Category Archives: Manufacturing

Manufacturing Insights From Motorola

Last week, Manufacturing Insights hosted a Webinar called Supply Chain Innovation with Perspective from Motorola that caught my attention. Since this blog revolves around innovation, and since Motorola has historically been pretty innovative, especially for a company of their size (and one of the first companies to aggressively pursue decision optimization, which helped them win the Edelman Award), I was intrigued.

The focus of the seminar was to announce some of the preliminary results of Manufacturing Insights’ recent global supply chain survey (which should be available to members by now) of 823 manufacturers, retailers, and wholesalers across Europe, Asia Pacific (which includes China), and North America to identify motivation and IT investment in supply chain and relate it to the corporation’s overall business strategy.

Surprisingly, despite the fact that there’s never been a better time to be innovative with all of the great new technologies and strategies available to you, the survey uncovered that there was not much focus on innovation at all, with the majority of respondents focussed on reducing costs. Although this suggests that the supply chain is still not very strategic, the reasoning offered for this reality was that many of these companies rely on financing and regular access to capital, which is determined by their valuation, which is determined by Wall Street, which bases their valuation on numbers based on how well they control cost. So cost is king. And then there’s the added pressure of rising material costs across the board, which makes cost a double whammy in the forefront of one’s mind.

However, I would argue that this is precisely the reason you have to stop focussing on cost and start focussing on supply chain optimization, including award optimization, supply network optimization, inventory optimization, investment optimization, financing optimization, and working capital optimization. (The former three are good examples of sourcing decision optimization problems and the latter three are good examples of supply chain finance optimization.) But I digress.

The webinar also included an overview of Motorola’s current strategic plan for their supply chain and an overview of their progress to date which includes a 40% reduction in their manufacturing and logistics operation footprint, a 2X reduction in parts-per-million (PPM) defects, and consolidation of 91% of their top 150 suppliers. These are impressive goals for a company the size of Motorola only two years into a massive project to consolidate their four separate supply chains into one single supply chain.

Motorola is accomplishing this goal through strategic investments in critical IT systems that will give everyone on their team the ability to get the information they need when they need it. More specifically, 90% of their IT spend is targeted towards leveraged systems and visibility tools for business planning. This provides a solid foundation for good supply chain management.

For those looking to copy Motorola’s success, they are attributing part of that success to defining their top priorities and maintaining a sharp focus on those priorities. For Motorola, the top 6 priorities are:

  • Execution Excellence
    Meet commitments and numbers. Accomplish this by way of improved IT infrastructure and information visibility.
  • Deep Supplier Relationships
    Leverage the whole of Motorola in fact-based negotiations. Use supplier scorecards and cost management systems.
  • Manufacturing and Logistics Optimization
    Optimize the footprint, product flow, and lean best practice implementation across all sites. Integrate with partners and use advanced planning systems.
  • Quality Renewal
    Go back to the basics and ensure consistent deployment across all business units. Ensure product traceability and capture early returns indicators.
  • Common Leveraged IT Solutions
    Invest in common systems, drive efficiencies, and maximize the value of IT spend. Enhance software development processes and portfolio management.
  • Organization Efficiency
    Optimize the support structure and develop a (metric-based) culture to further growth and performance. Create a culture of doers, not talkers, and drive commonality and reuse worldwide.

In addition, Motorola is increasing their focus on market-based segmentation within the single supply chain, process simplification, and supplier collaboration. What’s great about this is that there’s nothing you haven’t heard about before as most of this is what leading bloggers, analysts, and vendors have been preaching for a few years now. This means that they key to success is to develop a good strategic plan, adopt the technology that is now available, and just do it. Couldn’t be simpler, right?

 

Informance: Manufacturing Performance Management in Disguise

Last week I re-introduced you to Aravo, a hidden gem in the supply chain space with their mastery of Supplier Information Management (SIM) that goes so far above and beyond what you get with traditional packaged e-Sourcing suites that even Oracle, one of the few companies that not only eats its own dog food and drinks its own champagne but also tries fervently to have it for every meal, and Google, one of the few powerhouse research labs left in existence thanks to the short-sighted venture craze and short-term return strategies of the last decade that saw the likes of some of the greatest labs (like Xerox Park, Bell Labs, etc) more-or-less disappear from existence, have decided to adopt the solution.

This week I’m going to introduce you to another hidden gem in the supply chain space that you might not notice otherwise – and it goes by the name of Informance (acquired by Epicor). Although I did introduce them to you back in this post in January, I doubt you took much notice as I didn’t go too much beyond the press release and web-site in my introduction as I was still struggling to understand where the true value of their solution lies.

However, thanks to a concerted effort by their new Chief Marketing Officer, the infamous Sudy Bharadwaj (who temporarily replaced Tim “Mr. Perfect” Minahan at Aberdeen before the arrival of Vance Checketts after market-making stints at MindFlow and i2), their messaging (and website) has been considerably cleaned up and clarified and their knowledge center has exploded. (Their recent series of benchmark studies, reminiscent of Sudy’s record-breaking research performance at Aberdeen of 5 studies in 7 months, is particularly enlightening as to the importance of the type of solution they offer.) After reviewing the cleaned up messaging, the new materials, and a few discussions with Sudy, I’ve finally figured out what Informance really does and how it goes beyond traditional manufacturing solutions to allow centralized operations and contract manufacturing customers to improve their distributed and outsourced manufacturing processes.

In a nutshell, even though they are currently advertising their solution as Enterprise Manufacturing Intelligence (EMI, not to be confused with the EMI Group), what they are really doing is Manufacturing Performance Management (MPM) – which could be explained as next generation Supplier Performance Management (SPM). In Supplier Performance Management (as promoted by Ariba (acquired by SAP), Emptoris (acquired by IBM and sunset in 2017), and Ketera (acquired by Deem), among others), you collect, analyze, and disseminate relevant supplier performance metrics to determine where your suppliers are performing well and where they are performing poorly. You then use this information to optimize your supply base, identify your strategic suppliers, and collaborate with them to root out identified performance issues and develop processes for improvement.

Manufacturing Performance Management (MPM) takes supplier performance management to the next level by not only identifying where performance is lacking (relative to best-in-class) at the plant level but also by providing actionable information upon which you can base performance improvements. By tapping into bi-directional information flows, what-if scenario analytic capabilities, six sigma, lean, and TPM knowledge bases, and heuristic improvement strategies, the system can not only tell you that production is down, but it can pinpoint the specific manufacturing line within the specific manufacturing plant that is not producing its fair share of units, determine the reason for the decreased production (breakdown, lack-of-inventory shutdown, labor shortage, etc), and provide you with a solution to fix the problem (increase safety stock, redesign your transportation network to prevent delays, increase staff levels, etc).

The importance of being able to go beyond identifying a problem to identifying one or more potential solutions in your manufacturing and contract manufacturing operations cannot be over-stressed. Just one of the benchmark studies I referenced above serves to highlight the drastic performance gaps between laggards and best-in-class performers. The Food and Beverage benchmark study found that best-in-class performers have 6,800% fewer process failures (0.25% vs 17%), 828% fewer equipment failures (1.69% vs 14%), and 33,333% fewer shutdowns (0.03% vs 10%). In addition, best-in-class have 10,909% fewer changeovers (0.11% vs 12%), 1,145% less operational downtime (0.96% vs 11%), and over 60,000% fewer production adjustments (0.01%, rounded up, vs 6%).

In addition to the bi-directional information flows, what-if scenario analysis, and actionable insight, Informance also offers real-time performance monitoring, proactive before-the-fact notifications, and multi-level dashboard monitoring that starts at the plant floor manager and goes all the way up to the COO. This is not to downplay their plant solution, which I’d still consider labelling EMI (Enterprise Manufacturing Intelligence), since contract manufacturers can also proactively use this solution to improve their operations and become supplier of choice to their customers, but merely to note the extent to which their enterprise solution goes beyond traditional EMI into the beginnings of true MPM. So be sure to check them out, and their expanding knowledge center in particular.