Efficient Factory

The first of the year is traditionally a time to reflect on big picture trends. In their January 2010 issue, Automation World’s Editor Gary Mintchell brings together “technologists, Users, and Pundits” to “Ponder the Future of Automation” You can read about it here at;  Automation World.

To quote the first few sentences of “the State of Innovation” is to capture the essence of Automation and why it is so appealing.

“Changing approaches now can offer a foundation for future prosperity. The technology business has always been the world of cool ideas. How can you do something faster or easier, or make a whole lot more of something with little or no extra effort?”

Appealing to some but not others. There is a shortage of qualified individuals and a shortage of innovation according to Pundits Jim Pinto and Charlie Gifford that are covered in the article.

Interesting takeaways were to do with the turmoil in the indusrty. Talking “Ten Years Out” many of the ideas springing up today are ten years out in implementation. The stoggyness of the industry is cited as a reason.

Time and time again I’m reminded of the gaps in the Automation Industry. There are the functional gaps that exist between appliances, the protocols, and the applications; in essence the “work” of the Automation industry. There are gaps in the structure of the industry as well;  a lack of standards, a lack of innovation , a lack of outward understanding, and a mypotic view by the big players in the game. All too much here for this post. Perhaps I’ll tackle it soon.

ERP (Enterprise Resource Planning) systems are expensive to build, implement, and maintain. A  new study commissioned by CFO Research Services focuses on the maintenance cost of ERP. Maintenance contracts rule of thumb often run from 10% to 20 % of the purchase price of equipment or software, so doing your due diligence right is imperative from the start. There are plenty of gotcha’s after the fact.

The full study is available here

There is always going to be a need for an information system to drive data and information to the factory floor but my personal feeling is that there needs to be a balance in information flow; not just driven from the top down, but the bottom up. The bottom up approach has more power as a pull system. A system has to be focused around the point where the money is made. It’s about throughput. Money is not made in the Accounting department, they are the scorekeepers who tell you if you are making money. A Plant Manager I knew used to say “if the machines are running – we’re making money”

ERP Systems are descendents of accounting systems that have been adapted to the factory floor. Think of the “square peg in a round hole” analogy. It’s been adapted by the need to report financials at month end.

The natural workflow is from the product. The product is most important to the customer, they could give hoot about your process. Where’s My Product? When is it going to be here? What does my product cost? I want my product to have this feature.

These ERP systems are huge behemoths that are adapted to an existing production process.

Much of the ongoing maintenance cost that you’ll incur is in direct proportion to the amount of customization you have done to fit that square peg into the round hole. When the peg doesn’t quite fit there is customization or exception management – that ultimately leads to bloat-ware.

A newer field of study is providing a different way to look at the problem. Complexity Science is an emerging field of study that has promise in factory floor systems. If you’ve read my blog before you‘ll see I’ve written about Richard Morley and his application of Chaos Theory applied to the production process – with some very interesting business results – and fewer lines of code. Now doesn’t that sound like lower maintenance costs?

Well… this title was supposed to be sung to the Nick Lowe tune, popularized by Elvis Costello, referencing ‘Peace, Love, and Understanding’ but I know it doesn’t quite work. My apologies to Mr. Costello and Mr. Lowe. The challenge of writing on a seemingly overwritten business subject was to try and spice it up somewhat. Now that I’ve got your attention, I hope I can hold it for a couple of minutes!

Realistically these three words are very important to any business or organization. Even if you are as large as Microsoft or even just starting out as a lone ranger, these are purpose statements to run your business by. Unfortunately, businesses that have taken the time to write their Vision Mission and Culture do so and it is quickly placed “out of sight, out of mind”.

The question to ask is “What is the purpose of these purpose statements?” Answering that question will get you a lot more mileage out of them.

Vision. This is the long-range goal of what you see your business becoming. It’s out there on the horizon as far as you can see. Remember; as you get closer to your ideal your horizon expands so always re-evaluate your Vision.

Mission. This is how you are going to accomplish your goal, the mission is simply explaining what course the company takes in day to day movement towards the horizon. It also plays a defining role and sets forth the values and beliefs that the company holds as most important. Companies love to hang a paragraph in their lobbies about themselves but there they sit. Many of the mission statements I have read as subjective, although that is the idea it’s good to get an objective view. It’s nice to let visitors know what you are supposedly all about but its real use is for you. To really understand this you really need to understand yourself.

Culture. This is the most overlooked of the three yet it is the most utilized in day-to-day operations. Simply put, it is the rules of the game defining how you operate as a company. It’s about what you expect from your people your customers and your suppliers. It sets behavior standards for your company. It should have tight aspects to it – absolutes and limits of what is tolerable – as well as loose aspects to it – to enable innovation.

Collectively these statements should be used as symbols to measure your strategies against. Does your new chosen business strategy get you closer to your vision of what your ideal company is? (Vision) Does it fit with the path you want to take? (Mission) Finally, is it capable of being fit into the set of rules by which you operate? (Culture)

The more clearly you can define your purpose statements the easier it will be for your employees to follow them. As well, these statements are the main things that run the company when you are not there. Your employees should understand the values inherent in them.