring out data in massive volumes. The emphasis on the computer must be refocused and changed to areas that will dramatically affect market share and operating profit. The focus has to be on integrating the business. Here are six areas to start with:

People

To stay competitive in the next decade, companies will need to be in a constant state of refinement and change. Change does not successfully occur if the people who are to be affected by change are not involved in defining it. People are the organization, and integrating change throughout the organization requires involving, training, and educating them.

Product and Market

Having a product with lots of bells and whistles means nothing if the market doesn't want it.

Information

To support the fast movement of physical parts, velocity is required throughout the business. Natural points of delay must be eliminated.

Organization

Most current organizational structures are stifling. Natural and functional conflicts create internal adversarial relationships which prevent the sharing of information and ideas. Organizations should foster velocity, and innovation, both on the shop floor, and in the office. To make this happen, refocus the emphasis on tasks to be performed.

Supply

Close physical and relational distances between supply and point-of-use.

Putting It All Together

Instead of placing faith in intangible and questionable bene- fits from investment in integrating computers, go directly for the bottom line...integrate the business . It's time to get tangible results for our efforts; it's time to get agile for the next decade; it's time for a radical change.

(Please see our Computer Integrated Manufacturing Success Story (Click Here)

Author

Richard G. Ligus is President of Rockford Consulting Group, Ltd., located in Rockford, IL., with over 30 years experience in manufacturing, procurement, transportation and distribution. He specializes in developing and implementing manufacturing, distribution, and supply chain strategies. Rich is an author and a speaker, and has developed seminars with the American Management Association. He is certified by both the Institute of Management Consultants and the The National Bureau of Certified Consultants.