The Many Layers of Quality Management

If we learned anything from yesterday’s AFC championship game, it’s that a winning strategy in sports—and business—requires a quality support structure.   

 

It was a real doozy of an AFC championship game yesterday. Who wasn’t stunned when kicker Billy Cundiff’s 32-yard field goal attempt hooked to the left, sending the Baltimore Ravens heading for home and pointing the New England Patriots toward Lucas Oil Stadium and the Super Bowl in Indianapolis?

One mistake cost Baltimore a chance at the Super Bowl title. Or did it? Consider Patriots quarterback Tom Brady’s post-game assessment: “I sucked today.”  Those are hard-hitting words from a man known for his leadership and skillful execution on the field. Like Cundiff, he had an off game. But Brady had excellent back-up. The reason the Patriots won, according to Brady, was because of its quality defensive line.

Lesson learned: A winning strategy requires many layers of quality management.

With competition in the manufacturing industry as fierce as it was in Gillette Stadium last night, companies must beef up their business strategies with new lines of defense that include teamwork, training, and technology. Call it total quality management (TQM)—a philosophy under which all members of an organization participate in improving processes, products, services, and culture—with the help of new technology.

To that end, enterprise software vendors have been busy embedding quality management capabilities into their applications, integrating quality management across supply chain and production management programs, and creating hubs of organized data that the team can see, learn from, and execute on.

ERP supplier Infor, for example, recently acquired a quality management application from RSVP Business Systems that, integrated with the Infor10 ERP Business System, will add the ability to track workflow and change management from the production line to the shipped product.

DISCUS Software introduced a Web-based interface to its quality management software that it said facilitates the sharing of technical data across the supply chain and eases integration with enterprise software. Similarly, MES provider Apriso unveiled its Global Trace and Genealogy app that collects data from multiple sources and pools it into a centralized hub, while applying manufacturing intelligence for root-cause analysis.

The emphasis, in these cases and others like them, is on arming the team with new information—a new playbook, so to speak, that includes multiple layers of strength and skill to ensure a solid operational offense, and, when needed, some quality back-up.

Which team will be better prepared to take the Super Bowl title this year?

 

 

 

 

 

 

 

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Congress and Your Accounting Department

Volatility on Capitol Hill isn’t just pageantry on the nightly news; it has real effects on your company’s accounting department and its choice of software.

 

Like most Americans, I’m trying to forget the mud-wrestling we saw on Capitol Hill in 2011. Every few weeks, it seems, America’s future hung in the balance, and across the political spectrum a cast of characters seemed intent not on solutions but on brinksmanship. Volatility and uncertainty ruled.

Were these political machinations confined to the nightly news, we might have found amusement in this theater of the absurd. But they spilled into our lives in a myriad of ways. During one partisan brouhaha, for instance, Congress played chicken with the payroll tax, extending the drama right to the doorstep of Christmas. The escalation had corporate payroll department managers on edge. Accounting for the lapsed tax credit—would have been no simple feat. Financial accounting is a complex process, and ensuring that adjustments cascade properly through a corporation demands time, patience, and extra resources. Not the kind of project that the employees in payroll want to undertake on Christmas Eve.

Thankfully, the financial department dodged that bullet. But who among us expects peace in Congress this election year? Better to brace for volatility. And for your accounting department, that means flexible financial software. You should ask yourself whether your payroll team would have been able to adjust your accounting system had the payroll tax expired last month? Are they prepared to impose new tax treatments on repatriated corporate profits, or capital gains?

These items could change as Congress and the President take steps to shore up the country’s financial infrastructure. Is your own financial technology infrastructure ready for this kind of volatility?

Now’s a good time to ask. Congress is back in session tomorrow.

 

[TechMATCH Pro provides information about various financial software packages for interested software buyers.]

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Enterprise Software Applications Find a Home on Mobile Devices in 2012

This year, as enterprise applications are ported to smartphones and iPads, executives are finally viewing mobility as a strategic advantage, and are encouraging IT departments to support the mobile workforce.

 

Smartphones have been hanging from the hip holsters of corporate executives for more than a decade, and have served as important personal productivity tools. But in recent years, with more employees brandishing iPhones or Android-based devices, IT departments have pushed back against the workplace “bring your own device” (BYOD) phenomenon.  IT managers fear they won’t be able to manage a multitude of devices and protect against corporate security breaches that could result from viruses or from phones that fall into the wrong hands.  

That’s all about to change, predicts Tony Rizzo, editor-in-chief of Mobile Enterprise magazine. In a recent article, Rizzo says mobility will become a key enterprise technology in 2012. Companies are embracing the idea that mobility is strategic to their global organizations, he said, and will begin to treat BYOD as an opportunity, rather than a threat.

This change has been spurred in large part by the fact that many enterprise applications now allow for mobile access.

From customer relationship management, to business intelligence, to PLM and EAM, software suppliers recognize the power of delivering their applications to everyday users—whether they are in the field, in the warehouse, or in the corner office.

The iPad, with its large screen, wireless connection, and ample storage, has sparked innovation among software developers. The resulting mobile applications, together with enterprise mobility platforms from Sybase and others, are on the shopping lists of CIOs who no longer view mobility as something “new and different” in the office. It is now part of the information architecture.

As this trend grows, iPhone and iPad developers find themselves in great demand. Jobs Tractor, a web service that searches Twitter for software developer jobs, found that the Objective-C programming language (used to develop iPhone and iPad apps) was the third-most requested skill during the last two months of 2011, behind Java and PHP.

What about you: Is your company looking for developers who can write applications for smartphones and other mobile devices?

 

 

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The Supply Chain in 2012: Hope in Co-opetition

Manufacturers and other supply chain constituents will face plenty of challenges in 2012. How will they react to the disasters of 2011, and what does their take on co-opetition say about their outlook for the year ahead?

 

It’s been too long since we put a year to bed and thought, “Now that’s one I’d like to live again.” Here’s hoping that 2012 is that kind of year.

Here in the New Year, I’ve decided to look back on some of my past supply-chain predictions. Late in 2010, I jotted down some thoughts on supply chain management, including three areas that I thought would be primary concerns for manufacturers in 2011. That list included prices in China, the cost of oil, and the availability of rare earth metals. China’s currency did appreciate in 2011, and that, coupled with upward pressure on wages, changed the supply chain equation for many global companies.

Oil prices rose during 2011, from $91.40 on the final trading day of 2010 to $98.80 at the end of last week. But the resurgent economy that I thought would propel prices even higher turned out to be farther in the distance than most of us had hoped. Ditto for rare-earth metals: that ordeal may have been postponed by a sluggish world economy, which tempered demand in 2011 and restrained prices.

So, which supply chain management concerns will top the list for manufacturers and shippers in 2012? This year I’ll defer to some intriguing predictions by other supply chain-watchers—including Bob Ferrari, who blogs at Supply Chain Matters, and Adrian Gonzalez at Logistics Viewpoints. Ferrari says that the B2C, pharmaceutical, and high tech sectors will be “especially affected” by turmoil in 2012, and that supply chain software vendors will increasingly partner with ERP software providers this year. Gonzalez expects social media tools to play a greater role in supply chain affairs, and predicts that third-party logistics providers (3PLs) will more actively engage with their customers this year. Both cite the challenge of dealing with unanticipated events, and both anticipate increased use of cloud computing in supply chain operations.

I’ll keep an eye on all of those trends. In particular, I’m keen to see how manufacturers react to the punishing disasters of 2011. Will they boost insurance coverage? Spread their inventory across more locations to mitigate their risk profiles? Diversify their supplier bases? Invest in supplier relationship management software and risk management technology?

I’m also intrigued by the role co-opetition will play in supply chain management in 2012. Jason Busch, writing on his Spend Matters blog, got me thinking in this direction. Busch relayed some insights from a conversation with Steve Gold of consultancy Alvarez & Marsal. A&M conducts an annual survey of 3PLs and the manufacturers and other shippers that contract to use their services. According to Busch, Gold cited two “very large” food/CPG companies that are “co-mingling and aggregating spend for truckload procurement in North America. “Together,” Busch wrote, “these companies represent a large enough spend and overlapping transportation lanes that their volume has a material impact on carrier pricing.”

That scenario underscores the supply chain power that comes from co-opetition. I dug a bit deeper to try to understand what role cross-aisle collaboration might play in 2012, and what that might reveal about business prospects in the months ahead. According to the “2012 Third-Party Logistics Study,” led by Capgemini, co-opetition doesn’t hold the appeal it did in 2011. As 2011 approached, 68% of shippers told Capgemini that they were interested in “collaborating with other companies, even competitors, to achieve logistics cost and service improvements.” As 2012 neared, just 44% expressed the same interest.

 

Supply chain co-opetition is often a byproduct of desperate times. In my estimation, a waning interest in co-opetition reflects a pent-up optimism percolating in the new grass of 2012. The proprietors of the supply chain seem to be telling us that this may just be a year that we want to relive when it’s done.

 

How does 2012 look for you?

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What Are You Gonna Do When Big Data Comes for You?

Overwhelmed by data sets that drown out insight, some business users feel like they’re down for the count. But hold on; 2012 might be the year when they get a shot at fighting back.

 

With apologies to Hulk Hogan, it’s a legitimate question. Most companies want to be enlightened by their data; instead, they’re besieged by it.

Part of the problem is that too many companies view big data as a storage issue, i.e., something for the IT department to handle. The IT manager thinks, “My servers are filling up quickly, even though I’ve used virtualization techniques to get more from existing hardware. Now I face the dilemma of buying more servers or renting space in the cloud.” Important considerations, but beside the point for the business user. After all, business users aren’t trying to cram more sweaters into the attic; they’re trying to find something to wear.

The good news is that 2012 might be a turning point for the scourge of big data, with an assist from business intelligence technology. Business intelligence means a lot of things to a lot of people. It was once the exclusive province of data analysis specialists, the pioneering BI vendors who had as many Ph.D.s on staff as they did coders. Now BI has grown up and gone mainstream. Vendors from every corner of the enterprise software market offer BI capabilities in their products, whether that’s supplier relationship management software or manufacturing intelligence or even CRM systems with built-in social analytics and dashboards. And more will do the same in 2012. Couple that with advances in in-memory technology, which serves up business insight at the speed of, well, business, and the tables are really starting to turn.

If you want some hope for your battle with big data in 2012, picture Hulk Hogan, prone on the canvas, the referee dropping his hand to test for signs of life. The arm thuds against the mat once, then twice. On the third test the arm comes alive, muscles tensed, vitality coursing through the veins. What are you gonna do, big data…

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Lean Manufacturing: Not Worth Its Weight?

A new study reveals some significant shortcomings in Lean manufacturing and other operational excellence practices, begging the question of whether Lean still works for manufacturing.

Is Lean manufacturing bankrupt?

In some circles, that question stirs a reaction similar to dropping a bank CEO into an Occupy Wall Street demonstration. Proponents of Lean manufacturing and related principles of operational excellence such as Six Sigma are often strident in their belief that the practices deliver significant business advantages. Some take on the sheen of religious fanatics when they promulgate Lean.

What if they’re wrong?

Yes, I’m poking a sacred cow. But you can’t always tell a sacred cow from a sick one unless you look closely. The business process consultants at AlixPartners recently did just that. They turned an empirical eye to the world of operational excellence and Lean manufacturing, polling senior executives on the effectiveness of such efforts. The opening statement of the resulting study might read like blasphemy to some:

Despite significant investments in “lean manufacturing,” “Six Sigma,” and other productivity programs, most large manufacturers failed to reach—or even come close to—their cost savings targets over the last 12 months.

Consider some of the study’s findings. Among the manufacturers AlixPartners surveyed, 47% had hoped to achieve savings in excess of 5% of their manufacturing costs by implementing Lean manufacturing and operational excellence practices. Only 31% actually achieved that mark. Thirty-six percent realized 3%-4% savings, while 19% reduced costs by 2% or less. Fourteen percent couldn’t quantify their results.

Not a rousing endorsement. “Still,” reads the AlixPartners’ report, “despite these poor or unknown returns on investment, more than 90% of executives surveyed considered their programs to be somewhat or very effective, indicating a substantial perception gap in this area.”

For companies in which the operational excellence program did not deliver the expected benefits, 23% of respondents said the culprit was an “inaccurate opportunity analysis.” Which makes me wonder if the original opportunity analyses were swayed by dogma. That is, have the backers of Lean manufacturing and operational excellence so colored our views that we can no longer tell a sacred cow from a sick one?

Apologists will say that the manufacturers who found little benefit in Lean manufacturing came up short not because the philosophy is flawed, but because their execution was. But if failure is such a common result of Lean manufacturing efforts, maybe there’s something wrong with the system. If it works swimmingly on a diagramed process flow but fails in real factories, maybe Lean manufacturing methods aren’t suited to real-world manufacturing. Maybe it’s a bridge too far to expect the principles honed in one industry to apply to all others. Maybe today’s manufacturing reality is too volatile, too fast, for Lean manufacturing to keep up.

What do you think?

(See the Canadian Business Journal for a good analysis of the AlixPartners’ findings.)

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A Manufacturing Democracy

Using crowdsourcing and micro-factories, new community-oriented manufacturers are building innovative products of the people, by the people, for the people.

Not too long ago, Web 2.0 technology was largely ignored by manufacturers. They viewed social media tools as a passing fad that had no place in the enterprise. Executives couldn’t easily govern its use, and company secrets might slip out by way of a loose-lipped employee. Just a few years ago, however, we started to see signs that social media actually offered value—facilitating new ways of communicating and collaborating in real-time. Large companies, among them General Mills, were using wikis, blogs, even Facebook.

Now the social media tsunami has swept through sales, marketing, and customer service departments, with specific communities formed to facilitate outreach or gather feedback. In parallel, new product innovation emerged in the form of crowdsourcing. IBM’s InnovationJam,  Dell’s IdeaStorm, and Starbucks’ My Starbucks Idea are all great examples of how companies can tap into the collective intelligence of their customers.

Now the question is: Can social media transform the factory floor? Other innovative technologies already have: witness the digital manufacturing model that uses web services and collaboration technology to connect product design to the assembly line. But that model builds on the old paradigm of capital-intensive manufacturing and mass customization.

A truly transformational opportunity involves using social media to reconstitute the way we build and distribute products. One car maker, called Local Motors, has done just that. Using crowdsourcing and micro-factories, Local Motors lets its customers vote on product designs proposed in the development community. Concepts with the most votes are further developed through online collaboration with peers and the Local Motors team to choose the car’s body, engine, shocks, etc. Once the car is fully designed, the customer can buy it and build it. Local Motors opens a micro-factory in your area where you and the Local Motors team assemble your custom car over two three-day weekends.

Local Motors’ first open-source production vehicle is the Rally Fighter, a $50,000 off-road (street legal) racer that rolled off the micro-production line last year. More designs are in the works. For example, Local Motors’ Open Electric Vehicle project is now underway.  The co-create community is designing a reusable open source chassis that can be included in future electric vehicle production.  And, according to Siemens PLM Software, Local Motors is recommending designers use the company’s 3D CAD Solid Edge software with synchronous technology in the Open Electric Vehicle effort. In addition, the Defense Advanced Research Projects Agency (DARPA), together with Dassault Systemes and Local Motors, just delivered the first co-created military vehicle. And if you want to watch the birth of your own car, it’s as easy as joining a community.

Through the use of Web 2.0 technology, Local Motors is transforming the way we manufacture. This is the type of out-of-the-box thinking that could help save manufacturing in America. At the very least, it is sure to usher in a generation of social media thinkers who will bring new life to the factory floor.

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Manufacturers and Connected Products: A Dangerous Combo

Manufacturers with no history of cybersecurity prowess are now launching products that connect to the Internet and the cloud. It’s time to define this new category of manufacturing, because it will soon cover a good portion of the industry.

 

Whether they like it or not, many manufacturers are now in the business of cybersecurity. Increasingly, their products are identified not just by serial numbers but by IP addresses. And as any home computer user knows, anything with an IP address must be secured, lest the cyber-prowlers break in. The world of cloud computing is a scary place, rife with dark alleys and unsavory actors. It’s a new world for most of these manufacturers, and it raises the stakes on their liability.

Sure, some of the nameplate brands in this new world of cloud-connected products have experience with cybersecurity: BlackBerry, Dell, Apple, to name just a few. These companies have the knowledge and infrastructure to support security efforts for connected products, since protection of digital information is in their DNA. (That doesn’t necessarily mean they’re good at it—see articles here and here—it just means they have a head start and need not fund entirely new security operations within their organizations.)

Other manufacturers with no cloud computing experience must now wade through a morass of cybersecurity and product protection concerns. Needless to say, this is not their core competency.

Take Sony. The maker of the popular PlayStation gaming console operates the PlayStation Network, which allows a gamer in Omaha to play Final Fantasy against a fellow gamer in San Diego. Earlier this year, the PlayStation Network suffered a mind-boggling cyber-attack that exposed the personal information of more than 70 million users, including, in some instances, their credit card details. Not two weeks ago, Sony endured another hacking attempt, though this one was more limited in scope.

The company no longer makes innovative, isolated electronics; it makes products that connect to the cloud, and that makes them vulnerable.

Soon enough, many more manufacturers will confront this new world of cybersecurity challenges. Carmakers may be next. Automobiles are more communicative than ever these days, and that chattiness—through Bluetooth transmissions, GPS calls, and services such as OnStar—makes them vulnerable to digital intrusion. Check out Businessweek’s recent article on researchers who successfully hacked a car and gained control of functions such as braking.

Or consider something even more intimate: a medical device that lives in your body—a pacemaker or artificial limb, for instance—and connects to the cloud to report its status and the status of its patient. The Food and Drug Administration recently issued guidelines to such manufacturers to help them secure the devices they sell. On the organization’s FAQ page, one finds the question, “Why is FDA concerned about security of networks?” Its answer:

FDA is concerned about the security of networks because vulnerable OTS software can allow an attacker to get unauthorized access to a network or medical device and reduce the safety and effectiveness of devices that connect to those networks.

This new world of connected-product development demands adjustments by manufacturers. They must develop new competencies in cloud security or partner with trusted parties with the needed expertise. They must create a new sort of disaster-recovery plan that defines effective responses to cyber-attacks and the loss of customer information—and even the potential for customer harm. They must adjust their concept of liability, too. Warranty management must be understood in the context of all possible threats against a connected product and its owner.

This emerging world also demands that we categorize manufacturers in new ways. Discrete and process labels were easy to understand, and “hybrid” captured those companies that combined elements of the two. Now we have what we might call “connected manufacturing.” This combines the traditional skill set of the manufacturer with new competencies born of the cloud.

You may not be a connected manufacturer today, but five years from now you might be. Consider the ramifications now and plan for a future in which you manage product lifecycles further into the field than ever before.

Posted in Customer Relationship Management (CRM), Enterprise Asset Management (EAM) / CMMS, Product Lifecycle Management (PLM) | Tagged , , , , , , , , , , , , , , , , | 1 Comment

An Outage Obstructs Enterprise Mobility

Last week, BlackBerry users, including myself, got a taste of what it’s like to work without their smartphones. This server outage was a nuisance for individuals, but a real productivity problem for large enterprises.

 

It didn’t occur to me that I was one of the many victims of the BlackBerry blackout last week when my e-mail messages stopped streaming onto the device’s display screen.  My immediate reaction was to take out the battery and reboot. Nothing. Hmmm. In need of professional advice, I turned to my desktop and sent an e-mail to my company’s corporate help desk. It was then I was told that the Research In Motion server outages that were impacting users in Europe, the Middle East, and Africa, had spread to the North American continent.

OK, no big deal, I thought. It will be fixed soon enough, I mused, as I moved from my desk to the conference room for a meeting, cradling my BlackBerry like a wounded bird, while thinking: “You’ll be back to normal soon enough, my little friend.”

That was at about 10 a.m. By 4 p.m., I was no longer mollycoddling my little friend. Instead, the smartphone that was no longer so smart–it was now just a phone–was on the receiving end of my evil eye, which would periodically shoot invisible daggers its way. I have to get on the train soon, I thought, and I don’t want to be completely unconnected while traveling the Northeast corridor. Of course, I have my notebook computer with the Wi-Fi connection, but it’s just not the same.

It was then I realized how completely BlackBerry-dependent I am.

Listening to other people moan and groan about the lack of service clued me in that I was not alone.  The fact is, most companies are now considered a mobile enterprise. People work productively when they have information sitting literally in the palm of their hand. Take that tool away, and productivity suffers.

Or, if you happen to be a company that has standardized on BlackBerry smartphones, last week’s outage could have brought your business to its knees. According to a Wall Street Journal article, some companies are now evaluating a backup plan for their BlackBerrys. Meanwhile, other corporations are reconsidering their choice of smartphones altogether. All this, as RIM struggles to win back the trust of its 70 million customers.

One way RIM is trying to do that is by offering free applications to individual users, and one month of free tech support for its enterprise customers.

For CIOs that know it is not that easy or cost-effective to just switch plans and distribute new handsets to every employee, the RIM offer is a good start. But now when it comes to managing enterprise mobility, IT departments have yet another thing to worry about. On IT’s current to-do list: application deployment and management, security, and governance.  But reliability has always been a given, right? Not anymore.

It is not just the device manufacturers or makers of mobile OS and apps that pose a risk; carriers could experience bandwidth issues in the wireless spectrum that would cause service disruptions. This latest incident serves as another reminder that it is time to start forming a backup plan in the event of a wide-scale wireless infrastructure outage. Because, as we BlackBerry users know, it does happen.

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Steve Jobs on Sustaining the Future

A business is only as strong as its next idea. Apple’s Steve Jobs reminded us that business sustainability depends on a company’s ability to project its worth far into the future.

 

The sustainability of any endeavor hinges on a clear vision of its future state.

I considered that premise this morning against the backdrop of the Wall Street protests that have enlivened downtown Manhattan for the past few weeks. My inspiration came from an NPR interview featuring Amy Kremer, the chairman of the Tea Party Express group. Whatever your political affiliation, Kremer’s point seems unassailable: Raising one’s voice in protest is healthy, but in order to create a sustainable movement, a group must coalesce around a vision of the future.

We can apply this maxim to manufacturers, too. The vision we’re talking about here does not involve forecasting next year’s sales or predicting the share price 90 days out. It is this: Imagine the world in 10 or 20 years. Then define the role your company will play in that world. Sustainability lives on that far horizon.

Consider Apple, which might have lost its rudder with the passing of founder Steve Jobs. But for all that Jobs accomplished in creating beloved products, he did more for Apple by laying out a vision of its future. He sensed the importance of the cloud and developed the iCloud. He anticipated the convergence of the Internet and TV and launched Apple TV. Now, even as his co-workers, family, and fans mourn his loss, his long-term plans fill the pipeline in Cupertino. These are the seeds of sustainability.

Apple did not ensure sustainability, for instance, by linking its future to the wildly popular iPod. No doubt, Steve Jobs foresaw a day when the iPod’s capabilities would migrate to other Apple devices and make the original obsolete. Some people speculate that Apple will soon sunset some versions of the iPod. Steve Jobs envisioned the future state, and developed new products with it in mind.

Too often, manufacturers think of the future in terms of SKUs. Sustainability isn’t found in a SKU. It comes from meeting needs—those present and those imagined. And that foresight needn’t reside in a lone visionary like Steve Jobs. Strong business leaders are important, of course, but so are the ideas that percolate among the rank and file. Try crowdsourcing your company’s future state. You may be surprised at what your employees have already imagined.

In today’s volatile markets, the investors you have today may not be the investors you have tomorrow, let alone 10 years down the road. But your customers will surely be there. Figure out where you will fit into their lives then, and you will sustain your place in the future.

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