Bridge Over Troubled Water

Bad things may happen when outsourced manufacturing does not align with your quality targets, says Ari Pihlajavesi.

Not such a long time ago, product development organisations lived different lives. They often had their offices right next to the manufacturing facilities. They met production people almost every day – having lunch in the canteen, talking with each other at the coffee machine, exchanging ideas and sharing experiences. When introducing new products or solving field failure problems, they could just walk through the big steel door to the plant floor and talk with the guys and ask for their opinion.

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Just as well, the manufacturing engineers had the development organisation within their reach. When something went wrong with the new design they had quick access to the product teams to get the help they needed. People collaborated fluently, organisations were physically connected to each other and lots of information naturally accumulated in both sides of the organisation.

Today, however, we are seeing the effects of globalisation. Product engineering teams are split into different continents and challenged by the need to synchronise their development processes. Manufacturing operations have moved from Western countries into new territories in Asia, India and South America and more and more often, into external manufacturing service companies. At the same time every engineer has ten times the amount of new products to work on compared to the

1990s and therefore less and less time to spend on putting final touches to the product design, selecting the optimum components for lowest cost or planning for highest product quality.

As a result of this trend many of the former manufacturing companies – now becoming intellectual property companies – are facing the growing risk of losing visibility into their product life cycle. They still have all the responsibility for product quality but no longer effective means to control it, especially if the final products have a fast track to the end users directly from the outsourced manufacturing. In this sceneario, when something goes wrong the damage to their brand image is severe. They now entirely rely on their suppliers’ capability and willingness to build their quality systems and product know-how to the required level.

While focusing on cost savings through outsourcing, these companies often miss great opportunities to improve through better design for manufacturability, less expensive component selection, robust design for product reliability and better product testability. These opportunities are not missed because their manufacturing partners are doing a bad job. It is an inevitable consequence of a broken bridge and missing visibility between the product engineering and the manufacturing operations.

Modern software architecture can play an important role in turning around this development as it can bridge the gaps in the supply chain. A Web-centric platform like Microsoft SharePoint is a great foundation for building a virtual collaboration network over the company borders, replacing the coffee machine of the old days. With advanced analytical tools like Predisys it can provide a realtime visibility to authentic quality data created in the manufacturing service companies. In addition to the usual monthly PowerPoint summary, provided by the manufacturing service partners, the customers can now have easy real-time access to up-to-date product quality information that can be used for advanced root cause analysis and as a basis for factbased cooperation between these companies. This can be invaluable, especially when cultural differences cause difficulties in the information exchange.

For contract manufacturers, offering customer access to quality data can be a major competitive advantage. Instead of offering manufacturing services only, they create much more value by offering critical product information as part of their delivery. A practical example of this type of bridging is providing data generated in automated test and measurement systems to the customer’s R&D operation for advanced engineering analysis. The results can be used for supporting new product introductions, product design changes and component optimisations. This type of bridge alone can speed up the product launch, helping to prevent serious quality issues during the production ramp-up and later helping to make the product cheaper with safe changes to lower the cost of materials and components. Adding tools to this collaboration bridge for managing changes or corrective and preventive actions, the newly created visibility can be turned into continuous improvement, helping companies to prevent catastrophic field failures.

Generally two models are used for bridging customers with their suppliers. In the past it was usual that suppliers prepared data into reports and analytics based on their customers’ instructions. Now more and more often, customers are asking for raw data to prepare for analysis in their own systems. This ensures the authenticity of information, allows them more flexibility with the analytics, enables correlation analysis with information created in their own systems and helps them to standardise the results and metrics between different suppliers.

Bridging all the operations globally is no longer any technical challenge with Webcentric, service oriented software architecture. Emerging business process automation standards like RosettaNet, will help the companies in both ends of the collaboration bridge to create a common language. These standards include well defined information exchange formats and data models for all the areas of manufacturing information, as an example for the data generated in automated test systems. Advanced software like Microsoft BizTalk and SQL Server are perfect tools for securely automating information exchange based on these standards.

The challenge in this bridging process turns out to be more a cultural one. It requires open mentality on both sides. Do the parties on both sides understand the potential of true visibility as a great tool for product and process improvement and not just as a new means to squeeze one another? Do the manufacturing services companies understand the opportunity for adding more value to their service offering to win more business? Do both partners understand the value of open communication and the risks associated in hiding the emerging problems?

Many of the early adopters are already on the move and gaining good results. Before their competitors ‘get it’, these early birds will be the winners.