IT and Manufacturing Competitiveness Fouad Mrad ESCWA Technology Centre

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IT and Manufacturing CompetitivenessFouad
MradESCWA Technology Centre
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The Global Competitiveness Report 20102011World
Economic Forum

• competitiveness as the set of institutions,
  policies, and factors that determine the level of
  productivity of a country (12 pillars)
• Ninth pillar Technological readiness
• Technology has increasingly become an important
  element for firms to compete and prosper. The
  technological readiness pillar measures the
  agility with which an economy adopts existing
  technologies to enhance the productivity of its
  industries, with specific emphasis on its
  capacity to fully leverage information and
  communication technologies (ICT) in daily
  activities and production processes for increased
  efficiency and competitiveness.
• ICT has evolved into the general purpose
  technology of our time, given the critical
  spillovers to the other economic sectors and
  their role as industry-wide enabling
  infrastructure.
• Whether the technology used has or has not been
  developed within national borders is irrelevant
  for its ability to enhance productivity.
• The central point is that the firms operating in
  the country have access to advanced products and
  blueprints and the ability to use them.

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What is Technology?

• Technology as defined by Encarta Dictionary
• Application of tools and methods the study,
  development, and application of devices,
  machines, and techniques for manufacturing and
  productive processes, or
• Method of applying technical knowledge or

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Knowledge is the Industrial raw material
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PROGRESS OF MANUFACTURING INDUSTRY
WHEN
INDUSTRY
INNOVATION
Cottage Industries
1700s
Mechanization
Centralized Industry
1800s
Process Industries
1900s
Manufacturing Industries
Automation
Transistors ICs, computers
Cellular production
Stand-alone automated CNC Machines/
Robots/Computers
Networks
Integrated Workshops
Internet
E-Manufacturing
2000s
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Market requirements

• Low price
• Better features
• Better performance
• Short delivery time
• Higher Reliability/Support
• Wide product line
• Custom made product
• Variable order size
• E-Marketing/procurement

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System Attributes

• Low direct labor
• Low WIP inventory
• High throughput rate
• High machine utilization
• Low setup time
• Low tool change time
• Process flexibility
• Quick design modifications
• Accessible designs and material (Documentation)

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Manufacturing Productivity Strategies

• Specialization of operations extreme efficiency
• Combined operations at the same machine
• Simultaneous operations at multiple machines
• Increased flexibility with programming and tool
  changing
• Automated material handling and storage
  inventory control, parts, raw material, fixtures,
  products.

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Manufacturing Productivity Strategies cont.

• Automated inspection allowing correction
  lowering scrap
• Process control and optimization reducing cycle
  times and costs and improving product quality
• Plant operations control planning, scheduling,
  floor and quality control
• Computer integrated design, plan, process
  control, and business marketing and procurement.

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Why IT in Manufacturing

• Technology is not new to manufacturing
• Technology created immense amount of information
• Should be communicated for use in the rest of the
  Enterprise
• Information has become the fourth largest factor
  of production - as important as
• raw materials,
• Labor, and
• capital

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• Increase in productivity

• Reduction of Labor Cost Reduce Human Touches

• Find and terminate non competitive suppliers

• High cost of not using IT

• Saving in materials Less Scrap and rework

• Improved Quality Better reporting and Tracing

• Reduction of time to market

• Reduction of work-in-Process Inventory Control

• Increase in flexibility Retooling, Produce to
  order

• Increase Sale revenue from better market position

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E-Manufacturing costs
I. Acquisition / Deployment /Maintenance Costs
1) Purchase of equipment 2) Installation and
Interfacing 3) Plant layout modification (if
needed) 5) Hiring/Outsourcing of skilled
workers 6) Retraining of workers
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Acquisition Issues

• High perceived risk

• Inadequacy of Traditional capital budgeting
  techniques

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High Perceived Risk
1) Capital investment 2) Unproven technology 3)
Performance of early installed systems 4)
Rapidly developing technology 5) Availability
of experienced personnel 6) Rapid job retraining
7) Communication standards
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Capital Budgeting Techniques

• Quantification of strategic and qualitative
  benefits
• Quality
• Flexibility
• Delivery reliability
• Fast response to market demands, etc
• Asset management (people, material, equipment,
  etc)

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Strategic Evaluation
1. Choosing the competitive strategy
2. Specifying the market requirements
3. Specifying the manufacturing system
requirements
4. Choosing the manufacturing system
configuration
5. Identifying the organizational constraints
6. Iterative strategic evaluation if needed
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e-Manufacturing Roadmap

• It is not enough that people want to do their
  best. They must know what to do! Dr. W.E.
  Deming.
• Plant Floor Meet the World.
• No need for complete redesign of a plant floor
• Elements in place for a good starting point
• Competencies Design, Operate, Maintain,
  Synchronize
• Enablers Integrated control and information,
  Integration of business and production systems,
  Asset management and reliability-centered
  maintenance

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E-Manufacturing Areas
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E-Manufacturing Strategies

• A way of thinking about deriving operations
  excellence out of an organization
• Take advantage of IT
• Leveraging the Internet to achieve results
• Selective and Justified
• It is not an all-or-nothing proposition
• Use modular, scalable applications
• Use commercially available IT tools

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Opportunities

• Easy to install/integrate with existing systems
• It does not require redesign of a plant floor
• Elements in place for a good starting point
• Computer based plant-floor controls generate a
  wealth of information about productivity, product
  design, quality, and delivery.
• E-Manufacturing is key in unleashing this
  information in a cost-effective manner

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Recommendations

• Join an industry cluster and/or strategic
  alliance
• Must be flexible in design and production
• Need innovation leading to productive processes
  and products
• Increased Product Technological / Creativity Edge
  (Niche Innovation, Design, Software)
• Higher Production rates Improved Production
  Technology (Management, Systems, Quality,
  Automation)

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IT is NOT all Rosy !

• IT provides strong competition tools
• The customer really does rule-and with an iron
  hand controlling a mouse
• Power to the consumer given by Internet as a
  buying tool and information source
• Get help from an expert Outsourcing!