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The complexity of 21st century manufacturing – with its extended and fragmented supply chains – is leading manufacturers to rely on IT for survival.

IT alone provides the information needed to manage operations that increasingly lie beyond line-of-sight, and often in the hands of third-party service providers.

As the sole entity in the enterprise to touch every user, support every IT system, and see every transaction, the network is a critical resource.

Typically used by businesses simply to provide employees and business partners with access to critical applications, best-in-class manufacturers also view the network as a platform for hosting next generation communications tools designed to enable more efficient collaboration between functions and disciplines that do not share common applications.

A 2007 survey conducted by BT of more than 100 manufacturers found a clear linkage between enterprises’ collaborative process maturity and their ability to effectively leverage IT investments in pursuit of business goals.

Innovation demands the exchange of sensitive information across a variety of functions and disciplines often separated by great distances and many time zones, each of whom may be reliant on a patchwork of regional and local networks for access to highly specialised applications.

A variety of network services exist to minimise the impact of these challenges.

Identity management services will authenticate users and optimise routing to ensure the speedy delivery of information.

Network-based application performance management will help ensure bandwidth is always available to critical applications and performance tools, ensuring that the root cause of performance issues can be quickly established.

Similarly, network-based unified communications suites enable the easy sharing of information between groups that need to collaborate – engineers and lawyers, customer service and logistics – but don’t share common applications.

Network management tools enable IT administrators to map and monitor information exchanges and handovers, identifying bottlenecks and inefficiencies so that the product development process can be streamlined and time-to-market goals achieved.

Best-in-class enterprises are shown to be consistently better than their peers at addressing five macro-economic factors.

Critical though innovation is, its half-life is typically short and a point comes in the lifecycle of most products where manufacturers must compete on cost.

This has led manufacturers to embrace lean as a means for eliminating waste, reducing cost and streamlining processes.

The increasing sophistication of business processes – often global in scope and involving numerous highly interfaced applications – mitigates against the easy identification of waste.

Such processes are frequently complex to the point where no individual has end-to-end visibility of the process, where the interrogation of all parties involved is impractical.

Manufacturers have been at the forefront of globalisation, driven by the promise of new markets and by competition for low-cost resources.

New opportunities have proliferated and significant improvements to cost models have been enabled.

But along the way, supply chains have become extended and fragmented, and new layers of complexity have been added to the logistics operations that hold supply chains together.

Intermodal containers, for example, spend long periods of time – up to 50 per cent of their lives – either idle or undergoing empty repositioning.

Blind spots in the transport chain – inland terminals, shipper/consignee premises, and so on – contribute to this inefficiency, preventing carriers from tracking each other’s location and status in real time.

But the continued reliance of many shippers on fax, telephone and outdated legacy are likely to be automated and involve no human intervention.

The network, however, sees and supports the transactions, which together constitute business processes.

Interrogated correctly, the network will reveal these events, enabling IT to pinpoint where time is expended – frequently by identifying events that are executed serially and could more efficiently be executed in parallel – and where unnecessary cost is incurred.

As manufacturers and logistics providers move to more automated, electronic-based business processes, their reliance on the network infrastructure and features such as Class of Service will increase.

Protecting high-priority transaction traffic, reliably deploying and managing firewalls and data encryption technologies, implementing converged data/voice/video capabilities, establishing managed extranets with trading partners and effectively utilising numerous other network technologies will become even more mission critical.

As manufacturers globalise they are also increasingly virtualising their operations by outsourcing functions to third-parties, enabling them to simultaneously extend their global footprint while reducing headcount.

Contracted third-parties may in turn subcontract tasks to others.

Communications lines are becoming ever more complex and the risk of error and misunderstanding grow geometrically.

Vendor managed inventory strategies and agreements are already common among manufacturers and demand a highly collaborative approach to planning, forecasting and replenishment.

They often call for agreement on standard data formats, which in the case of XML can lead to very large transactions being passed over the network.

The network design must accommodate such standards and exhibit the security measures necessary to inspire the confidence needed for trading partners to exchange what is often highly confidential data with other members of the supply chain.

Visibility of information is critical to the success of vendor managed inventories and failure to provide such visibility can lead to buffer inventories, dummy orders and other costly dysfunctions.

Manufacturers can provide access to information, close to real time, through extranets, trading exchanges, direct ERP-to-ERP and other network technologies.

Manufacturers traditionally invested time, money and labour at the front end of their supply chain to produce finished goods, then stored them in warehouses or distribution centres until they were sold.

Inventory was viewed as an asset, with strategically-placed buffer stocks providing a cushion ‘just in case’ supply chain inefficiencies let the manufacturer down.

But holding inventories no longer serves its original purpose.

Manufacturers are embracing ‘pull driven’ business models that seek to minimise their inventory holdings in order to liberate working capital.

The ‘just in case’ philosophy has been replaced with ‘just in time’.

For this to work, a manufacturer must attain visibility and understanding of true customer demand, and be in a position to reflect these signals instantaneously to its own supplier base.

This flow of information between the enterprise’s line-of-business units, across regions and between strategic relations creates a daunting challenge for the underlying network infrastructure.

Network availability, performance, security and resilience are vital to the messaging and alert systems that provide visibility of demand signals across the supply chain.

Network-based unified communications suites enable the easy sharing of information between groups that need to collaborate and can greatly reduce the integration efforts needed to provide bridges between different applications, time zones and specialised hardware.

Furthermore, network time-synchronised visibility over information flows between regions, business partners, applications and other entities can be used to better understand and assess the effectiveness of end-to-end supply chains.

Hence, the network becomes not only a means of enabling the collaborative information flows, but also a management tool to continuous improvement initiatives.

The challenges and opportunities facing the manufacturing sector in the 21st century are enormous.

Manufacturers are responding by consolidating and outsourcing to make themselves more agile.

They are globalising presence, streamlining organisations and accelerating the pace of innovation.

The operating environments have become complex and diverse to the point where the ability of humans to establish end-to-end visibility over business processes is no longer possible, confounding our ability to manage them.

BT Digital Networked Manufacturing helps manufacturers to gain visibility – using their telecoms networks – that would otherwise be denied over the ways their business work.

Network monitoring tools have evolved to the point where information flows and handovers can be mapped with total precision.

Documents, files and instructions can be tracked and timed as they make their way across the complex network of servers, scanners, readers, printers and countless other devices involved in 21st century manufacturing.

To the extent that manufacturing operations are initiated by instructions delivered over the telecommunications network, that network can be used to provide businesses with an X-ray picture of those operations.

The visibility that the network affords over operations is atomic in its detail and complete in its accuracy.

The network sees and records each information packet that passes over it.

Rarely are the paths followed by these information flows optimal.

And if by chance they are found to be fully optimised today, it is unlikely that would prove to be the case tomorrow, given the pace of change in the automotive logistics business.

A close look will almost certainly reveal the bottlenecks, redundancies and other communications inefficiencies that one would expect to find in any complex, dynamic operation.

Visibility of these weaknesses provides manufacturers with an opportunity to address them.

Typically this will enable them to squeeze time out of key processes – often by highlighting events or activities that are today executed serially, but that could in fact be executed in parallel to reduce cost and improve efficiencies.

For most manufacturers, the network represents an unexploited resource for enabling operational efficiencies through better understanding their business processes.

BT Global Services

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