This is the third segment of my “doing more with less issue” and it deals with enterprise content management (ECM).
Companies generally invest in ECM solutions to address specific business problems dealing with email and electronic records management, collaboration, search, reporting and analytics, and ad-hoc or structured workflow—all essential tools that enable an administrative framework to bloom. These are also the tools required to begin capturing, preserving, and re-using the intellectual knowledge that flourishes across the enterprise.
Using an ECM strategy to support an information governance program helps to manage problems with content-loss risks and knowledge leaks before the business is adversely affected. Managed repositories of corporate content, that are accessible across business units or geographies, serve critical channels of information distribution, even after the originating author leaves the organization. An ECM deployment ensures that content is securely controlled in the context of its business function. ECM can also serve as the cornerstone for content collection and protection initiatives for e-discovery and regulatory needs.
Although manufacturing productivity has been greatly improved by ERP systems, which do reduce inventory times and increase quality, there is still a great deal more to be done. By embedding ECM within an organization’s ERP application, business transformation is enhanced. An integrated ECM-ERP application allows an organization to build a unified environment for their business users, reducing duplication of effort, and providing a flexible environment for collaboration. It also provides interoperability between content that was once disconnected by applications, allowing for faster process-associated decisions to be made organization-wide. Manufacturing departments can further benefit when they adopt ECM solutions to efficiently document the many steps in the manufacturing process, which aids with the adherence to regulatory requirements.
In The Deep Art of Enterprise Content Management, Jim Murphy says: “Rather than existing separately from established systems, like ERP, content management acts as an extension of them allowing for exceptions to the repeatable processes governed by ERP, as well as recognizing and capturing processes and data that should be managed in those systems.”
Capturing the Value of Information
With the administrative framework acting as a backbone, and information about assets optimized, the day-to-day interactions between people, process, and information becomes much more efficient and effective. To take full advantage of this connection, an unobstructed view into all sources of related information is essential.
Inherent to manufacturing companies is the need to anticipate problems, modify fixed assets (for tasks like de-bottlenecking), and to meet technological and business changes. In essence, an enterprise must plan for change, manage change, track change, and resolve the problems that change causes. Managing change, especially where hazardous materials are involved, is one of the largest business processes for a facility. If not done properly, change mismanagement proves costly and problematic for any organization.
Regardless of one’s role or discipline, managing a problem becomes significantly more difficult if correct, current information is unavailable. The need to search for diversified information about a fixed asset, such as drawings, procedures, contracts, and other vital documents, becomes ever so critical when planning for change. Decisions based on poor or missing information, or outdated versions of documents, compound mistakes and augment costs. But information visibility, through the integration of an ECM Suite with an ERP system, exposes all transactional data to ensure accuracy, speed, and utmost value.
Friday, May 15, 2009
Wednesday, May 13, 2009
Do More With Less: Three Sure-Fire Strategies for Manufacturers – Dealing with the Administrative Framework
Every business today competes in two worlds: the physical world of resources and the virtual world of information. Executives must pay close attention to how their companies create value from both of these, as the means for accomplishment are different for each. It can go without saying that managers who understand how to master both physical resources and information resources will have a distinct advantage.
In Exploiting the Virtual Value Chain, Jeffrey F. Rayport and John J. Sviokla, talk about this extensively: “Creating value in any stage of a virtual value chain involves a sequence of five activities: gathering, organizing, selecting, synthesizing, and distributing information. Just as a company takes raw material and refines it into something useful…a manager today collects raw information and adds value through these steps.”
The infrastructure of an organization depends on how people and processes work together, and how information is shared between those individuals, processes, and departments—ultimately the entire enterprise. Recognizing that there is a process flow related to how tasks are completed and information is shared, and that each process is different, there are some core aspects to consider when defining the administrative framework.
People
The first aspect of the administrative framework addresses the people that are involved in the process. How easy is the process to manage? Is the information supplied by the previous person about the task-at-hand adequate enough to move the process forward? Is the output from the previous person in the process adequate enough to enable the next person to complete their task?
Process
The second aspect of the administrative framework relates to governance issues, which is where authority and risk are delegated. Process includes checks and balances, levels of automation, and business rules.
Information
Information completes this trilogy. Do people have to research additional information to complete their step in the process? Are they re-entering information? Do they have access to the most accurate or current version of the information?
All three of these components are critical: people, process, and information. For example, consider the complexity of executing a process where engineers, finance, purchasing, and legal all work together on a daily basis to solve business problems vital to the operation of the organization; each player with different information needs, procedures, and processes to follow. Situations like this occur when starting new projects, dealing with contracts, application for expenditure (AFE), or management of change in Occupational Health and Safety Administration (OHSA) regulated businesses. There is no question that companies are effective in solving these problems, but are they efficient?
People, process, and information are the conduit through which a business interacts, from one end of the value chain to the other. Apply too much control and operational demise occurs. Retain silos of information and you’ll isolate functional steps that force information replication, opening the door to data that is rife with mistakes.
Next time I’ll discuss the importance of a good enterprise content management system to tie it all together.
In Exploiting the Virtual Value Chain, Jeffrey F. Rayport and John J. Sviokla, talk about this extensively: “Creating value in any stage of a virtual value chain involves a sequence of five activities: gathering, organizing, selecting, synthesizing, and distributing information. Just as a company takes raw material and refines it into something useful…a manager today collects raw information and adds value through these steps.”
The infrastructure of an organization depends on how people and processes work together, and how information is shared between those individuals, processes, and departments—ultimately the entire enterprise. Recognizing that there is a process flow related to how tasks are completed and information is shared, and that each process is different, there are some core aspects to consider when defining the administrative framework.
People
The first aspect of the administrative framework addresses the people that are involved in the process. How easy is the process to manage? Is the information supplied by the previous person about the task-at-hand adequate enough to move the process forward? Is the output from the previous person in the process adequate enough to enable the next person to complete their task?
Process
The second aspect of the administrative framework relates to governance issues, which is where authority and risk are delegated. Process includes checks and balances, levels of automation, and business rules.
Information
Information completes this trilogy. Do people have to research additional information to complete their step in the process? Are they re-entering information? Do they have access to the most accurate or current version of the information?
All three of these components are critical: people, process, and information. For example, consider the complexity of executing a process where engineers, finance, purchasing, and legal all work together on a daily basis to solve business problems vital to the operation of the organization; each player with different information needs, procedures, and processes to follow. Situations like this occur when starting new projects, dealing with contracts, application for expenditure (AFE), or management of change in Occupational Health and Safety Administration (OHSA) regulated businesses. There is no question that companies are effective in solving these problems, but are they efficient?
People, process, and information are the conduit through which a business interacts, from one end of the value chain to the other. Apply too much control and operational demise occurs. Retain silos of information and you’ll isolate functional steps that force information replication, opening the door to data that is rife with mistakes.
Next time I’ll discuss the importance of a good enterprise content management system to tie it all together.
Friday, May 8, 2009
Do More With Less: Three Sure-Fire Strategies for Manufacturers – Fixed Assets
Yesterday I talked a bit about the project I’m working on that will help manufacturing orgs “do more with less”. I outlined three specific areas where I believe organizations can direct their attention to realize cost savings and improved operating margins.
Today I’m going to talk about Fixed Assets.
Within manufacturing organizations, it’s a struggle to continually monitor the location, condition, and status of tangible infrastructure items, like physical property and equipment assets, used in the manufacturing process. In complex facilities, the volume of fixed assets number in the thousands, and each item requires proper tracking and maintenance. Often, the lack of information about fixed assets causes considerable problems that compound over time, bringing about unplanned down-time and unexpected costs. Asset management is often regarded as the responsibility of the maintenance department, but the responsibility extends well beyond maintenance to safety, environmental, and facility management functions. Consider, for a moment, the information required about a fixed asset to effectively operate a piece of equipment. The following list details the information required for every asset:
Yet many disconnections still exist between the various pieces of a fixed asset’s information. Quite often, this information is siloed in multiple, unrelated systems, causing duplication, errors, and omissions; costly mistakes that frequently go unnoticed.
Consider the following as an example. Asset information is maintained solely by Purchasing and Maintenance, but every department relies on their own version of the information. When Purchasing makes a decision about buying spare parts it is entirely possible that they will continue to purchase components for a previously decommissioned asset. This seemingly inconceivable problem is a very real issue that becomes costly when repeated over a number of assets and for an extended time.
Operational Readiness
The road to operational readiness is complex. The importance of building a solid AIM strategy upfront can’t be understated. Leveraging AIM as a foundational element of this strategy will help ensure effective operation of the facility and will minimize overall lifecycle costs. It is critical to set expectations for standards, structure, and workflow upfront to gain buy-in from engineering, design, and construction groups. It is also imperative to lay out expectations about the type of data to be collected, and when and how it will be passed off, to ensure that engineering, safety, and maintenance specifications are met. This information provides the critical insight and intelligence needed to establish operational readiness on the shop floor.
Adopting AIM is a collaborative process that requires individuals and groups to freely share the tools and information that are used to complete tasks and achieve departmental goals. Asset Management personnel need the flexibility to conduct routines that ensure equipment is optimized, maintained, and operationally effective. When the inherent value of equipment is maintained, and access to information about those assets permitted, disparate data is amalgamated across the enterprise. Predictive maintenance programs, the capture of critical information on an ongoing basis, and the establishment of best practices become achievable tasks. But in order to make this happen, information traditionally kept in a maintenance system should connect to the organization’s Enterprise Content Management (ECM) system by utilizing individual assets as common bonds. Consequently, when anyone needs to find the information required to maintain an asset, or to make a decision about that asset, all the information is centrally available and highly accurate.
Manufacturing organizations can deduce tremendous value and cost savings when optimizing asset information from multiple sources in one, central repository. A solid asset management strategy can lead to organizational gain in terms of reduced operational risk, reduced financial risk, increased workforce productivity, ease and speed of access to critical, decision-making information, decreased wrench time, and decreased equipment downtime. Therefore, an effective asset management strategy enables an organization to manage and function collaboratively in an efficient and intelligent manner.
Next week, I’ll discuss the second part to this which is dealing with the administrative framework.
Today I’m going to talk about Fixed Assets.
Within manufacturing organizations, it’s a struggle to continually monitor the location, condition, and status of tangible infrastructure items, like physical property and equipment assets, used in the manufacturing process. In complex facilities, the volume of fixed assets number in the thousands, and each item requires proper tracking and maintenance. Often, the lack of information about fixed assets causes considerable problems that compound over time, bringing about unplanned down-time and unexpected costs. Asset management is often regarded as the responsibility of the maintenance department, but the responsibility extends well beyond maintenance to safety, environmental, and facility management functions. Consider, for a moment, the information required about a fixed asset to effectively operate a piece of equipment. The following list details the information required for every asset:
- Equipment data sheet
- Asset Hierarchy Master or Register
- Fixed Asset Tag number
- Maintenance information and records
- Reliability information
- Maintenance activity lists or job routines
- Consolidated Bills of Material
- Standard Operating Procedures (SOP)’s and safety procedures
- Training manuals
- Update drawings
- Management of Change (MOC)
Yet many disconnections still exist between the various pieces of a fixed asset’s information. Quite often, this information is siloed in multiple, unrelated systems, causing duplication, errors, and omissions; costly mistakes that frequently go unnoticed.
Consider the following as an example. Asset information is maintained solely by Purchasing and Maintenance, but every department relies on their own version of the information. When Purchasing makes a decision about buying spare parts it is entirely possible that they will continue to purchase components for a previously decommissioned asset. This seemingly inconceivable problem is a very real issue that becomes costly when repeated over a number of assets and for an extended time.
Operational Readiness
The road to operational readiness is complex. The importance of building a solid AIM strategy upfront can’t be understated. Leveraging AIM as a foundational element of this strategy will help ensure effective operation of the facility and will minimize overall lifecycle costs. It is critical to set expectations for standards, structure, and workflow upfront to gain buy-in from engineering, design, and construction groups. It is also imperative to lay out expectations about the type of data to be collected, and when and how it will be passed off, to ensure that engineering, safety, and maintenance specifications are met. This information provides the critical insight and intelligence needed to establish operational readiness on the shop floor.
Adopting AIM is a collaborative process that requires individuals and groups to freely share the tools and information that are used to complete tasks and achieve departmental goals. Asset Management personnel need the flexibility to conduct routines that ensure equipment is optimized, maintained, and operationally effective. When the inherent value of equipment is maintained, and access to information about those assets permitted, disparate data is amalgamated across the enterprise. Predictive maintenance programs, the capture of critical information on an ongoing basis, and the establishment of best practices become achievable tasks. But in order to make this happen, information traditionally kept in a maintenance system should connect to the organization’s Enterprise Content Management (ECM) system by utilizing individual assets as common bonds. Consequently, when anyone needs to find the information required to maintain an asset, or to make a decision about that asset, all the information is centrally available and highly accurate.
Manufacturing organizations can deduce tremendous value and cost savings when optimizing asset information from multiple sources in one, central repository. A solid asset management strategy can lead to organizational gain in terms of reduced operational risk, reduced financial risk, increased workforce productivity, ease and speed of access to critical, decision-making information, decreased wrench time, and decreased equipment downtime. Therefore, an effective asset management strategy enables an organization to manage and function collaboratively in an efficient and intelligent manner.
Next week, I’ll discuss the second part to this which is dealing with the administrative framework.
Thursday, May 7, 2009
Do More With Less: Three Sure-Fire Strategies for Manufacturers
Yesterday I told you that I was working on a project that will help manufacturers “do more with less”. I wrote about this in a whitepaper and more recently an article (to be featured soon) but I thought I’d give you a taste of both of these over the next few posts. You can also listen to a podcast I recorded recently where I delve into the topic a bit more.
The gist is that many industries are feeling the effects of our current economic situation, but few as strongly as manufacturing. With market uncertainty, heightened global competition, increasingly stringent environmental regulations, and customer demand for higher quality products at a lower cost, manufacturers are facing a daunting challenge when it comes to maintaining margins and profitability.
Although business models, methods of operation, and products produced by process and discrete manufacturing companies vary, there are several common challenges for organizations of all sizes and locations:
The manufacturing sector’s senior management uses many levers to control and direct company goals, both short and long term. Management will guide the strategic path of the organization by focusing on initiatives that improve cycle times; increase organizational agility; innovate in process or product; enhance quality; control costs; examine potential effectiveness of planned projects; or implement and enforce compliance to standards. On the path to achieving these short and long term goals, there are some core business fundamentals that must not be overlooked.
The task of guiding an organization’s future will become significantly more complicated with the economic stresses we are presently experiencing. Companies that manage day-to-day operations in a reactionary way, without concern for undermining efficiency, will be at a serious disadvantage. And companies that are continuously “putting out fires,” as a cultural norm, are unready for the serious challenges that this competitive landscape yields. All in all, companies will no longer be able to abuse speed and resources to operate in a reactionary manner. On the other hand, companies that build strategies that focus on leveraging operational efficiency and effectiveness will move to the forefront where they will be better positioned to compete globally.
But where is the untapped opportunity for efficiency and effectiveness? There are three specific areas where I believe organizations can direct their attention to realize cost savings and improved operating margins:
The gist is that many industries are feeling the effects of our current economic situation, but few as strongly as manufacturing. With market uncertainty, heightened global competition, increasingly stringent environmental regulations, and customer demand for higher quality products at a lower cost, manufacturers are facing a daunting challenge when it comes to maintaining margins and profitability.
Although business models, methods of operation, and products produced by process and discrete manufacturing companies vary, there are several common challenges for organizations of all sizes and locations:
- Manufacturers are highly dependent on fixed assets to produce their products.
- Organizations are heavily impacted by fluctuations in raw material costs.
- All companies are under significant pressure to lower costs wherever possible, especially with a downturn in the market.
The manufacturing sector’s senior management uses many levers to control and direct company goals, both short and long term. Management will guide the strategic path of the organization by focusing on initiatives that improve cycle times; increase organizational agility; innovate in process or product; enhance quality; control costs; examine potential effectiveness of planned projects; or implement and enforce compliance to standards. On the path to achieving these short and long term goals, there are some core business fundamentals that must not be overlooked.
The task of guiding an organization’s future will become significantly more complicated with the economic stresses we are presently experiencing. Companies that manage day-to-day operations in a reactionary way, without concern for undermining efficiency, will be at a serious disadvantage. And companies that are continuously “putting out fires,” as a cultural norm, are unready for the serious challenges that this competitive landscape yields. All in all, companies will no longer be able to abuse speed and resources to operate in a reactionary manner. On the other hand, companies that build strategies that focus on leveraging operational efficiency and effectiveness will move to the forefront where they will be better positioned to compete globally.
But where is the untapped opportunity for efficiency and effectiveness? There are three specific areas where I believe organizations can direct their attention to realize cost savings and improved operating margins:
- Fixed Assets, with emphasis on asset knowledge and the complete asset lifecycle.
- Administrative Framework, an often overlooked and undernourished aspect of the manufacturing business. The Administrative Framework underpins almost every function within the business, and it is around the Administrative Framework that the value chain of an organization carries out day-to-day decision making.
- Enterprise Content Management (ECM) and how it impels information visibility across the enterprise.
Wednesday, May 6, 2009
Welcome to Hugh on Energy and Manufacturing!
I’m Hugh and I thought I’d jump onto the bandwagon to start my own blog… so without further ado welcome to Hugh on Energy and Manufacturing!
First off, some discretion: I’m an industry manager at Open Text, but the issues and topics I discuss here in this blog do not reflect or represent the thoughts or feelings of the company in any way.
I’m pretty eager to be writing this blog, mostly because I have hundreds of thoughts running through my head at any given time and this blog will serve as a great forum for spewing them out to anyone who cares to read them.
In this blog you’ll get a little bit of everything when it comes to discussing topics and issues on the Energy and Manufacturing industry: I’ll be writing about general issues of interest primarily focused on areas of research that I bump into. I'll touch on real world business problems that customers are dealing with that can be solved with sometimes unconventional solutions. I’ll also cover new regulations that are coming out. Who knows, you might even find a post or two about sailing thrown in for good measure since it’s what I like to do most in the (too short Canadian) summer months.
Tomorrow I’ll be featuring a new campaign I’m working on that will help manufactures ‘do more with less’ because everyone knows that we all need help in that arena during these tough times.
Stay tuned!
-Hugh
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