1660339085889 Keith Larson

Best-practices gulf is poised to widen

Oct. 10, 2006
As best-in-class, global manufacturing companies strive toward standardizing systems and improving business processes, the gulf between top-performers and technology laggards continues to widen.
By Keith Larson, VP Content, Putman Media

THE BUSINESS drivers and technology enablers finally have emerged such that leading manufacturing enterprises can operate as more than an agglomeration of local or regional identities under one corporate banner, leveraging their global resources to compete more effectively.

Yet as best-in-class, global companies strive to improve enterprise performance, a large contingent of technology “laggards,” as Boston-based research firm Aberdeen Group refers to them in a recent study, remain, “who are just beginning their journey toward excellence.”

Is the gulf between top-performing global companies and technology laggards destined to widen? If the laggards don’t begin to improve, must they ultimately cede to the global multinational manufacturers? While the answers aren’t clear, one need look no farther than the North American retail landscape, with ever fewer and ever larger corporate chains, to see where manufacturing may well be headed.

The Aberdeen Group study, “Global Manufacturing: MES and Beyond,” indicates that over the next several years, best-in-class manufacturing companies (the top 20%) will be focused on standardizing systems and business processes across often far-flung enterprises. Essential levers for improving performance will include standardized and increasingly real-time key performance indicators (KPI), as well as increased deployment of next-generation manufacturing execution, manufacturing intelligence and business analytics applications. (Adoption rate is collectively expected to double in two years, from 35% to 71% among best-in-class companies.)

Between the best-in-class and the laggards are those that represent the “industry norm.” These 50% of all manufacturing companies, according to Aberdeen’s Competitive Framework, need to focus their attention on setting global manufacturing standards, creating strategic alliances between manufacturing and corporate IT groups and devising value-focused metrics for their organizations.

Finally, technology laggards are in some ways well-poised for rapid improvement. First priorities, according to the report, include gaining visibility and control over manufacturing processes, closing the information gap between manufacturing and enterprise systems and empowering customer-focused teams to drive process improvements. Maybe I write about this stuff too much, but to hear that 30% of manufacturing companies are at this level is more than a bit alarming.

Indeed, another confirmation of the persistent gulf between best-in-class and laggard companies arose during a recent visit to our Chicago offices by Mark Taylor, U.S. general manager of EPLAN Software and Services, to talk about trends in his corner of the world—electrical computer-aided engineering (E-CAE) tools.

A believer in the value proposition of the company’s design tools and their ilk, I’ve spilled considerable ink over the years explaining how automation professionals can be more effective and productive by automating and integrating the more mundane tasks involved in control panel design. Why not design control schematics with smart, reusable libraries of control components, automatically generating error-free bills of materials, terminal diagrams, wire and tag lists?

On the best-in-class side, Taylor says he’s seen a tremendous up-tick in interest over the past nine months, primarily among large companies looking to his E-CAE tools as a way to standardize design processes on a global basis. On the other side of the coin, however, most control system designers here in the U.S. have advanced no further than drawing circle and lines in AutoCAD.

Indeed, a recent study of machine automation professionals conducted by Control’s sister publication Control Design, indicated that while two-thirds of respondents said they used a software tool to automate some electrical engineering tasks, only a third of those readers were using anything more specialized than vanilla AutoCAD (excluding AutoCAD Electrical, which Autodesk created via its acquisition of Via Development Corp.’s promis-e offering).

So, in round terms, 20% of respondents said they were E-CAE savvy, another 50% used vanilla AutoCAD and another 30% apparently were still chained to the drafting table. Unfortunately, it sounds to me like Aberdeen’s Competitive Framework is right on the money.

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