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Industrial Manufacturing

Current Trends

Industrial manufacturing has faced tremendous changes during the last 25 years driven by technological innovations, globalization, altered consumer patterns, and structural demographic and social changes. Customer markets have evolved from local to regional and from regional to global. The demand from the different markets extends from basics to the refined, straining the complexity of the consolidated offering. Dependency on subsuppliers has increased exponentially, and geographical complexity, for both suppliers and customers, has become a major challenge to manage. A gain in production costs has often been offset by increased logistics (and financial) costs. Longer lead times have resulted in declining customer service levels. And inefficiencies in these networks of collaborating partners (the value network) escalate the amount of capital tied up in assets from end-to-end.

Probably more than any other sector, industrial manufacturing has invested in the global rollout of enterprise resource planning (ERP) systems as a way of facilitating the flow of important business information between the functions within the organization. This was an improvement, but it later became clear that the need for end-to-end control of information, of cross-enterprise business logic, and of the assets spread throughout the value network (that is, among the participating business partners outside of the organization) cannot be achieved by utilizing ERP systems.

Because many segments of the industrial manufacturing sector are in a mature state, consolidation through merger and acquisitions to ensure a dominant global market share and specialization have both contributed to the momentous increase in business complexity. Inflated expectations of creating shareholder value by capitalizing on synergies between the existing and acquired entities increase pressure on top management. The focus on core business and the outsourcing of nonstrategic activities has been one method of dealing with this challenge, but this multiplies both the complexity and the non-transparency of the end-to-end business processes.

The environmental aspects of manufacturing are rapidly becoming a burgeoning cost item, and they also contribute to complexity and to requirements for end-to-end governance, visibility, and accountability across the entire Value Network.

Global markets’ recent shock of instability and unpredictability has revealed the non-sustainable nature of traditional methods of managing the dynamic complexity of modern industrial manufacturing companies.

A new paradigm for managing the extended company is urgently needed – eBuilder calls this paradigm Cloud Processes for the value network. And we can deliver it. Click Cloud Process and Value Network for more detailed explanations.


Business Improvements

Reduced Operating Costs

The end-to-end business transactions in a Cloud Process are automated and seamlessly integrated with the business logic in the value network, which consists of your collaborating business partners.

eBuilder's Cloud Processes automate more than 50% of the manual administration in handling business transactions for procurement, travel, inbound/outbound order fulfillment, after sales/customer care, and financial transactions. eBuilder makes a reality of “more for less."


Reduced Costs for Sourcing

eBuilder’s Cloud Processes enable full transparency in the procurement-ordering-delivery-financial transactions flow, thus enabling you to consolidate purchasing and enforce the correct workflow and logistical consolidation to optimize the cost and quality of sourcing. In most cases, a 3-15% reduction of costs is achieved.

The environmental parameters can be monitored and accounted for according to your company's environmental policy.

Better Customer Satisfaction/Retention

Our Cloud Processes promote the implementation of timely deliveries, as well as managed and optimized repair and return processes. This often results in a reduction of warranty costs by 5-10%. A reduction in consumer turnaround times by 10-50% is a major factor in achieving increased customer satisfaction, leading to greater loyalty to the supplier’s brand.

Enhanced Corporate Dexterity

The ability to handle dynamic complexity will have a vital impact on your competitiveness, profitability, ability to create an eco-friendly and sustainable operation, and on shareholder value. This is an even greater challenge when most organizations are increasingly dependent on external collaborating parties (the value network) to deliver end-user satisfaction. This growing interdependence is a function of increased competition, entering into new markets, and leveraging cost-effective production. In these matters, the high-tech industry is extremely exposed.

Cloud Processes link and control the value-added activities in the value network and link them to the Enterprise Resource Planning (ERP) processes. The business rules and terms and conditions that govern the value-added activities are managed centrally by the operational, tactical, and strategic functions to optimize your performance and to adapt to changes. The business improvements actualized by adopting Cloud Processes for the value network are dramatic; for instance, you can achieve ROI after less than six months.

Lean Change Management

The requirements for running a business are increasingly dynamic in our rapidly and unpredictably changing environment. And your business’s ability to react to change has a vital impact on its overall performance. With centrally managed Cloud Processes, business rules, and master data, the business logic and terms and conditions between the participants in the value network can be altered and deployed globally within days.

A quarterly improvement service is built into every Community Edition of the Cloud Processes.  The releases in this service contain new functionality, enhancements, and maintenance. These improvements are driven by the product roadmaps for each Cloud Process. They are based on factual, real-time information relevant for operational, tactical, and strategic decisions presented by the Cloud Process Service for relevant target groups.

Our Cloud Processes enable managers of industrial manufacturing companies to optimize the business and to rapidly change participants in the Value Network to effectively maximize the efficiency of the business. This is business dexterity, delivered.

Reduce the Amount of Capital Tied Up in Assets

Leveraging the shortened lead times enabled by end-to-end connectivity, you can reengineer the business process and implement “on demand” sourcing and reduce the number of consolidation points for physical goods, thus reducing the amount of capital you have tied up in assets.

In most cases, Cloud Processes enable “on demand” sourcing for a large part of goods and services the company needs, while maintaining or improving customer service levels and reducing corporate expense by lowering the amount of capital employed. Strategies like “Vendor Managed Inventory” and outsourcing of order fulfillment are methods used to leverage Cloud Process capabilities.

The increased transparency and microcontrol gained with the Cloud Processes enable you to reduce both inbound and outbound assets in the supply chain. Spare parts can be optimized for the aftermarket processes related to product life cycles and end of product life. New strategies can be developed when the lead times are lowered to a level where the delivery time allows for “production on demand.” This moves competitiveness and profitability to a new level. And it clears the way for sustainability and the minimum utilization of natural resources while satisfying the needs of the individual consumer.

Leveraging Cloud Processes facilitates “production on demand” by enabling seamless integration with the customer’s sourcing processes and your own inbound sourcing. This will drastically decrease the response time and the amount up capital bound up in production. A capital reduction of 10-30% has been achieved by changing processes and terms and conditions for sourcing and by monitoring each business transaction.

Boost Your Competitive Advantage

Cloud Processes for the value network enable increased transparency and cut lead times both in the inbound/outbound business processes, as well as for the aftermarket and customer care processes. This gives better margins and increased customer service levels while enabling finer granularity in penetrating markets with more complex terms and conditions that can be enforced with more individuality.

An industrial manufacturing company using end-to-end Cloud Processes for the value network will have a comparative advantage in shorter lead time to market and a higher service level for the end consumer, again leading to higher profitability and customer retention. In the case of business-to-business customer relationships, increased integration within the customer’s own value network leads to increased competiveness and customer loyalty while overall performance to the final customer, end-to-end, is improved.

Better Information for Decision Making

eBuilder Cloud Process dashboards provide the operational, tactical, and strategic business information that enables digital management of your value network. Among other things, this gives the respective areas of responsibility the base on which to make the well grounded decisions needed to monitor the agreed upon key performance indicators and service level agreements, key factors in creating and maintaining a competitive business. The need for relevant, up-to-date information for decision making is met by deploying the Cloud Processes, which connect your value networks. They automatically monitor business events (Business Activity Monitoring) in the entire value network and present relevant data on operational, tactical, and strategic levels together with business intelligence functionality that combines real time business events into clearly presented statistics for improved business decision making. The information is based on a validated database of historical and transactional information that has been quality assured by the Cloud Process business process network filtering and QA processes.

This takes management to a new level by focusing on deviations from contracted KPIs and on improvements rather than managing and monitoring operational transaction issues that have little or no value for the end customer. We call this digital management.

Shorter Lead times in Operational Processes

Cloud Processes enable online connectivity end-to-end, access to operational, tactical, and strategic information, and best-practice business rules. At the same time, resources are freed up from trivial administrative tasks and can be used to handle deviations and improvements. This, together with the Cloud Process Improvement Services, leads to shorter lead time in the business processes, often in the range of 10-90%.

The improvements are drastic due to the end-to-end capabilities in the Cloud Process that enables an on-line strategy for automatic monitoring (business activity monitoring) and oversees that the information is of sufficient quality and uninterrupted in the end-to-end business process, thus enabling a faster and monitored movement of the physical asset.


IT Improvements

Reduce Costs for IT-operations

Most IT organizations have invested heavily in building an enterprise-wide IT infrastructure and ERP functionality. The focus has been on technical implementation, carried out by the business’s own IT organization or outsourced to IT consultants.

The historical trend has been to try to reuse more and more of existing investments and resources and to limit the company’s own investment to what is unique within the company to create competitiveness. This can be seen in the evolution from mainframes to client servers, to the PC, to the browser; and from in-house developed code to standard applications. So far, most projects show a limited ability to leverage external assets and investments. This results in long lead times for implementation, unpredictably high costs, and a focus on cost reduction. In most cases, this results in the IT organization lagging behind in projects that add immediate business value and instead being forced to focus on reducing costs in managing the infrastructure.

Cloud Processes for the value network give the IT organization an opportunity to implement a strategy for seamlessly integrating all external business parties (the value network), a strategy that complements the existing ERP and IT infrastructure investment while extending the enterprise-wide business processes into the value network. In the short term, this lowers IT costs and enhances the value of existing investments because the Cloud Processes generate a clear and visible business value within a short period of time.

The Cloud Process implementation is completely different from traditional implementation. A Community Edition Cloud Process implementation consists of two main activities: Connect to Cloud and operation. The Connect to Cloud project consists of three parts: configuration of the customer-unique business rules, integration of the relevant internal systems, and the addition of unique business partners that are not already connected in eBuilder’s existing business process network. This usually takes less than 15 weeks. Then the operation of the best-practice Cloud Process starts. Payment for the operation is done on a transactional basis. ROI has been achieved in less than six months for the majority of all the projects eBuilder has implemented.

The key to this favorable ROI is the degree of reuse. eBuilder Cloud Processes for the value network reuse all the 10 main resources of the Cloud Process implemented in our Accelerator SOA technology environment. They also reuse the seamless integration of the 10 different areas and the supervision and control services that ensure availability, quality in the information content (information entropy), and technical functionality. Because many customers share the cost of developing and maintaining this generic platform, the cost to the individual user is dramatically lower than the cost of implementing such a platform on an individual basis.

eBuilder’s Cloud paradigm enables a whole new way of using IT, where IT becomes the business, and computers execute the business logic and the basic administration tasks that previously were based on human interaction. It also enables the IT organization to leverage joint infrastructure to address the challenges associated with creating efficiency in the Value Network and to participate in the realm of business development.

Take the case of the industrial manufacturing company that adds value in an overall, end-to-end value-added process. With traditional methods, it has a financially-draining and resource-draining task ahead of it in participating efficiently and effectively both inbound and outbound in the global business process. The cost of a traditional implementation of the required integrations for an industrial manufacturing company that participates in a global added-value process are prohibitive. In many cases, the cost versus the benefits cannot be justified.

Connect, for example, your existing ERP environment on a “need to collaborate” basis to eBuilder’s business process network. The business process network already contains thousands of integrations to global trading partners. eBuilder’s best-practice Cloud Processes for the value network are an effective and quickly implemented way of creating an immediate and measurable business benefit delivered by the IT organization.