Manufacturing 2.0

June 8, 2007
Manufacturers are looking beyond the buzz and discovering real business value in the latest set of IT tools.

These days, the "2.0" label carries enough buzz to power a small city, and has been applied so often and so indiscriminately that, like so many buzzwords before, it has been rendered virtually meaningless. However, underlying this overexposed 2.0 term is a set of valuable collaborative tools that leading manufacturers are using to make an impact today, as well as building their future around to build the workplace -- and the products -- of tomorrow.

Because most 2.0 tools originate in the consumer sphere, they often score high in simple usability. Many are based upon a "drag and drop" model that directly contrasts with the high learning curve and resource-intensive creation, installation, adoption and training process involved with most business software.

For instance, enterprise software giant SAP is not normally known for ranking high on the ease-of-use scale. However, vice president Doug Merritt, who manages SAP's business user groups -- itself a collaborative network of software experts -- says that the reason SAP has gotten with the 2.0 program is simple: No matter where they are applied in the company flowchart, 2.0 tools can integrate structured and unstructured data into a cohesive, functional whole.

"Tools like widgets, wikis, blogs and social networking are good for the whole organization," Merritt observes. "Whether you're an information worker or on the plant floor, these tools can help you access information, make better decisions and get work done more effectively."

Why Are Companies Adopting 2.0 Technology?

  • Business efficiency improvement: 74%
  • Competitive pressure to do so: 64%
  • Specific problem solution: 53%
  • Partner recommendation: 53%
  • Employee request: 45%
  • Bundled services: 25%

Source: Forrester Research

Analysts are finding that companies are using these technologies for everything from customer-facing blogs and product podcasts to internal projects and knowledge sharing. Just over half the executives polled in a recent McKinsey & Co. survey say they use one or more 2.0 technologies for knowledge management, and just under half use these tools for designing and developing new products.

In short, many forward-thinking managers have already integrated 2.0 tools both to solve present business problems and also to prepare their workplaces to meet the expectations and, more importantly, best utilize the skills of next-generation employees.

Mashups: Just Add Data

A good place to start in laying out the 2.0 landscape is the mashup, a combination of data from two sources that is already experiencing widespread adoption in the enterprise. There are two basic types -- visual and non-visual -- and the type of mashup depends upon the business needs it seeks to solve. For instance, in the wake of hurricanes Katrina and Rita in 2005, energy giant BP mashed up Microsoft Corp.'s Virtual Earth with up-to-the-minute weather data (as well as historical storm patterns), pipeline information and even RSS feeds of traffic reports to create a "hurricane management system" that enabled a data-rich forecasting tool for logistics managers to use to allocate resources in case of another emergency.

See a mashup of the 2006 IW Best Plants winners using Google maps.
Hundreds of other businesses, including Detroit's Big Three automakers, are already using Virtual Earth, Yahoo Maps and Google Earth as global data fields upon which to superimpose store or franchise locations, making it easy and interactive for customers to find their products.

Anthony D. Williams, co-author of Wikinomics (Portfolio, 2006), says that the opportunity for harnessing the power of a tool like a mashup makes them well worth even the slight resources involved in their creation.

"You can involve people who aren't necessarily programmers, but who are business process experts who can get involved in mashing together a collection of different enterprise software services and solutions to form new forms of functionality or new applications," he says.

For instance, as business drivers arise, users can generate new applications on an as-needed basis. Rather than submitting a request to IT, empowered employees simply combine data streams and software components to generate the tools they need. A business about to start a large logistical operation -- such as a restocking operation across multiple warehouses in different regions -- could assemble a custom mashup application to check for extreme weather, traffic and other hindrances to decide whether to proceed, and if so, when and how best to go about it.

For companies not wanting to get their hands dirty mashing data streams, these tools are readily available as made-to-order or optimized for integration from some of the biggest names in software today (SAP, IBM Corp., to companies riding the 2.0 wave to market success (JackBe,

Technology manufacturer Siemens worked with on-demand application provider Nexaweb to build a Web-based, sales-oriented mashup that drastically simplified a 300-screen interface for its sales force automation process. Rearden Commerce's visual mashup solutions are used at Pfizer Inc. and GlaxoSmithKline to perform tasks ranging from package shipping to arranging employee travel, where the data streams can be merged with accounting and calendar programs to enable an entirely new level of business process automation.

Collaborative Everything

The word "wiki" comes from the Hawaiian word for quick, but in today's tech terms, it denotes a tool used for the collective publication of information. These days, companies use wikis to fulfill everything from project management to setting meeting times and agendas, creating (and disseminating) corporate policies and strategies and even tracking industry news.

See Also

Defining Web 2.0

Web 2.0 Adoption

Outside of the high-tech world, wikis are not usually generated internally, but as with mashups there are a number of companies stepping into the breach. Some (Atlassian, Socialtext) are commercial offerings; others (Twiki and Tikiwiki are two examples) are the products of open-source projects.

IBM is building a whole suite of 2.0 tools, including wikis and blogs, into its next generation of software applications, and Windows Vista and Google Docs both give users the ability to collaboratively publish in familiar formats.

Wikis can be paired up with the information distribution technology labeled RSS to automate the delivery of crucial information to the employees that need it most. For instance, an RSS feed can notify an R&D team that one of its members has posted a new entry on the project wiki. Furthermore, by shifting the business dialogue into the collaborative space, wikis themselves can free executives and project managers from the overwhelming tide of (frequently irrelevant) e-mail communication that permeates today's information workspace.

Best of all, wikis can create a sense of cohesion amongst far-flung staff. When management at Honeywell International Inc.'s research labs wanted to keep the momentum generated by its annual tech symposium going on a year-round basis, management turned to an internally generated wiki. "We wanted to make a collaborative event happen every day, but virtually," says research engineer Soumitri Kolavennu.

He notes that the consensus among the research community is that the wiki is a useful tool, but that timetables are tight, and that publishing to the wiki doesn't take precedence over what he was hired to do -- namely, research. However, Kolavennu points out that putting team members on a publishing deadline schedule could create a 2.0 Catch-22. "Right now, people post when they're inspired to post -- if you make it mandatory, you run the risk of turning it into a burden."

Getting Closer To Your Markets

Like wikis and mashups, podcasts, weblogs (blogs) and other social networking tools are coming into wider use on an internal and external basis. These tools can serve multiple functions, from customer outreach to employee training, and are often paired with other collaborative tools into a feature set that changes the way employees do business.

At Motorola Inc., for instance, researchers are encouraged to follow Ernest Hemingway's advice ("Write what you know") and the numbers -- 2,600 employee blogs corporatewide -- speak for themselves. Some consumer products marketing managers use blogs as informal focus groups, and many R&D departments are paying close attention to "hardware hacking" sites like to get new ideas for product design and use. Social networks are used by savvy marketers trying to penetrate younger markets, and these same sites (, are already in widespread use for the recruiting of and informal background checking on potential employees.

The Mindless Mob?

The fundamental idea behind all of these 2.0 tools is information sharing, which aptly describes collective intelligence, or crowdsourcing. As data transmission prices go down and transportation costs go up, the fact that bandwidth is now much cheaper than fuel means that people worldwide, whether they are employees or not, can communicate near-instantaneously -- and the payoffs can be huge.

The idea behind crowdsourcing is the opening up of intellectual property and business processes in order to harness the untapped potential of the world outside the castle walls. Companies that have become early adopters -- such as Procter & Gamble Co., IBM and Boeing Co. -- are reaping benefits from it that, in turn, produce competitive pressures that drive wider adoption of collaboration.

In the past decade, Big Pharma has established worldwide connections to solve specific genetic research problems through collaborations like the SNP Consortium and the Human Genome Project, as well as research matchmaking services like Innocentive. All of these moves involve rethinking of the strategic plan behind keeping a stranglehold on intellectual property. Instead, with today's global connectivity, research and innovation has become a two-way street.
Research directors at P&G use sources such as NineSigma or to reap the benefits of open innovation.

"They can post problems on Innocentive and get solutions that they've not thought of already," points out Wikinomics' Williams. "Companies can also use these online marketplaces to license out IP that they've developed internally, but that would have more use in other industries."

To give some idea of the scope and ambition of an early adopter, P&G has set the ambitious target of obtaining 50% of new innovation from outside the company by 2010, according to Wikinomics. Additionally, Phil Stern, CEO of online technology transfer marketplace, estimates that 80% to 90% of Fortune 500 companies have personnel actively listing and scouting new research and technologies.

As a final point, consider the shift in fortunes at Goldcorp Inc., a Canadian company from one of the oldest industries on earth -- gold mining -- that opened up its mining data to online prospectors, thereby creating the world's first "virtual gold rush" and transforming itself from a net worth of $100 million to its present status as a multibillion-dollar mining powerhouse.

If the new day of 2.0 is dawning deep in the Ontario hills, what might this bright future hold for your business?

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