Intelligent Manufacturing € March € 1995 € Vol. 1 € No. 3

The Agile Manufacturer:
A Key Component of the Supply Chain

By Bob Turek

"Our customers forced us to become agile. They demand more timely deliveries and better quality at a lower cost. Short notice reaction is required with very little information. The information system must be readily adaptable to meet these demands."
- Jeff Lang, vice president, Atronix

These words have an air of urgency, don't they? They can make your heart sink or soar depending on your readiness to react - especially if your company is facing such potentially explosive challenges today. They are explosive because a radical alteration in the way you do business may work for only a short time and be followed by an equally radical change in your products.


What Does "Readily Adaptable" Mean?
Defining visions for agile manufacturing and supply chain management are fairly simple. Establishing a business system that can radically change to support the vision is difficult and seems to fly in the face of stable, good business practices. Flexible business software applications are very important for adaptability; the technology underlying these tools is equally important. So, is client/server what we need? Relational databases? Workflow? MRP from our customers? EDI? What if we are an engineer-to-order manufacturer?

"We are acting as the manufacturing floor for our customers," Lang said. What enables this? In the case of Atronix (Billerica, Mass.), an agile contract supplier of cables and electromechanical subassemblies for a diverse portfolio of customers, enabling tools include an ability to accept MRP from their customers and having agile relationships with their own vendors. The system must enable delivery of goods from supplier to customer directly to the customer's floor. Workflow is seen as a tool that will enable this and other types of agility.

Workflow enables reengineering of basic business practices as needs dictate; and it offers a capability to continuously change which "events" drive activities to be performed by individuals within and across business entities. Think of "events" as software transactions such as releasing work orders or reporting pieces completed or the "event" of customer inventory levels dipping below an automatic replenishment point, which prompts messages to a supplier. Active "To Do" lists result, which lead to immediate reaction to events in a user-defined flow.

Synchronizing an active, changeable workflow engine into a business system will allow new business approaches to be launched quickly. This smooth, timely, cost-effective implementation of change will allow the business to react to internal innovation and external opportunities faster and faster. The event-driven nature of workflow fits the supply chain management model in the need to immediately respond to demand throughout the "chain."


Basic Software Functionality a Key
With continuous business practice change, does basic software functionality have a place? Workflow is as much a concept as it is a set of changeable and flexible tools. Good, basic functionality from a business system is also required. For example, in an engineer-to-order business, an ability to accept customer CAD drawings and develop quotes from information off the drawings automatically promotes agility.

Referring back to the opening paragraph, recall that Lang said, "Short notice reaction is required with very little information." Real value is gained from being able to assess current designs and inventory and propose alterations to the quoted product; component changes can result in automatic dimensional changes to CAD drawings and the development of cut lists and raw material purchasing suggestions for the first prototype; at the same time you can be notifying the customer of your proposed alteration to their design.

Comparison of current bills, routings and costs with margin and pricing analysis allow immediate determination of cost-effective "buildability." An "available-to-promise" check which includes material and capacity verifies the timeliness and competitiveness of not only your order but your business. Supply chain demand reaction is a vital part of the engineer-to-order environment.

Conversion of the quote to a sales order that immediately schedules all required work in the predefined available-to-promise timeframe continues the "reaction." Very little customer information is required because of the ability to compare current designs, inventories and capacities quickly.


Does Your Business Have What It Takes to Be Agile?
Instability of work force requirements plaguing many contract manufacturers is not a problem at Atronix. "Becoming agile allowed us to grow and prosper during a shakeout period in the industry," Lang explained. Their agility has allowed them to serve a diverse portfolio of customers (from medical diagnostics to textile printing), which has reduced risk and promoted stability.

Consider another important activity at Atronix: They actively involve themselves in the design of the software vendors' application tools. The quoting and estimating module of their business system provider has been cost-effectively designed to not only fit Atronix's needs, but to be adaptable with workflow concepts. This is accomplished without having to build, maintain and upgrade their own system. This is a true "win-win" for the software vendor and the manufacturer, making both business entities more agile.

Agility requires a willingness and creative urge to break the "rules" within the business's tolerance for change. What is your tolerance for change in relation to your competition? Those who don't know are already behind. If you are good at changing products and business practices, do you know the costs of change, the resulting quality of products, and the opportunities gained or lost? Measuring change in these terms is crucial to developing your change tolerance level.

Your agility will determine your fitness to operate as a viable member of the supply chain. Do you have what it takes?

Bob Turek is a senior consultant based in Los Angeles for Visibility, a developer of business information systems for agile manufacturers. He can be reached at (805) 268-8808.