Process Management for Manufacturing
Businesses want to get their products to the buyer quickly. Manufacturing process management electronically bridges product design and production and allows complex products to go to market faster. Manufacturing processes are complex as are product designs and the schedules that control production. Information systems play a key role in tracking and monitoring activity as well as in planning and coordinating. The manufacturing and production of complex products falls into three phases. The first phase is "what" is being manufactured (or the design phase), second "how" it is being manufactured (or the manufacturing process management phase) and the inventory control (or scheduling phase) leads to the third phase of "when" the product will be manufactured. Information systems for the 'what' and 'when' phases have been used for a long time and are mature. It is only recently that information systems for the 'how' phase have come into play allowing electronic collaboration across the product development lifecycle. Earlier information systems supported product design with tools like CAD (computer aided design) and PDM (product data management). Now, digital manufacturing (which is another name for manufacturing process management) offers similar tools for manufacturing.
Keywords Bill of Materials; Digital Manufacturing; Lean Manufacturing; Manufacturing Process Management (MPM); Manufacturing Processes; Process Management; Product Data Management (PDM); Product Lifecycle Management; Production Process Planning
Manufacturing is an important part of the economy and the demand for manufactured goods is still strong. According to the Economic Policy Institute (Bivens, 2004) domestic U.S. manufacturers account for 76.5% of manufacturing demand and face a growing trade deficit. This fact requires manufacturers to continue to look for ways to be more productive.
On a daily basis, organizations must manage the processes that run a business. This is called process management. Golann (2006, p. 372) used the following definition of process management: "the behaviors, methods and practices for managing internal processes and actions." Operational business processes are those that are performed by organizations in the context of their day-to-day operations, as opposed to strategic decision-making processes which are performed by the top-level management of an organization. No place is this more applicable than in a manufacturing environment. Manufacturers acquire and process raw materials through a specific set of operations to yield a finished product that is either complete on its own or a sub-assembled component into another product.
Benefits of Process Management
Firms can make more money if they respond to what the market wants. Golann (2006) suggested that firms benefit from process management and that it can lead to benefits in the market called "market oriented responsiveness." This responsiveness can result in better and more innovative products as well as better customer service and support. Process management can include management of internal processes as well as external ones that affect a product. Golann (p.369) saw the benefits of process management as improving "performance and responsiveness to changing markets. These benefits are a result of a firm putting "systems, procedures and performance measures" in place.
There are other benefits that firms receive from process management including (1) the ability to develop and deliver complex products, (2) reduced time to market and (3) lower product cost. Fortin (2003) linked manufacturing process management to the ability of manufacturers to deliver complex products. Sly (2004) described the benefits of manufacturing process management as improving information quality and reducing time to market by helping to electronically link product design to production. Michel (2005) quoted Gartner as defining manufacturing process management as "planning and enabling the timely manufacture of products at the lowest cost and quality needed to achieve profit and business growth." Manufacturing process management can provide ways to identify and act upon areas where growth and productivity are possible.
Phases of Product Manufacturing
Manufacturing Process Management is a field that allows technology to support a product's full lifecycle from design and engineering through production. Fortin (2003) and Sly (2004) both agreed on three phases needed to bring today's complex products to market. The first phase is product design where the manufacturer defines 'what' will be done. The second phase is manufacturing process management where the manufacturer defines how products will be manufactured and assembled. The third phase is the inventory schedule where the manufacturer has to come up with a production schedule and determine when these design and process management activities will take place.
The Characteristics of Information in Manufacturing
Correct and timely information is critical to the manufacturing process. There are many different types of information that are managed in manufacturing. The information type and flow are governed by the product lifecycle. The product lifecycle tracks a product from the design of the product through production, sales, service, use and ultimate disposal. The ability to share information with others in the supply chain is critical to the ability of the manufacturer to improve productivity and to increase speed to market. Information can range from specifications about the product's size or composition to compatibility with other products.
Complexity of Information
There are many reasons information management and process management are complex in manufacturing. First, there is a lot of information in various formats available in different systems that may or may not be compatible. Second, access to the information may not be seamless or easily integrated among systems. In addition, the manufacture of products, even mature products, is not stagnant. There are constant changes to production based on any number of variables; from a design change to customer requests to a variation in materials. The ability to respond to changes quickly is another expectation that manufacturers must meet. Government regulations may place another burden on manufacturers to quickly adapt new processes. For example, the federal government may require car manufacturers to make modifications to their vehicles in order to comply with new clean air regulations. The manufacturers have to create new designs, conduct testing and retool their production environment to adhere to these regulations while still producing vehicles daily.
Information Needed by Firms
What information does a firm need? Golann (2006) discussed the information needs of firms related to the marketplace and characterizes information needs into three areas:
- Generating market intelligence
- Disseminating intelligence
Firms must collect information on their competition and customers, this is called market intelligence. This information must be spread throughout the organization and create activity based on market intelligence. This is called disseminating intelligence and responding to market intelligence. The ability to seamlessly access information and integrate it into the manufacturing process using technology is valuable to companies who want to grow and capitalize on the changes in the market and in customers.
Processes that must be Managed
The processes that must be managed fall into three categories: outside-in, inside-out and spanning (Golann, 2006). Outside-in processes emphasize gathering outside information about customers, channels and markets such as market research, customer feedback or processes for ordering products. Inside-out processes collect information on how to create more value through manufacturing, financial controls, technology development and human resources. Spanning processes link internal value creation to customers and markets and ultimately influence long term strategy. Spanning processes cover both inside and outside processes such as order fulfillment, manufacturing processes, order delivery, customer service and product development.
Managing Manufacturing Processes
The management of manufacturing processes is dependent upon the manager's ability to consistently improve on methods of strategy and decision-making. Traditionally, manufacturing managers excelled according to how well they came to know processes and how adept they were at adjusting processes to fit production needs. The introduction of information technology into the management of manufacturing allowed managers to balance their ability to intuitively make changes and decisions that compare to historical data and projected information. The growth of competition and the application of best practices have increased the urgency for manufacturers to fine tune the methods of managing processes.
Improving Value for the Customer
What can help firms focus and eliminate waste to improve value to customers? Parry and Turner (2006) described visual process management tools as having the benefit of improving communication and realizing the goals of lean manufacturing. Lean manufacturing is based on the concept of eliminating waste to improve value to customers. There are five principles of lean manufacturing (Parry & Turner, 2006):
- Specify value as defined by the customer.
- Identify the core set of actions required to produce the product — called the value stream.
- Align the core processes along a critical path — called making the value flow.
- Customers should pull (request) the product as needed meaning products are made just in time and inventory costs are reduced.
- Continuously improve product and processes pursuing perfection.
Lean Manufacturing Processes
Lean principles make sure that companies are not wasting materials, labor or time on...
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