Manufacturing Strategy MGSC 602 Prof' Saibal Ray

1
Manufacturing StrategyMGSC 602Prof. Saibal Ray

• Module 2 - Operations Systems and Information
  Technology
• Wrap-Up
• Handout 7

2
Central Role of IT in Operations

• Increasing decentralization of Information
  Technology
• Distributed architectures, networking and open
  standards permit much more local control,
  configuration, and innovation
• More and more responsibility placed with
  operations managers
• Entails new skill set for traditionally trained
  managers
• Why is this important?
• It allows those people charged with building
  operations advantage to have access to
  information and tools with fewer intermediaries

3
Two Models for Developing Information Technology
in Operations
4
Changes in Technology

• Processing is now distributed
• Networks ubiquitous
• But open and broadly available standards now
  increasingly facilitate a path based model
• Path model is more akin to the strategy of
  continuous improvement

5
Designing the IT path

• Does the IT path of the operation fit its
  competitive needs?
• Table 2 page 161

6
Matching IT path to the competitive environment

• Danger of generic World Class information
  technology
• Power of IT in transforming the competitive role
  of the operation
• IT often brings benefits to operation in the form
  of revenue generation, not just cost reduction
• responsiveness, increased ability to customize
• But revenue generation is often not part of the
  operations managers job

7
Managing the Path Some Definitions

• Concept of a Module
• A module is a unit (program, system or device)
  with well-defined interfaces to other modules
• Internal methods of module are not relevant
  unless it is subsequently broken up
• A standard is an agreed upon interface between
  modules
• An open standard is an agreed upon interface
  between modules that is not under proprietary
  control

8
Managing the Path

• Key element in a path-based approach is
  stewardship of standards
• Standards (and Open Standards) are not new
• Whitworth standard thread system

9
Open Systems (continued)

• Problem there are many, many protocols to which
  standards apply in any operation
• Examples CAD drawings, networking, e-mail
• Work closely with the IT group, and keep control
  over proliferating standards
• Problem defining open
• Truly open published and free
• Vendors love proprietary standards, and love to
  call them open
• Remember the problem is no different than, say,
  sticking to either metric or inch-based nuts and
  bolts

10
Open Systems

• Most important part of an operation managers
  technical toolbox
• Often critical for strategic flexibility of the
  operation
• Allow modular solutions to problems (the Lego
  brick approach) and easier scalability
• So why ever use a closed standard?
• More efficient, faster project completion in the
  short term
• Sometimes, the only way to accomplish a task
• Two issues
• To what extent are the standards for the
  operation open?
• How many standards does it have for each task?

11
Open Systems

• Figure 3, pg 165
• Know all the pros and cons of both systems

12
Looks easy so why is there a problem?

• Most operations are here multiple, closed
  standards even though task variety and
  specialization doesnt justify it
• Why?
• First task Have few standards
• Second task If you can do the job with open (or
  close to open) standards then do it that way

13
(No Transcript)
14
Open standards in Manufacturing

• With so many islands of automation, connectivity
  is very important
• Experience at GM
• What are the characteristics of open system?
• - Standard computing architecture
• - Standard operating system
• - Programmable in standard languages
• - Control software must be open (!)

15

• Manufacturing Automation Protocol (MAP) first
  initiative for developing a standard
  manufacturing communications protocol
• - specific implementation of seven layer OSI
  standard
• MAP was not successful
• Many other standards were proposed
• The acceptance of Windows NT as the de-facto OS
  standard (Linux?) in the shop floor and TCP/IP
  protocol for networking might at last bring real
  open system

16
Building a Platform for Improvement

• Dynamic architecture provides a mechanism for
  change and improvement in the Information System
  itself
• But each element should also provide for an
  possibly fuel improvement in other areas

17
Substitution versus Facilitation

• Is the system designed to substitute for people
  or facilitate their work?
• IT projects are always a blend of the two, but
  usually over emphasize substitution
• Which better provides for improvement?

18
Substitution and Facilitation

• Figure 4, page 168
• Very closely related to the stage of knowledge
  and also to the complexity and repeatability of
  the task

19
Substitution versus Facilitation

• 10 years ago, many systems were being installed
  to remove (labor) costs
• Less true today (arm the guerillas dont try
  to replace them with robots)
• Reason Ability to learn and adapt is limited in
  machines, so use IT to facilitate the work of the
  best learning device we have ourselves
• If substitution is the goal, ask
• - Is the system flexible enough?
• - How will it continue to improve?
• - Where does control go? To the IT group?

20
Improvement Driven IT, or vice-versa?

• Should you
• Use system to drive improvement? (Vandelay)
• Decide what you want the system to do, then get
  it built?
• Three situations
• Better mousetrap (Vandelay?)
• To learn about a new information technology
• To catalyze and reinforce change

21
Module Framework 2 Questions combined

• At what level does the technology operate?

Network/Industry Level
Aerotech
Kanebo flexibility
Vandelay cost ? responsiveness
Business Level
Rotron Innovation ? responsiveness
FASTech
DEC responsiveness
Shop/Factory Level
Motorola Innovation ? customization.quality
Cybertech cost
John Crane cost ? customizaiton
Process Level
What is its competitive objective?
Reinforce existing competitive focus
Change Competitive role of the operation
22
(No Transcript)