The Industrial Revolution brought us mass manufacturing. Manufacturing 2.0 delivered high-tech automation that dramatically increased our productivity and enabled mass customization.

Today [individuals] can bring the capabilities that mass manufacturing allowed to a very small lot size. – John Rogers, Founder and CEO of Local Motors

The next manufacturing revolution is about empowering individuals with the same types of manufacturing capabilities that were once only available to large corporations.

The plummeting costs of manufacturing-related technologies (e.g., CAD software and 3D printers) has reached the point where this field is now accessible to the average person. It’s easier than ever to become a manufacturer.

Nature Mill Rises from Humble Beginnings

In the past, innovators and enthusiasts had to settle for assembling a kit. Today, they can be involved in everything from design to final assembly.

Take Russ Cohen, the CEO of Nature Mill. In true startup fashion, Cohen launched Nature Mill in his garage to make an automatic compost bin. In the beginning, Cohen built prototypes by hand using a metal bender and a jig. These prototypes offered his contract manufacturers a general idea of what to build, but were imprecise and resulted in re-engineering before production.

Fortunately, computer-aided design (CAD) software has become affordable and fairly easy to use. Cohen purchased the CAD program SolidWorks and taught himself to use it. According to Cohen, CAD has become a lot like Microsoft Excel in that “nearly anyone can use the basic functionality right away and learn the complex stuff as you go.” Cohen is now able to share exact engineering specs with his contract manufacturers, which eliminates guesswork and accelerates time-to-market.

To find contract manufacturers, Cohen uses the site Alibaba. In this forum, anyone can post CAD schematics for what they want built. Contract manufacturers willing to make it happen respond with a bid to take it from concept to product. As it turns out, tapping into a broader community to manufacture things is gaining in popularity.

Local Motors Creates a Manufacturing Community

Another instance of individuals taking manufacturing into their own hands is Local Motors, which produces crowdsourced cars. The Local Motors model is simple: people submit design prototypes and Local Motors helps build the best ones in a microfactory over a couple of weekends.

What’s fascinating is that anyone can submit their idea and get feedback from a community of engineers, car enthusiasts, industrial designers and fabricators. It could potentially transform automotive manufacturing from an industry that once required a multi-million (or billion) dollar investment to one that anyone with a passion for cars can tap into.

John Rogers, Founder and CEO of Local Motors, says that he started the company “to speed up the pace of technological innovation in the automotive industry.” But he also wanted to prove a point: everyday people can be manufacturers.

When I look at the technologies available today, I tend to agree.

Manufacturing Technologies at Our Fingertips

I’ve already highlighted several technologies that are giving people a shot at making their ideas a reality, but here’s a more comprehensive list:

• Crowdsourcing – Crowdsourcing is an approach to idea generation and product development, not a technology. However, there’s a variety of tech resources available that enable crowdsourcing for any kind of project; check out Open Innovation for a great list.
• CAD Software – 2D and 3D designs created with CAD software can be saved in a sharable file format before production. You can access professional-grade CAD software on a subscription basis for $19.95/month from Local Motors.
• 3D Printing – 3D printers are rapidly decreasing in price, making it affordable to create a prototype model of a CAD design. Some 3D printers, such as Objet, are already powerful enough to make small numbers of finished items. As this technology advances, the hope is that individuals will be able to produce larger batches of finished products.
• Manufacturing-as-a-Service – Manufacturing is following software’s lead and becoming an on-demand service. Online manufacturing directories like Alibaba and ThomasNet can connect you with a manufacturer that will build for you so you don’t have to invest in any equipment.
• Cloud Computing – The Cloud isn’t a manufacturing-specific technology but it deserves a mention because of how cost-effective it makes running a product business. Cloud solutions like NetSuite and Plex provide affordable solutions for managing orders, inventory, accounting and other business functions.
• E-commerce – Of course, the Internet is a critical enabler for any business these days. Sites like eBay, Amazon, or your own e-commerce website, make it easy for customers to find and buy from you. If you’re interested in running your own e-commerce site, you should check out Volusion and BigCommerce.

Collectively, these technologies make it easier than ever to go from idea to product to market. We’ve already seen technological advances democratize music, film, publishing and other industries. Why not manufacturing?

I'd also like to thank Leslie Barry, CEO and co-Founder of GetViable, and Frank Cerullo of GameWear for their input on this article. Thumbnail created by kakissel.

Much of the recent coverage around the manufacturing skills gap has focused on its root causes, which are by now familiar: baby boomers are retiring, shop floor automation is increasing the technical skills required in manufacturing jobs, and youth are disinterested in pursuing a manufacturing career.

Whatever the causes, we now need to work together as a nation to overcome the skills deficit. I see three ways to achieve this:

1. Strengthen educational partnerships;
2. Invest in corporate in-house training programs; and,
3. Energize the workforce of tomorrow.

The first two strategies will help manufacturers overcome the problem of hiring a capable workforce in the near-term. Meanwhile, energizing youth about pursuing a manufacturing career will help create a supply of workers for the long-term.

Strengthen Educational Partnerships

Technical colleges (and other parts of academia) are perfectly positioned to equip a new manufacturing workforce with the right skills. There is already an extensive network of schools that partner with manufacturers to teach relevant skills. These partnerships need to be strengthened.

One such partnership is the Society of Manufacturing Engineers’ collaboration with Tooling U–an online training program that provides curricula for everything from CNC machining to welding. Tooling U partners with colleges, trade associations, media groups and industry to develop training programs that align with the skills manufacturers need.

Since its inception, Tooling U has helped 100,000 individuals revamp their skill set to find jobs at roughly 1,200 companies.

Partnerships like those developed at Tooling U need to grow in number and size because they are proven models for workforce development that can have an immediate impact on the skills deficit.

Invest in In-House Training Programs

The success of programs such as Tooling U prove that manufacturers can make a difference when they get involved in workforce training. Manufacturers that are serious about hiring the right people should implement their own skills training programs.

We have a model that shows that training in-house is highly effective: the Training Within Industry program. Hugh Alley, President of First Line Training, pointed out in a recent conversation that this program helped train two million women and eight million men after WWII.

According to Alley, firms that use this program usually achieve close to a 25 percent reduction in the time it takes to train an employee.

Over the last three decades, however, in-house training and apprenticeship programs have steadily declined across the industry. Many of these programs were cut for budgetary reasons. A recent study of UK manufacturers suggests that domestic manufacturers should bring these programs back.

Semta–a UK manufacturing association–analyzed the value of apprenticeship programs to manufacturers. Roughly 80 percent of surveyed UK manufacturers said that their apprenticeship program makes them more productive. Furthermore, 83 percent stated that they will rely on apprenticeships to fill future work needs.

While it may be difficult to find workers with the exact skills to match job openings, manufacturers can train people with the right aptitude. Investing in a talented individual can limit staffing problems and pay substantial dividends for manufacturing productivity.

Energize the Workforce of Tomorrow

Solving the workforce needs of today does little good if the next generation is disinterested in working in manufacturing. In the longer-term, manufacturers will need to get youth interested in manufacturing by exposing them to it in a fun, engaging way.

One example of this is a Tampa Bay program called STEM Goes to Work. The program takes students on manufacturing facility tours. While there, students get to talk with manufacturing employees, management and CEOs. They learn about manufacturing careers and what it takes to land one of those jobs.

According to Janet Bryant, Director of Corporate Development at iDatix, the tours also incorporate a fun element. For instance, when students visited a gear manufacturer, they were given a challenge to build workable gears out of Styrofoam.

Here in Austin, National Instruments gets young people interested in manufacturing and engineering through their Lego Mindstorms project. Lego Mindstorms features a combination of lessons and competitions where students are tasked to build simple robotics.

While these kinds of projects don’t develop manufacturing-specific skills directly, Reut Schwartz-Hebron of Key Change Institute notes that they “help foster critical thinking ability, which ultimately makes it much easier to learn manufacturing skills later in life.”

How do you think we can overcome the manufacturing skills gap today and in the future? Please leave me your thoughts in the comments section.

Thumbnail created by limaoscarjuliet.

Marc Halpern, Vice President of Gartner Manufacturing Industry Advisory Service, recently suggested that crowdsourcing could fix manufacturing by leaning on crowds for some aspects of product design and development. I caught up with Halpern to learn how crowdsourcing might work in the manufacturing industry, and what needs to happen before it can gain widespread acceptance.

What is a “Crowd” in Manufacturing?

Before diving into how crowds can be tapped for great ideas in manufacturing, Halpern had a distinction to make: not all crowds are created equal. The type of crowd that’s useful for product development depends on what’s being developed. Designing a t-shirt, for instance, is a far cry from developing a new medical device. In the manufacturing industry, crowdsourcing is typically best-suited for the engineering, scientific and enthusiast crowd, not (necessarily) the general public.

Crowdsourcing Can Speed Up Innovation

The manufacturing industry has received a lot of media attention lately for being an essential innovation hub in the United States. According to Halpern, crowdsourcing can be a great way to accelerate innovation and bring the best mix of ideas to the manufacturing industry. By placing an open call to the community and contracting out the design process, says Halpern, manufacturers can rapidly gather great ideas to bring to market with only a fraction of the effort or investment.

Sound far-fetched? Well, Proctor & Gamble gave crowdsourcing a whirl back in 2002 when the company couldn’t figure out how to print images on Pringles cans. To solve the problem, they turned to RTC North, a European scientist network. The search led them to a professor-run bakery in Bologna, Italy where the owner had figured out how to use inkjet technologies to print images onto pastries. By licensing this technology, P&G was able to bring this idea to market in just under a year. The experience proved so successful that the company now relies on outside collaboration for up to 50 percent of its innovations–a 40 percent increase since 2002.

Crowdsourcing Creates What the Market Wants

Beyond improving the exchange of ideas, crowdsourcing can also be useful for keeping companies “in touch with the tenor of the market,” says Halpern. Procter & Gamble isn’t the only large company seeking the wisdom of crowds for product innovation. Clorox, 3M, Johnson & Johnson and others regularly rely on networks such as Innocentive and YourEncore to crowdsource their product ideas.

One of my favorite examples of crowdsourcing in manufacturing, however, comes from a small company called Local Motors. Local Motors uses crowdsourcing to design vehicles and then contracts with micro-factories to build them. They recently made big news when they won a Department of Defense competition to build a combat vehicle. Next up, they’re crowdsourcing the design of an electric car. With gas prices on the rise, crowdsourcing an affordable electric car design could create the market innovation that meets current green consumer demands.

Three Ways to Make Crowdsourcing Mainstream

If crowdsourcing has been successful for these companies, why aren’t manufacturers embracing it even more? As it turns out, Halpern explained, there are three obstacles that need to be overcome before crowdsourcing can become mainstream: fear of change, intellectual property issues, and a lack of design sharing technologies. Halpern shared three strategies for overcoming these obstacles.

1. Ease into crowdsourcing for idea creation. Historically, many manufacturers have taken the attitude that if it wasn’t invented within the “four walls,” an idea didn’t merit consideration. This can be a tough change management issue to tackle. One piece of advice Halpern offered is to start using crowdsourcing with a fringe product that isn’t core to the business. “These products can be used as a training ground for managers to get used to the approach,” explains Halpern. After a few successes, they might get bolder about introducing more products through crowdsourcing.
2. Divide projects to protect intellectual property (IP). IP theft is a big concern in the manufacturing industry. What’s to stop an outside party that collaborates with Proctor & Gamble from taking those ideas and collaborating with Clorox? Compartmentalizing roles in the project can help limit the problem of information sharing. For instance, a manufacturer may want to crowdsource just the fuel cell for a car but keep the rest of the car design proprietary. To protect the IP of the car design, manufacturers can limit information by narrowly defining crowdsourced project roles and information access.
3. Create a single file sharing system for design files. There is a broad ecosystem of computer-aided design (CAD) software out there, with each system running its own flavor of XML code. This makes it difficult to share design files with collaborators. While creating a universal standard for CAD programs is beyond the reach of any one manufacturer, the industry as a group could push for format standardization. In Halpern’s view, creating a standard format and standard environment that everyone could use would go a long way toward enabling more crowdsourcing projects in manufacturing.

A few years ago, crowdsourcing product design and development in the industry wasn’t even a topic of conversation. This year, Local Motors is hosting a competition to design a car that they'll build at the International Manufacturing Technology Show. The fact that it’s being openly debated in the manufacturing community–and actively used by Fortune 500 companies–indicates that there is movement afoot in the industry. Whether that movement continues depends on how well these obstacles are addressed.

What do you think will be the future role of crowdsourcing in the manufacturing industry? Can it hit the mainstream? Please leave me your thoughts below.

Roughly 81 percent of B2B companies reported using social networks to some extent in 2011. The manufacturing segment of the B2B crowd has been somewhat less active. As Jeffrey L. Cohen, a Social Media Marketing Manager at Howard, Merrell & Partners, points out, “most manufacturers aren’t even online, let alone using social media.”

Forrester’s report indicated that only 30 percent of global manufacturers planned to increase social media spending in 2012. The fact that global manufacturers are jumping into the social game is great news, but what about the little guys?

In my opinion, small- to mid-sized contract and job shop manufacturers have the most to gain from building social media channels. In an industry that relies heavily on word-of-mouth to acquire business, social media tools can help contract manufacturers and job shops stand out from the noise and gain a competitive advantage on a global scale to win new customers. In this article, I discuss how manufacturers should get started with social media.

A Quality Social Media Presence Requires Strategy

Developing a social media strategy is just like developing any other part of your marketing strategy–it takes some planning and an upfront investment to make it work.

You first need to find out which social media channels your target audience uses. Having a sophisticated social media strategy won’t matter if no one is listening. To see if you have an audience out there to interact with, use a tool like WeFollow, which groups Twitter accounts based on topical relations. This search shows all the accounts that align with manufacturing.

Equally as important as finding your audience is the willingness to listen to them. Social media is an interactive two-way street–it’s not a one-way broadcast medium. As such, manufacturers should use social media as an opportunity to solicit ideas and engage in dialogues. For instance, find out from customers how to improve a product, or get input from engineers on how to tweak designs. Talk back, and thank people for participating. If you’re not willing or able to do this, stop here.

The next step is to identify the right tools to execute your social media strategy, and make the most of them. Each tool provides a different way of connecting to your audience. I’ll dive into how manufacturers can use Facebook, Twitter, blogs, YouTube and LinkedIn to their advantage.

Facebook and Twitter Enable Constant, Bite-Sized Engagement

Facebook and Twitter are the most popular and accessible social media tools available. Branded Facebook pages and Twitter accounts are a great way for manufacturers to continuously share small, easily-digestible messages to interact with customers and get their name in front of prospective clients. Facebook can be used to share things like product photos, get customer feedback on new designs, and even to advertise your services by purchasing Facebook ads. For a great how-to on building a great branded Facebook page, check out this Inc. article.

Twitter is an effective medium for sending out 140-character soundbites about your company, such as brief new product or service announcements, special offers or breaking industry news. By adding one or more hashtags to a Tweet, manufacturers can expand their reach beyond the people who are following them and join a conversation on a topic. A few of the popular hashtags that I’ve run across in the manufacturing industry are #manufacturing, #mfg, #lean and #buyamerica. By using hashtags, manufacturers can dramatically increase the number of people tuning into their message.

Blogs and YouTube Are Information Sharing Hubs

Blogs and YouTube provide manufacturers with the opportunity to do more than simply promote their brand; they provide a place where manufacturers can tell their story and provide industry knowledge using the richer media of long-form stories or video.

It’s important to maintain a balance between self-promotion and education on a company blog. In the words of Val Zanchuk, CEO of Graphicast, “waving the corporate flag too often can really turn people off to your message.” For instance, Zanchuk recently used his blog to advertise the fact they just achieved ISO 9001 certification. However, Zunchuk also makes an effort to update readers on manufacturing news by sharing important articles.

YouTube is a highly-effective venue in which to educate buyers while marketing to them using video. Consider making video demonstrations of products and processes, a tour of your factory, or showcasing customer testimonials. The key is to share information in a video format that your customers would find relevant and interesting. For instance, this CARR Machine & Tool video demonstrates how the company handles customer orders, while implicitly showing the company’s dedication to service.

By the way, video production is no longer the daunting technical challenge or costly expense it once was. You could certainly hire a videographer to make polished videos for you, but first get your feet wet with a $300 high-definition camcorder.

LinkedIn Can Help Fill the Funnel

A final tool at the disposal of manufacturers is LinkedIn, which can be used for priming the sales funnel. In a recent conversation with Zunchuk, he mentioned that LinkedIn is a valuable tool in his social media arsenal because, “once you get a few hundred contacts, your network is typically in the millions.” More often than not, someone within his network is able introduce him to a sales prospect they’re targeting. At the very least, says Zunchuk, someone can offer advice on how to go about developing a relationship with the sales prospect.

Beyond building connections, it’s a good idea to join relevant LinkedIn groups such as the Fabricators & Manufacturers Association to keep yourself abreast of the latest industry trends. Joining these groups also offers an opportunity to demonstrate industry knowledge and expertise by answering community questions. For instance, being able to answer a difficult CNC prototyping question for an individual with a design problem could help win business that otherwise would have flown under the radar.

Moving Forward with Social Media as a Manufacturer in 2012

Each of these tools can be valuable mechanisms for increasing brand awareness, improving engagement and information sharing, and ultimately winning more business. Making full use of social media tools as a manufacturer, however, requires an integrated online presence that connects the company’s website with social media tools. It also requires delicately balancing company promotion with sharing relevant industry information with visitors.

With social media use in manufacturing still in its nascent stage, manufacturers that learn how to deftly navigate the “Social Web” will put themselves in a leadership position that will allow them to engage and market to an entirely new group of customers.

If you’re a manufacturer currently using social media, I want to hear from you. How are you currently using social media? What benefits are realizing because of it? Please leave me your thoughts in the comments below.

A special thanks to Val Zanchuk, CEO of Graphicast and Jeff Moad, Executive Editor of Manufacturing Executive. Thumbnail created by Nan Palmero.

These social collaboration tools have the potential to democratize manufacturing by increasing information-sharing across shop floors and supply chains. Beyond that, these streams could revolutionize the user interfaces (UIs) of manufacturing software.

Activity Streams Enable Agile Production

Activity streams eliminate the problem of information delay, a particularly vexing issue for manufacturers that operate on just in time (JIT) and lean principles. In Kenandy and NetSuite, users can subscribe to the activity stream of any object in the system–for instance, a purchase order (PO), bill of material (BOM), or product–and receive instant updates on related interactions. The ability to assign an activity stream to each object allows manufacturing teams to interact in real-time on projects, orders and more.

For example, a user can subscribe to a PO and follow it from initiation to fulfillment. If an issue arises that delays the fulfillment of that order, the production team can immediately flag it so the sales team knows of the delay and can notify the customer. This kind of instant information-sharing both improves customer service and greatly reduces the amount of time spent on communication. What used to be accomplished with phone calls, emails and faxes can now be done with a quick message.

An example of an activity stream in Kenandy regarding a purchase order.

Similar benefits can be realized across a manufacturer’s supply chain. Everyone involved in the chain can participate in the activity stream to chime in with quick updates on things like proper design specifications from the engineer, available inventory levels from the supplier, and delivery times from the distributor. This level of engagement democratizes the production process by providing company-wide access to information that used to be concentrated in the hands of a few.

Activity Streams Turn Manufacturing UIs Into a Daily Dashboard

Beyond increasing information sharing and employee engagement, activity streams also transform manufacturing UIs into what Rod Butters of Kenandy refers to as a “daily cockpit.” According to Butters, manufacturing UIs were historically a place where BOMs were entered and stored so that manufacturers could run material requirements planning (MRP) applications and produce reports and paperwork.

With the addition of activity streams, Butters elaborates, “the software becomes a place where manufacturing lives.” It allows individuals to share analysis and feedback on the transaction data and the reports that are generated. Roman Bukary, Head of Industries Marketing at NetSuite adds, “social activity streams in manufacturing take the data of manufacturing software and help explain why it matters or what to do about it.” In short, it creates a more human way of interacting with the software and collaborating to meet production goals.

Three Uses of Activity Streams in Manufacturing Software UIs

Data enrichment and social collaboration is a new spin on old problems confronting manufacturing and its accompanying software tools. In looking at how activity streams can potentially change the way manufacturers operate, I started thinking about how manufacturing software UIs would benefit from incorporating activity streams. Here are three ways I can envision.

1. Automate reminders to keep projects flowing. A key benefit of an activity stream is that it automatically updates subscribed users with the latest feedback or action taken. This could be used to create task reminders that help keep shop production running smoothly. Such a UI would remind each employee of their current and future projects at the appropriate time, enabling them to stay on task and to plan ahead.
2. Stream educational reminders along with tasks. Activity streams allow employees to contribute in a feedback loop, through which they will inevitably share some useful educational information. Manufacturing UIs could collect this information and attach it to tasks as reminders to the individuals performing the task. That way, employees know a best practice for each task they’re expected to complete. Many applications have integrated wikis which can store some of this information, but they require the user to seek it out. In contrast, a stream with this information attached proactively delivers the right information at the right time to the right individuals.
3. Aggregate the most pressing tasks for immediate action. A final benefit I see in activity streams is that it keeps employees abreast of the highest-priority action items. In the stream, employees can quickly determine the best way to handle an issue confronting the shop. Manufacturing UIs could adopt this approach by automatically organizing the day’s shop activities according to which task brings the most benefit to the shop as a whole. For instance, an order may need to be completed and rushed out to a crucial client before production on a new PO can begin. A manufacturing UI that can order tasks by importance would help manufacturers become more efficient.

While activity streams mature and gain a foothold in manufacturing, the implications for manufacturing UIs are sure to expand, as well. These are the impacts on manufacturing production and corresponding software tools that I see activity streams having today.

What implications do you see activity streams having on UIs? How about the manufacturing process as a whole? Please leave your thoughts in the comments section below.

Thumbnail image created by wellohorld.

Despite the popularity of both approaches, the debate persists. Some manufacturers rely on sophisticated software systems to plan production, while others rely on simple Excel spreadsheets and lean principles. Still others use a hybrid of manufacturing software and lean methods.

The conflict between these two philosophies got me wondering: Why is there a rift in the first place? And, more importantly, what can be done about it? In this article, I’ll look at a few ways that manufacturing software can evolve to accommodate lean manufacturing principles.

A Brief Look at Lean Manufacturing Principles

Lean manufacturing is a production philosophy that focuses on waste reduction via improvements in the flow between manufacturing processes. In a lean manufacturing environment, waste is broadly defined as spending resources (labor, materials, etc.) on any activity that does not add value to the end customer, or detracts from profits. This means limiting inventory, labor and machine use to only what’s needed to meet production requirements. In an ideal world, a lean manufacturer would have the right supplies arrive at the right place and time to create only the products necessary to meet demand. In this way, lean manufacturing is said to “pull” orders into production as consumer demand is generated.

The Conflict Between MRP and Lean

The concept of “pulling” production to meet demand is a key area of contention between lean advocates and manufacturing software advocates. Lean advocates argue that manufacturing software is built on an outdated model of manufacturing and distribution, in which it is best to “push” production ahead of demand and promote products to sell them. But it’s more than a conflict between “pulling” and “pushing” production. Many lean advocates view MRP software as an overly complicated, transaction-intensive system. They argue that relying on these systems is inefficient and leaves manufacturers unable to adjust to demand fluctuations.

In contrast, manufacturing software advocates believe that today’s manufacturing challenges require planning tools to get an accurate picture of production requirements. This side argues that the lean model does not plan ahead to deal with the complexity and volatility of today’s planning and supply chain scenarios, which can result in inventory shortages.

Finding Common Ground Between MRP and Lean Advocates

While the conflict may appear to position these two parties on opposite ends of the spectrum, some common ground exists. As Chad Smith and Carol Ptak, managing partners at the Demand Driven Institute, noted in a recent whitepaper, both sides share a quest for flow in manufacturing operations. Flow in this context can be defined as the efficient movement of materials and information through every part of the manufacturing process. According to Smith and Ptak, MRP software advocates seek flow because materials and processes that flow are the easiest to plan and manage. Meanwhile, lean advocates promote flow because it helps pace to actual consumption, which reduces the inventory held at a manufacturing facility. The two approaches to production share two additional goals:

• Pace production as close to actual demand as possible, and
• Improve visibility into the supply chain.

With these shared goals, proponents of manufacturing software can find common ground with lean manufacturing advocates. Before that can happen, however, there are a few ways that manufacturing software needs to change.

Three Ways to Improve Support Lean of Processes

Building on this common ground, manufacturing software can learn a few things from the lean approach to production. I recently caught up with Bill Waddell, a leading lean manufacturing consultant, and Chad Smith, co-author of the third edition of Orlicky’s Material Requirements Planning, to discuss some of the ways they could see manufacturing software evolving to better support the lean manufacturing philosophy. I’d like to share a few of the ideas we discussed.

1. Incorporate support for value stream mapping.

Value stream mapping is a lean manufacturing technique that maps the flow of information and materials through the shop floor. Waddell believes that software should make this the integral part of the production process to help manufacturers identify key constraints and bottlenecks in the flow of production. These value stream maps would allow manufacturers to identify areas where flow is compromised to indicate which areas in the value stream need improvement. There are some manufacturing systems that support value stream mapping today, but it is usually secondary to batch processing functionality, forecasting, etc.

2. Continuously monitor lean metrics.

Systems should continuously track cycle times, capacity availability and production status in a way that's easy to access and analyze. These are the critical metrics of improvement under the lean manufacturing philosophy. Of these, the cycle time–the time it takes from when material arrives at the receiving dock until it leaves as part of a product–is the most important efficiency metric. Knowing capacity availability and the production status throughout helps inform manufacturers of how they can reduce cycle times.

3. Identify key places to add or subtract inventory.

Smith noted that a key capability the software needs is the ability to give you a clear picture of where to add or subtract inventory in the supply chain and your manufacturing plant. Most all systems provide methods to help companies determine when to supply and how much to stock. However, according to Smith, the primary question around inventory and materials should be where within the product, plant, supply chain and distribution network to place stock buffers. A system that can indicate where to hold inventory would help manufacturers create buffers to dampen variability, compress lead times and minimize working capital. These buffers would be set to the way the market pulls in quantity and volatility–instead of according to forecasts–to align production more closely to actual consumption levels.

If manufacturing software can evolve to better accommodate the needs of lean manufacturing, we can move one step closer to closing the rift between manufacturing software advocates and lean proponents.

What are your thoughts? How else do you think manufacturing software can change to closer align with the lean vision? Please leave your thoughts in the comments section below.

A special thanks to Bill Waddell, Chad Smith and Carol Ptak for lending their expertise to this article.

These companies represent a diverse cross-section of the job shop industry. Their custom jobs range from fabricating aircraft parts for defense contractors to creating component parts for water ferries. So what factors are contributing to their success? And what role is software playing to keep these shops competitive? These are the questions I explore in this article. I’ll also share key insights from job shop leaders about how to maximize the value of a software investment.

Key Benefits of Job Shop Software

In talking with these four manufacturers, it was immediately clear that job shop software is the critical factor in driving operational efficiencies. Shop leaders noted that the most important features of the software were those that help manage the dynamic nature of production at a job shop.

According to Brenco President Steve Heim, “Our workload is changing constantly, customer demand changes hourly and the relationship between the various processes is very dynamic.”

During my conversation with Heim and other shop leaders, three areas surfaced as essential components to consider when choosing software: flexibility of bill of materials, work order features and the ability to deliver real-time, actionable data.

1. A Flexible Bill of Materials Fosters Custom Production – Job shop production requires software that supports a dynamic bill of materials (BOM). As such, it’s important to look for BOM functionality that allows the production team to adjust materials during manufacturing processes. At the same time, there should be functionality to substitute alternative materials in an already defined BOM plan. This is a fundamental building block of job shop production and important feature for the high level of product variation in shops.
2. Work Order Functionality Maintains Workflow – It’s not unusual for a mid-sized job shop to have 200 work orders floating around at a given time. Managing these manually is a paperwork nightmare – not to mention inefficient. With automated software, however, you can deliver work orders directly to machine operators at their work stations. This prevents operators from having to go to the production manager to ask for their next tasks.
3. Real-time Data Creates a Proactive Environment – Having a flexible BOM and strong work order functionality does little good if real-time data isn’t accessible for employees to make the best decisions. The laundry list of information that needs to be kept up to date can be dizzying. A shop needs to know what’s being fabricated, what’s being scrapped, why items were scrapped, how many parts shipped and so on. Providing real-time access to this data clearly means gathering information in real time. One way to achieve this is to follow Forrest Machining’s lead: Put computers at or near every work station for workers to input data for analysis.

Beyond knowing which software components are the most important, it’s also necessary to understand how to get the most out of your system. In other words, the software alone cannot make your shop successful – you must also be able to make efficient use of the functionality to maximize your outcomes.

Shops Offer Advice from the Trenches

Getting the most out of your software starts with understanding your needs now and in the future. For instance, a system that addresses the needs of a small job shop with revenues of $2 million may not be sophisticated enough to handle the capacity of a shop pushing $15 million in annual revenue. As a result, successful shops often experience software growing pains as system functionality doesn’t always scale with production.

“What may look good and work for you well now may not work very well in 10 years if you double your sales. Conversely, if you were to buy software you think will work for you 10 years from now, you can almost guarantee that it won’t be exactly what you need right now.” Steve Heim, Brenco

Once you have the right system, you need to put in the time and energy to get a good return on your investment. The shop leaders I spoke with identified three categories to focus on in order to get the most out of your software. Collectively, shop leaders agreed that realizing the greatest technology benefits comes down to investing in employee training, following system specifications and asking your software vendor for help.

Training Employees Reduces User Errors
Making the software work takes a combination of technology, people and process. Even the best system requires skilled users to get the most out of the software. So it’s worth making sure that every employee that interacts with your job shop system is well-trained.

“In some cases we have the technology but we don’t have people trained to adequately run it. Sometimes there’s nothing wrong with the software, the problem is that untrained users are updating the system or misunderstanding the information, thereby corrupting the data.” – Ken McPherson, MIS Manager at Forrest Machining

Employees interacting with the software should have more than basic computer literacy (e.g. word processing and data entry skills). They should also understand the complexity of the system and be able to adapt to software functionality. Going to training seminars, investing in private company training and attending user conferences are all great ways to ensure your employees know how to make the most of your system.

Following System Specifications Improves Results
Equally as important as well-trained employees is following the specifications defined in the system. This boils down to two things: following the workflow the system was designed for and making sure the software is compatible with current systems in use. Taking shortcuts in workflows can lead to costly errors in things like labor costing and production planning.

“Before you do anything, make sure that the software you’re going to deploy is compatible with what you’re currently using. If you mess up the compatibility, then you’re going to be fighting a losing battle.” Tony Wynohrad, Gamma Vacuum

Meanwhile, if the current systems aren’t compatible with new software, you’re going to have trouble getting the right data – regardless of how well-trained your employees are and how rigorously you follow workflows.

Rely on Vendors for Help and Support
A final point is to rely on vendors for assistance. This is a logical suggestion but one that’s often overlooked. As Mike Mann, President of Aacoa, put it, “Don’t be afraid to ask for help and use the help that’s available.” Vendors should be working to keep your business and help you make the most out of the system. Since vendors designed the system, they’re one of the strongest resources for making the software work.

Most vendors offer an online portal where customers can ask for help troubleshooting a specific problem and find answers to frequently asked questions. Others offer support hotlines (really great packages offer 24/7 support) to answer questions and resolve system issues. Job shops should lean on these resources to learn how to best utilize their system.

These job shops are at the top of their game and are succeeding with a smart use of technology to help compliment what they do in the job shop. Running a successful job shop requires a smart use of manufacturing software. Critical to making the software compliment your job shop is understanding which features you need and then working hard to get the most out of your system.

But this is just the advice I was able to derive from a few shops in the industry. What has your experience been? Please share any other advice you have to offer.

The thumbnail for the article was produced by Ralph Bijkers.

1. What do I make?
2. What do I buy?
3. When do I buy?
4. When do I make?

Over the years, however, software vendors have attempted to differentiate their MRP and production scheduling and planning systems from other vendors. But this has created an overwhelming – and often confusing – lexicon of software terms. For instance, there are two versions of MRP software: material requirements planning software (MRP I) and manufacturing resource planning (MRP II). Meanwhile, production planning and scheduling software is also referred to as advanced planning and scheduling software, or APS. As you can see, it’s easy to get lost in the weeds pretty quickly.

To help clarify what these applications actually do, I’ve outlined the distinctions for the buyers that are either unfamiliar with the differences – or trying to decide which application is best for their business.

A Review of Software Features

Before we dive into the details, I thought it would be helpful to first share a side-by-side comparison of MRP versus production planning and scheduling systems. While both applications help manufacturers plan production requirements, an advanced planning and scheduling system is, well, more advanced.

Production planning and scheduling software draws from more complex mathematical models and is a more sophisticated system overall. As you can see from the table, production planning and scheduling extends the functionality of MRP in several ways.

	MRP Software	Production Planning & Scheduling
Bill of materials (BOM)
Inventory control
Procurement
Production forecasting
Job costing
Procurement scheduling
Process scheduling
Finite capacity planning
Finite capacity scheduling
Production planning
Workflow visualization

MRP Systems Plan Materials

MRP software is one of the oldest applications in the manufacturing software stack. Since its inception in the mid-1960s, the application has remained popular among manufacturers for several reasons. Foremost is its ability to automate several key planning functions – such as inventory control and production forecasting. Also, MRP offers manufacturers some level of production insight for every mode of manufacturing.

Of course, an MRP system performs more than just inventory control and production forecasting functions – it covers everything from product conception up until production planning. For example, after a product is designed, the system begins planning and sourcing the required parts to complete the job. During this process, the software automates key steps, such as:

• Determining what inventory is available on-hand;
• Identifying what materials must be procured (i.e., not in inventory);
• Comparing production times to lead times for parts that need to be ordered; and,
• Creating a production forecast to determine total project time.

Planning and sourcing production with MRP software works well for manufacturers that have either large runs (i.e., high volumes of similar products) or few products. In other words, this software is ideal for firms – such as a screw manufacturer – that have relatively predictable demand curves and little variation in production requirements. However, MRP has difficulty planning production when order quantities change frequently or there is variation in the type of products manufactured.

According to Carol Ptak, partner at the Demand Driven Institute, MRP systems encounter these problems because they assume that plant capacity is unlimited or they are only able to plan for a single production scenario. So even as production scenarios change, an MRP system will continue to send orders for production – even when there is no reason to produce at previously defined levels.

Production Planning and Scheduling Allocates Resources

Production planning and scheduling software was developed to address some of the shortcomings of MRP software. It attempts to create a more realistic schedule of when and how to produce, within capacity limitations. As Ptak noted, MRP and production planning and scheduling software operate in synergy – with the distinction that production planning is more concerned with operations, rather than materials.

Production planning and scheduling software is designed to extend (not substitute) the functionality of MRP in four primary ways. Specifically, production planning and scheduling software:

1. Factors in current production limitations, whereas MRP assumes there are no production constraints;
2. Uses more complex algorithms to model multiple production scenarios, thereby creating more accurate planning projections;
3. Accounts for the lead times of ordered parts to create more accurate project times; and,
4. Prioritizes jobs in order of highest profitability to ensure those jobs are completed first.

Given the changing needs of complex manufacturers, it’s critical these firms have the ability to dynamically plan production. For example, most jobs at an aerospace manufacturer are engineered to order (ETO) and require several component parts with production cycles that could span several months. These manufacturers may have to produce many different products at low volumes. An MRP system might have difficulty accommodating production variations because of the need to adjust calculations.

As with any software, however, even these sophisticated planning systems can have gaps. According to Ptak, these systems always try to keep a shop operating at maximum capacity. Therefore, when material scraps out, the system will automatically assign a new job to a shop's machines – which can lead to producing goods that aren’t needed. So it’s important to weigh shop efficiency against profitability when using production planning and scheduling software.

Choosing the Right Application

As you can see, both MRP and production planning and scheduling applications are fundamentally about creating a better, more efficient planning process. However, the degree of detail that each application can handle differs greatly. To really know which application is right for your manufacturing operation, it’s important to understand your needs as a manufacturer and the capacity of the software – now and over time.

Do you have experience with either of these applications? Please weigh in with your thoughts to share your knowledge with the rest of us.

Special thanks to Carol Ptak of Demand Driven Institute and Roman Bukary, product specialist at NetSuite, for their insights on this article.

So yet another cloud vendor tossed their proverbial hat into the ring. Big deal, right? Normally it’s not. But the launch of Kenandy rightfully made waves because it puts a very different spin on cloud enterprise resource planning software–also known as ERP software–and manufacturing. The twist? Kenandy blends social tools with manufacturing software and aims to turn manufacturing itself into a social enterprise. It’s a radically different take on manufacturing software. And it has the potential to fundamentally change the way manufacturers manage their supply chains and produce their products.

Turning manufacturing into a social operation is an ambitious undertaking, but it isn’t the only thing that makes this launch an important entry into the manufacturing software market. There are several other intangibles working for Kenandy – including their financial backers.

The Importance of the Kenandy Launch

When it comes to cloud ERP systems designed for manufacturing, start-up companies are fairly rare. Rarer still is the cloud ERP start-up that garners attention from the Wall Street Journal. As it turns out, Kenandy is the brainchild of a woman who’s no stranger to shaking up the manufacturing software market – Sandy Kurtzig.

Kurtzig is best known for being the founder and former CEO of ASK Group, the company that made ManMan. In the 1980s, Kurtzig propelled ManMan to market prominence and made the ASK Group a fortune in the process. The burning question: Is Kurtzig poised for an encore performance? Only time will tell.

In any event, I see four key reasons that make the Kenandy launch worth talking about.

1. There are very few active vendors in the cloud ERP market. As Frank Scavo noted in his initial reaction to the Kenandy announcement, the cloud ERP space is wide open. Right now, there are only a handful of vendors – including SAP, NetSuite, Plex Systems and Epicor – that support manufacturing with a cloud solution. This means that there’s plenty of room for Kenandy to hammer out market share in this area.
2. The company expects very short implementation times. Despite being founded in 2010, Kurtzig and the Kenandy staff already have a live customer. According to Scavo’s blog post, Kenandy’s first customer went live in only two weeks. Kenandy expects this to be the rule rather than the exception. Two weeks is short even by cloud standards. So we’ll have to wait and see if these implementation times hold up.
3. Salesforce is a key investor and motivator behind the scenes. Well, maybe they’re not so behind the scenes. Marc Benioff, CEO of Salesforce, was pretty vocal in his support of Kenandy and their intent to move into the ERP market. Kenandy has even taken up the motto of “No ERP” – a play on the “No Software” motto of Salesforce. Having Salesforce as a financial backer is important because they’re often viewed as the posterchild of cloud vendor viability – and the ERP world has yet to wholly embrace the cloud.
4. Kenandy wants to make manufacturing a social operation. Salesforce has invested significant capital in creating social tools. Kenandy plans to incorporate these tools into the manufacturing process. Of chief interest is the applicability of Chatter to manufacturing processes. Since Kenandy is built on the Force.com platform, developers could use existing Salesforce apps to their advantage and are sure to develop more tools designed specifically for manufacturers.

Personally, it’s this last point that I find most interesting. Although Kenandy has shared some thoughts on what social manufacturing might look like, there’s yet to be significant elaboration on the idea. It got me thinking: What might social manufacturing look like and how would it impact the industry?

Chatter Can Improve Sourcing and Industry Collaboration

To be fair, Kenandy isn’t the first to put manufacturing ERP in the cloud. The company Plex Systems proved that cloud is a viable model for manufacturing more than a decade ago. But the idea of social manufacturing is a radically different software approach to cloud ERP for manufacturing. Incorporating Chatter into manufacturing processes has the potential to reduce the need to rely on an ERP system to make vital supply chain and production decisions.

Chatter can make a positive impact on sourcing and industry collaboration by:

• Notifying suppliers when inventory levels are low;
• Quickly finding alternate suppliers;
• Instantly informing customers and distributors of available supply; and,
• Sharing and comparing best practices and key performance indicators.

But the potential impacts of Chatter on the manufacturing industry aren’t limited to communications between manufacturers and their supply chains. There are benefits to be realized within the shop walls as well.

Social Shop Floors Can Enhance Workflow and Productivity

Creating accessible and actionable inter-shop floor communication can only work if an entire supply chain and other manufacturers are members of, and logged into, Chatter. In short, it requires organizational change for effective use. While manufacturers using Kenandy wait for that changeover, Chatter can be a useful tool for project management.

For instance, the engineer of an aerospace job shop could notify shop labor that they’ve just finished designing the wing component of an aircraft. The job shop could then begin building the wing while the engineer finishes designing the other components they’ve been contracted to build. This has great implications for just-in-time (JIT) manufacturing – as it frees up labor to work on more value-added activities rather than waiting for the completion of another phase of the production.

How Will Social Manufacturing Impact the Future of Production?

Clearly, the impacts of social tools on manufacturing aren’t limited to the software market. These tools have the potential to change the way manufacturers connect with their suppliers, customers, distributors and each other. It can transform software interactions from system-to-system communication to one that people monitor and control on a much more human level. These tools have the potential to create a much more collaborative sourcing and production environment.

Of course, this is all hypothetical. Kenandy only has one live customer and we’ll have to play the waiting game to measure the true impact of social tools on manufacturing. Now, I’d like to turn it over to your. I want to hear your thoughts on the implications of social manufacturing.

What are some of the ways you think manufacturing can benefit from social production? Your ideas don’t have to be software-specific. Feel free to share any that come to mind.

This thumbnail was created by Sean MacEntee

In my view, it seems like the twenty-something and younger crowd would sooner build farms on Zynga’s Farmville or plan the next great civilization on Sim City rather than actually make it happen. This doesn’t speak to everyone in my age group, but I certainly don’t have many peers dying to break into the manufacturing industry. We’re a generation that’s obsessed with being cool, and honestly manufacturing doesn’t seem very cool.

There is a caveat, of course, in that the manufacturing of ideas is still highly valued. Everyone is racing to make the next iPhone app or create the next online money mill like GroupOn. But these ideas aren’t really producing a product in the traditional sense. Instead they’re manufacturing a smart service.

It got me thinking – can we make manufacturing cool again? That is, what will it take to make young people seriously consider a career in manufacturing? I believe in order to make manufacturing an appealing career again we’ll need to:

• Wash away the negative media images of manufacturing;
• Alter the perception that manufacturing is dead in the United States; and,
• Re-connect the youth with making things, on their terms.

Manufacturing is still an important economic driver and it can help us turn this recession around. To accomplish this, however, we’ll need more young people go into the business of producing products. Before we explore what’s needed to attract young talent to manufacturing, let’s look at a few things keeping young people from a manufacturing career in the first place.

Manufacturing Has Fallen From Grace

Manufacturing was once revered as a ticket to a middle-class lifestyle. Today, however, it seems like it’s viewed as a dirty job that doesn’t pay very well. Statistics show that although we value the role of manufacturing in our society, few think it’s the right career for them. According to an Area Development report on the 2009 Public Viewpoint on Manufacturing survey, 70 percent of respondents view manufacturing as a top priority for a strong national economy. Tellingly, however, only 17 percent of surveyed participants listed working in manufacturing in their top two career choices.

This is surprising given that the average income for a manufacturing worker is $74,447 – more than $10,000 higher than the national average for non-manufacturing workers. While outsourcing has likely taken a toll on whether young people consider a manufacturing career, I think there are several other factors at play. Here are a few things that I think make matters worse.

Few role models are involved in manufacturing. I can’t think of a single popular role model that’s a manufacturer. Most of the role models we see on television and in movies are doctors, lawyers, cops or simply uber-cool tweens. In real life, we seem to admire CEOs of powerful corporations like Steve Jobs, Warren Buffet and Richard Branson. There’s nothing wrong with aspiring to be like these people, but the lack of well-respected manufacturing figures in our society has a negative impact on our national consciousness. This is a stark contrast to the iconic figure of Rosie the Riveter and the mass appeal of images of tough, hard-working factory men that circulated in the heyday of manufacturing.

Media stories have pummeled manufacturing. The mainstream media has run an incredible volume of stories about shuttered plants and jobs shipped overseas. If you believe all the hyperbolic language, manufacturing is either dead or dying in this country. To be fair, the last couple of decades haven’t been pretty (understatement) for the industry. But many don’t realize that we’re still the world’s leading manufacturer and account for 21 percent of worldwide production. Furthermore, manufacturing is leading the progress we’ve made toward an economic recovery.

Students have lost their connection to building things. A final issue I see at play is the fact that technical curriculum has dropped off the map. As Marc Epstein notes in a great op-ed piece in The Washington Post, the value of manual education in our public schools has been undermined. Manual education once enjoyed a prestigious place in our society. Now it’s viewed as something that’s primarily for students without college prospects. In a consumer-based society that’s already far removed from how things are produced, removing manual education only widens the gap.

Why Should We Care About Pursuing Manufacturing Careers?

It’s difficult to overstate the importance of manufacturing to a healthy economy. It’s a great engine of economic growth and has ripple effects in the job market. For instance, each dollar produced in the manufacturing industry adds an additional $1.43 to the overall economy. The same can’t said about services, which adds only $0.70 to the economy for each dollar. Pat Lee of the Fabricators & Manufacturers Association summed it nicely:

There are only three ways that a country builds wealth – you make things, you mine things and you grow things. Everything else is ancillary to that. Manufacturing has the best record for add-on jobs. For every job that is created in manufacturing, there are multiple add-on jobs that are created as a result.” – Pat Lee, Fabricators & Manufacturers Association

Beyond the economic effects of manufacturing, the industry is also a great source of innovation. Investments made by the manufacturing industry collectively accounts for two-thirds of our all research and development investments. This ultimately improves both manufacturing and non-manufacturing sectors.

If we think the economy is bad now, things would be much worse if the bottom fell out of manufacturing. We simply cannot afford for this to happen, and we should fight to avoid it. In order to prevent manufacturing from slipping further as a skills gap looms and the Baby Boomer generation retires – we need the younger generation to think building stuff is cool again.

How to Make Manufacturing Cool Again

We need a strategic shift in our culture. And that requires completely changing young people’s perceptions about the value of manufacturing – and the career opportunities in the industry. This means reacquainting youth with the process of designing and building products from an early age – and then providing the creative freedom to build those things on their terms. I’d like to share two examples I’ve come across in the industry and suggest a third of my own.

1. Manufacturing summer camps – A recent New York Times article highlighted an innovative summer camp, called Gadget Camp, where teenagers learn how to build things from concept to creation. Attendees are required to design a product through computer-aided design (CAD) technology and oversee the design to completion. It’s a fun environment where kids are simultaneously exposed to manufacturing and project management, as well as how to build something. According to Lee, whose organization partially funds Gadget Camp, the camps have anywhere from 12 to 20 students. But these efforts need to be scaled up and out across the nation.
2. Gamification of manufacturing – Gamification is a hot topic in many aspects of business at the moment – one driven by the idea that adding gaming elements to non-gaming activities encourages action and participation. It's a movement that seeks to capitalize on our youth’s obsession with video games as well as our competitive nature. According to Diana Miller and Simon Jacobson’s recent Gartner First Thing Monday Morning newsletter, Invensys has been using 3D gaming technology to teach new hires how to operate oil refinery equipment for the past few years. In the same vein, Siemens recently released Plantville, a program designed to teach manufacturing processes and technologies to young people and new hires. I haven’t played it yet but it’s apparently similar to Farmville – without the productivity loss.
3. Restore shop classes to our high schools – The elimination of these courses from our school systems has inevitably had a negative impact on the way we view making a living with our hands. We can all learn from building something with our hands because it teaches us a different way to think. And more importantly, hands-on learning through shop classes helps young people move an idea from concept to creation – which is useful regardless of one’s future occupation. Personally, I missed out on any kind of manual education and instead focused intensely on research and writing as a student, which prepared me for my current job. But had I been exposed to different skill sets, I may have at least considered working in manufacturing – or realized it was an even option.

A Final Thought on Creating this Shift

Creating this cultural shift won’t come easily and it won’t solve other systemic problems confronting the manufacturing industry. However, it’s clear that unless we change the perception of manufacturing, the skills gap will only worsen and manufacturing will continue to decline.

It may seem a little strange for a 23 year old to write about why the youth should join manufacturing without being a part of it himself. In my opinion, however, this drives the point home. I could have been an asset to the manufacturing industry had I been exposed to other types of learning and given the opportunity to explore manufacturing careers earlier on.

Instead I was told that I needed to learn how to write, solve math problems and get good grades so I could go to college and avoid making a living with my hands. Because of this, I invested a lot of my own money to put myself through college and started down that career path. In truth, these are the same skills that are needed to be a part of modern manufacturing – and it’s time for Gen Y, and the next Gen, to take manufacturing seriously.

What do you think it will take to overcome the cultural barrier facing manufacturing? Leave me a comment below.