Collaborative Manufacturing Management - Makes Companies World Class Competitors.

Business/Technology Editors

DEDHAM, Mass.--(BUSINESS WIRE)--Oct. 29, 2001

In recognition of the factory floor's growing importance within collaborative value networks, ARC Advisory Group has defined a new management practice: Collaborative Manufacturing Management (CMM). This practice focuses on business process synchronization as the key to integrating internal manufacturing operations with external partners. ARC defines CMM in its recently published Strategy Report "Collaborative Manufacturing Management Strategies". For a free copy, go to: www.ARCweb.com/promos/cmm.asp.

CMM enables companies to organize, monitor, control, and manage their extended manufacturing enterprise including customers, plants, and suppliers. It provides a value-added means of leveraging Internet technologies and partners to compete more successfully. CMM will become the basis for achieving improved cost, quality, asset utilization, customer satisfaction, and competitive advantage.

Business Process Management (BPM) is the foundation of CMM

CMM drives the enterprise using business processes; knitting together inter-departmental businesses and manufacturing processes with external partners. Sharing information throughout the enterprise is more important than ever. However, CMM goes far beyond merely connecting for faster transactions. It includes synchronizing the internal practices with external business systems. BPM is emerging as the critical functionality to compete in the developing collaborative value network environment.

Next-generation applications will operate in the context of a broader business process workflow. This is not a new idea for many factory floor or plant systems; they have been automating workflow for nearly a century. However, this is a radical departure for traditionally passive, transaction-based business systems. Now, automation & control process design methodologies are entering business operations.

At a deeper level, "Collaborative Manufacturing Management is managing by controlling the key business and manufacturing processes in the context of the enterprise's value networks," according to Greg Gorbach, ARC Director of E-Manufacturing ([e-mail]) and the principal author of the report. "CMM builds upon a collaborative infrastructure, business process management services, and real-time strategic business management tools, together with critical applications, production systems, and enterprise information to maximize the responsiveness, flexibility, and profitability of the manufacturing enterprise, together with the overall effectiveness of the value networks."

Changing Value Proposition

CMM is a response to the major shifts in the manufacturing value proposition. Global competition and declining prices are forcing manufacturers to examine their position within a Value Network. Many are moving away from optimizing individual business sections because an improvement in one section often causes greater declines in others. Now, leading manufacturers are moving to distributed, synchronized business process management. They have begun to optimize processes for enterprise-wide effectiveness.

Many manufacturers have been building their infrastructure, incorporating Customer Relationship Management (CRM), Advanced Planning and Scheduling (APS), Supply Chain Management (SCM), e-Procurement, and Logistics systems. Some have begun replacing aged automation systems with new Collaborative Automation System (CAS) components. Many have also experimented with Portals and Exchanges. The leaders incorporate real-time business intelligence, analysis, and decision support tools for top management. These supporting systems are important. CMM focuses on the automation, control, and management of business processes among these systems.

Time to Act is Now

Manufacturers need not wait. Affordable, practical CMM technologies and solutions are available today. Just look to electronics manufacturers who have pioneered the use of some of these technologies to become agile. CMM can improve response to changing market conditions, streamline new product introductions, improve asset utilization, increase or maintain market share, reduce inventory, and reduce cycle times. All these improvements are important contributors to profitability, competitive advantage, and shareholder value, and most suppliers can offer a "hard dollar" value proposition that manufacturers can factor into their assessments.

Note to Editors: This document can be used with attribution to ARC Advisory Group. For a graphic on 'CMM Infrastructure', please contact Maryanne Flynn at [e-mail].

About ARC Advisory Group (www.arcweb.com)

ARC Advisory Group provides strategic planning and technology assessment services to leading manufacturing companies, utilities, and global logistics providers, as well as to software and solution suppliers worldwide. From Global 1000 companies to small start-up firms, ARC has the strategic knowledge needed to succeed in today's technology driven economy. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax [phone], E-mail [e-mail], Web ARCweb.com.