Efficient Factory

It seems those business models are moving in opposite directions these days. The destabilizing force of unlimited information and data is wreaking havoc with business inertia.

 Inertia; because a company set on a course tends to want to stay on that course. Once it chooses to solve a customer problem in one way it channels its resources into it, and there is cost with reengineering the chosen approach.

 In engineering circles, productizing your service makes it easier to buy. Customers have a better idea on what they are buying; a product that has more easily defined goals and functionality. Engineering services are sometimes more difficult to grasp as they are deployed as a one-off solution. For many applications, there is no way around it. The issue with engineering companies it that it leads to difficulty in growing the scale of the business.  The level of professional expertise is finite in the number of experts employed.

 Engineering talent is often the limiting factor. If your company can take that know-how and package it into a product, scalability is easier.

 Once you have a product, adding services makes it more valuable. Sometimes so much so that the product is given away at a loss or even free. Look at the costs of phones. Since its introduction in 2007 the iPhone’s price has dropped like a rock, the service however is the business model for Apple.

The introduction of the iPad last week is a good example of a company exploiting a proven platform to squeeze more hardware sales, and open up new service possibilities. The reviews are coming in fast and furoius but I’m reading that it’s just a really big iPhone. The key here is that it really is more than that. Because of the iPhones’s size, many applications didn’t work well on the small sceen.

Now that they have an updated platform, with the iPad, more services will be created to take advantage of the size. Apple is taking another run at the service-product-service cycle.

The dilemma today is the rapidly accelerating rate of change. By the time you get your project off the ground the market, it’s quite likely that the worlds has moved on.

 Along comes a disruptive innovation open source to change the game your company’s committed to; proprietary Windows to Linux, MS office to Open Office, Servers to Cloud Computing. It is an increasingly clear fact that whatever strategy chosen, a business needs to keep an eye out for competitive threats to a business model. Apple’s new iPad is a complemenmtary product that extends the brand and the base technology from the iPhone.

Business-wise, it should be a winner.

Throughout history there’s been plenty written on every subject. Much of it is either out of print or hard to find. Coupling technology with information is yielding a new seemingly low cost effective way to blow the dust off the covers of these old texts.

It’s happening on a couple of fronts. Google has been digitizing classics for some time and has recently entered into an agreement with the makers of an automated book binding machine. Another effort is known as the Guttenberg project

http://www.gutenberg.org

On 9/28/2009 Alan Reiter published a story about a new automated distribution model for book sales.  

http://www.internetevolution.com/author.asp?section_id=526&doc_id=182325&

In it he introduces the Espresso Book Machine that is an on demand publishing outlet.

When you consider the print on demand business model it’s really an example of distributed manufacturing.

Each automated machine is its own manufacturing plant churning out a book one at a time from a digital library of millions of titles. Compare the physical inventory of finished books to the raw materials inventory of ink and paper and you’ll get the idea. It’s far more efficient to carry raw materials that can be quickly manufactured into what is usually held in finished goods inventory. The throughput matches the demand.

What’s making the model viable is the flexibility of the medium. Hard copy books are just not as portable as the information they contain. Digitizing them also makes them more useful. Digital editions are searchable and can be far more useful. Developing semantic search technologies are making search across volumes possible.

Automation combined with the flexibility of information makes this possible.

Call it M2M (Machine to Machine) Smart Services, the Embedded Universe, or whatever you like; it’s nice to see a pull out section in this issue of Information Week Magazine (September 7 2009).

  The Internet of Things Handbook Written by Amy Rogers Nazarov

It’s a good primer on one of the next evolving branches of the interconnectivity of everything we call the internet and beyond. With the emphasis on social networking applications such as Facebook, Linkedin, Twitter, MySpace, and many others it’s encouraging to see some mainstream press on the other internet where people are not as involved as the machines themselves.

 The social networking trend shows that the world has definitely embraced Web 2.0. Now make way for Web 3.0. It is the internet of data; specifically Linked Data. The “handbook” doesn’t cover it but a very good overview was given by Tim Berners-Lee this year at a TED Talk.

Relating the internet of things to the idea of linked data gives rise to Web 3.0. The Information Week article is good but when you put it in the context of how Tim Berners-Lee explains the net evolution of the web it truly is a powerful future.

 Here is a section of links mentioned in the article that expand on the “handbook’s” ideas. Some of the “Information Week” links were re-directs to the Internet Evolution WebPages; I’ve included the original links from that site.

 We Are Smart Dust, we Are Golden…

http://www.informationweek.com/1240/ie/dust

http://www.internetevolution.com/author.asp?section_id=526&doc_id=152005

Why the Internet of Things’ is ready for Prime Time

http://www.informationweek.com/1240/ie/internet

http://www.internetevolution.com/author.asp?section_id=697&doc_id=170349

We Need Digital Transformation Not Just broadband

http://www.informationweek.com/1240/ie/transform

http://www.internetevolution.com/author.asp?section_id=757&doc_id=175793

Next Up For IT: Making Sense of the Data Glut

http://www.informationweek.com/1240/ie/data

http://www.internetevolution.com/author.asp?section_id=625&doc_id=176181

IT Connects The Internet Of Things

http://www.informationweek.com/1240/ie/connect

http://www.internetevolution.com/author.asp?section_id=625&doc_id=176477

Jim Pinto recently commented on his “Pinto’s Points” Blog on future trends in manufacturing:

http://jimpinto.com/enews/25aug2009.html

Quoting from Jim’s August 25^th Newsletter;

We must recognize that major parts of the economy – government, banking, insurance, health care, consumer services – use physical wealth, but do not create it. Financial services now comprise 45% of earnings of companies on the S&P 500 index, up from 10% just a quarter-century earlier.

Manufacturing is a primary wealth-producing sector and historically is responsible for this country’s relatively high standard of living compared to other countries. Manufacturing has now declined to about 11% of America’s GNP. The continued decline is ominous.

The Society of Manufacturing Engineers (SME) has an initiative that identifies emerging technologies that are making a positive impact on manufacturing. SME’s Manufacturing Enterprise Council collaboratively selected five “innovations that could change the way you manufacture”:

• Direct Digital Manufacturing (DDM): Use of additive fabrication processes; manufacturing components layer by layer, direct from 3D digital data, without machining, molding or casting.
• Ultra capacitors: Electrochemical capacitors that have an unusually high energy density and provide significantly more storage power, with unparalleled life span.
• Self-Assembling Nanotechnology: Manufacturing at the microscopic level.
• Intelligent Device Integration (IDI): Monitoring, managing and servicing of intelligent devices over the Internet.
• Integrated 3D Simulation and Modeling: Desktop supercomputers will revolutionize simulation and modeling, acting through microscope, telescope and time-machine operations to manage, view and tool a complete manufacturing system.

Perhaps a fortuitous result of the current recessionary environment is that the manufacturing decline is being recognized and addressed in new and innovative ways.

End Quote

Here is a link to an ealier discussion on the subject from American Machinist Magazine:

http://www.americanmachinist.com/304/News/Article/False/79569/

The major innovation we are concerned with at EfficientFactory is Intelligent Device Integration. This single innovation is not limited to manufacturing but will open up a wide range of applications. As devices have more intelligence built into them and get smarter, applications will be built to link all of these things together. The factory floor is a very confusing place, where disparate communications standards and protocols exist that don’t talk to one another.

This is the essence of distributed computing. Today the processing power is behind your screen in the box under the desk or on your lap. Soon the processing power will be all around you, fed through wires and waves – in the cloud.

Jim Pinto’s thoughts are covered in a monthly column in Automation World

http://www.automationworld.com/columns-5818

Recently on NPR’s Marketplace there was an encouraging story about struggling automotive part manufacturers and there quest to fing new markets for their idled machines. They are going green. Listen or read about it at the Marketplace website.

http://marketplace.publicradio.org/display/web/2009/07/09/pm_michigan/

The piece comes off somewhat as a commercial for Michigan companies. Not to take anything away from them, Michigan has fallen on hard times, harder than most. The network of supply chains to the struggling automotive industry has a cascading effect of bad news.  The suppliers a few links away are looking to fill up idled capacity.

How are they going to get there?

The tough business of auto parts manufacturing has been a good proving ground for cost containment and productivity increases. There are however new hurdles to overcome.

Flexibility is the key.

Many machine owners are taking one of two tacks. Ether they are engineering custom machines for custom applications or building in more flexibility required to create many different kinds of parts for many different applications.

The issue that automotive parts manufacture’s face is the cost of retooling. Here can be an immense capital expense with owning machine tools. That capital expense is analyzed against the expected life of the tool and the expected contract for the part. The big unknown is the forecast demand and the longevity of the part. These productive assets are required to make profits. If the tool is “too custom” and over engineered, the payback can be slim to none, or even a loss. Adding another facet dramatically lowers the cost. If the tool is FLEXIBLE in its application, the cost becomes far more palatable.

The cost to tool for a part can be very expensive. In order to compete on the global manufacturing field the automotive supply chain has invested a tremendous amount of capital to stay in the game. The leg up that Michigan may have, is that it has plenty of the machine tool infrastructure there hungry for new work.

Michigan’s factory in the NPR piece is more efficient than most by a long shot. The ultimate way to measure, is in the price quoted. Can a company make the same part as another thereby making more money? The longevity and volume of automotive parts is historically long. As these plants retool out of their niche in the automotive sector, they’ll find that, because of shorter production runs, making their machines and processes more flexible will help them be more successful in this new manufacturing environment.

Just a couple of weeks after the post on Boeing’s innovations in the supply chain, a new wrinkle was announced yesterday. Boeing is buying Vought Aerospace based in South Carolina. You can read or listen to it at NPR’s website;  Boeing To Buy 787 Parts Plant In S.C.

It seems the strategy to outsource the parts for their new jetliner is more onerous than they thought. There is a lot to the decision in the story reported by NPR. Plenty of the reasons given are traditional, and undoubtedly have a major role in the decision.

I’ll go a little further than the NPR story does and postulate that another reason for the purchase is to develop a more inclusive culture between the two companies.  What is of increasing importance in corporate culture is the exchange of information. Information exchange in a timely manner, in a common format, and that that is system compatible is increasingly important in today’s advanced manufacturing environment.

It’s tough to do throughout your own company let alone throughout your suppliers. It is however getting easier. Ultimately, the decision smells of “plan B”

Stay tuned, the bird will fly.

We should be getting to a major milestone soon. He 787 will be airborne for the first time very soon. It’s coming up

The 787 as seen on 070807

 on two years since Sunday, July 8^th, 2007 or 7-8-7; the date that the new 787 Dreamliner rolled out in Everett Washington to much fanfare and a slick video production. Uunfortunately the cabin was bare inside. I just happened to see it first hand months later in November, on a plant tour of the Everet Faciltiy. Airplane number 1 was dusty and dirty and in various states of unassembly.

It’s true they missed initial launch date by a long shot but in their defense, Boeing had two important innovations to roll out. First, the product; this is the largest production composite structure ever made. The carbon fiber fuselage and wings makes the entire aircraft much lighter and 20% more fuel-efficient. It was a big task from an engineering and production standpoint. They are clearly charting new ground.

The second major innovation is the method of manufacture. Boeing decided to create an extended supply chain for finished major components of the airplane. It outsourced the manufacture of these components bringing them together in Everett Washington. Boeing is now primarily the designer and assembler of the finished product, leaving the parts manufacturing and subassemblies to others for the first time in aviation history.

Many issues with the manufacturing strategy cropped up over the last couple of years. Yes, there was a machinists stike early on but production delays were largely attributed to confusion and miscommunication from the supply chain. Information about the parts and information about the process did not always correlate. The status of readiness of parts wasn’t available or was often in the wrong format. The expense incurred of solving the problems is immense. Just consider the costs of lost revenue of waiting for two years for the most popular airplane in history. The presales figures have been very impressive having orders for over 850 new 787 jetliners.

The readiness of the supply chain and syndicate that Boeing set up are what many consider the root of the delay. If information was in the same format and standards were applied, much of the confusion could have been avoided. It’s clear that the information about the process and product were indistinguishable to Boeings problems.

The learning curve may be long, but Boeing is coming to the end of it, successfully.

Here are some promotional videos and multimedia about the 787 from www.newairplane.com

Remember the classic 1970’s books about declining quality in the car industry? The Lemon-Aid series of car manuals, have been issued annually since the 1970s. The quality crisis of the lemon was beaten. North American cars consistently rank as high or higher than the imports in quality. But now there is another crisis on our hands. So what does manufacturing do now in the 2000’s? Two of the big three are in bankruptcy. It seems as thought he auto industry has had a pretty good run, The Model T rolled out of Detroit starting in 1908 and by 1927 Ford had built over 15 million.   The 20^th century was definitely the century of the automobile and succeeded in driving the growth of the US economy and providing THE base for manufacturing

So where do we go now? How is manufacturing going to change now that these mighty two have fallen? In this age, it seems that “bigness” is not going to be a successful attribute anymore. The too big to fail argument is been hit a number of times in the last year. The quick, flexible, and the nimble are going to be the winners in the future. The companies of the future are the ones investing in the systems to adapt quickly. It’s a big change from what has traditionally driven industry.

Many think the most important trend in manufacturing is going to be the information about the product and process. Not just the information but also how relevant it is from the time it’s collected to the time it’s put to use. Technologies today are getting closer to that point but still factories are clusters of disparate information that don’t correlate. Different protocols for sending and receiving information and different data formats make the issue difficult. Traditionally a control issue is solved with a unique solution. Typically, a solution to a problem is seen as an engineered solution, and implemented as a single solution, for a single instance of a problem.

The effective use of information to take action rapidly is equally as important. Charts, graphs, and dashboards are nice to have but the killer applications of the future will combine these elements into the process seamlessly. They’ll do so by closed loop adaptive feedback mechanisms. It’s happening now but there is long way to go, and much value to be created in the process. Last year, in Information Week magazine, GM (A healthier GM than exists today) was completing an upgrade to their IT across all plants. In this article they were only thinking about some of the potential new technologies like Zigbee and Bluetooth. At least GM does realize that there is going to be plenty more adoption of new technology.

You can read it here

The Chryslers and GM’s, and even the Fords and Toyotas are going to be smaller and more nimble. Looking at the future and making a prediction is tough. The one thing that’s clear is that these events of the last year brought on a dramatic change. We are at the crossroads now. With some insight, the path taken will lead to prosperity. Manufacturing has to make the right investments to ensure prosperity.

If you give it away, they will come. That’s what they have been doing with MySQL for over ten years now and its success is measured as being the second most downloaded application, after the Firefox browser. But how do they make money?

A week or so ago I sat down with a few other techies interested in learning more about open source. Sun Microsystems provided the venue. They were recently gobbled up by Oracle, and last year Sun gobbled up MySQL. Now Oracle owns a popular open source application that competes with it’s flagship database product.

The question in lots of minds  is what will happen to this great resource now that a company that’s famous for retiring acquired products in favor of its own. Cutting to the chase, it’s really too soon to tell, but there is an interesting wrinkle happening.

The free version of My SQL is every bit as robust as the paid version. It’s not “cripple ware” that lets you use it for a time period before it shuts off or provides limited functionality – it’s the same source code for you to use on your own. That’s the wrinkle; you’re on your own. However, in the interconnected world of today the user community of others “on their own” provide the support.

We learned that some very large companies rely on it as their main database. Facebook uses it, and up untill last year they didn’t pay a dime. With the nature of these companies relying on this free application created an interesting dynamic. They want to be sure that MySQL stays around for the long haul. Understanding that they need to support them, they’ve come to a point that they cant ‘t afford not to pay them. MySQL is too important to die. When a company is profitable, that’s when they are all too happy to begin paying for direct company support or customization.mOst issues can be solved by the users community but companies relying on MySQL go to the fron to f the line.

It’s a nice win-win-win scenario; a win for the fledgling startup; a win for MySQL; and a win for the companies that use it.

There is an interesting parallel happening today with newspapers and the future of manufacturing. I saw this short report on CBS News Sunday Morning this last weekend while sipping my morning coffee. It’s done by “Fast Draw” a couple of guys that use simple drawings and animation to explain difficult concepts.

Newspapers began as highly distributed pamphlets in the time before the American Revolution; they went through a stage of consolidation and now are becoming a distributed model now that blogging is on the rise.

Click the Image to Play the Video

The strange thing is that no one saw the decline of modern newspapers happening, or at least they weren’t set to capitalize on the change.

To draw another parallel to revolutionary time is the vision of Thomas Jefferson. His ideal of America was a nation of small farmers. Each owning enough land to survive in essence he intended the freedom for individual Americans to be self sufficient growing what they needed and trading the rest.  The opportunity is trending toward the small nimble manufacturer that can take advantage of shorter production runs that are in lockstep with the increasing speed of change of consumer demand.

The pervasive pulse of information given to us by the internet is a destabilizing force for large entrenched organizations. But it is a windfall for those that see beyond these institutions and for the large firms that can adapt. It’s all about the information; the product is becoming secondary.

 Here’s to a nation of small manufacturers — lookout China.