What do you do when climbing costs and a rising competitive environment clearly dictate the need for re-engineering your order-to-delivery processes?
Automation overhaul may be necessary, but the cost seems prohibitive in terms of money, manpower and ramp-up time.
And then there's the whole issue of getting your personnel on board with technological advances that will clearly drive growth and profit -- an important consideration if you want committed designers and engineers, as opposed to merely compliant ones.
Cook Specialty, a manufacturer of precision metal parts for several industries as well as custom-engineered medical instruments, faced that dilemma, as noted in an article titled "Re-engineering the Small Factory" in Inc. Technology.
But Cook President Tom Panzella knew that declining hardware and software costs made digital solutions a real option for his business.
He also knew that technology would add an edge to the agility that Cook possessed as a small business, giving the company a competitive advantage over larger, more cumbersome manufacturers.
Panzella made the decision to invest in computer-integrated manufacturing (CIM), installing a 30-computer network throughout the plant.
Were money, time and effort spent in getting the hardware installed, getting the software up and running, and getting everyone trained on the new system? Yes. But a powerful synergy ensued as Cook's engineers and designers began to use the new system.
The advantages, as profiled in Inc. Technology, included the following:
- The ability to exchange parts-design information with customers, creating a valuable give-and-take dynamic (Cook assisted Welch Alvin create a new line of laryngoscopes).
- Automatic specifications input into the computer-aided manufacturing (CAM) software, which in turn instructed the production machines what and how to build.
- Instant communication among all members of the manufacturing cell working on a particular project.
- Significant reduction in the need for shop-floor communication, as the technology promoted collective updates visible to any employee at any time.
- Collaboration that allowed each team member to feel unique ownership in the manufacturing process.
- Ongoing communication with customers about key issues as the parts were manufactured.
The Power of Technology
The lesson here? In the highly competitive arena of U.S. manufacturing, technology can turbocharge growth in ways that were undreamed-of a decade ago.
Business leaders who can get ideas, information and feedback flowing from customer to producer and back through automated systems give a whole new meaning to the phrase "making the buyer happy."
Such cutting-edge systems can streamline production, enhance communication, increase innovation, share best practices, and keep every stakeholder on the same page through every phase of design and manufacturing.
Key Questions to Ask
One cautionary note, however. Large organizations can and do waste billions of dollars on IT. Smaller companies don't have the revenue to absorb expensive technology mistakes.
Therefore, it is imperative that top executives in smaller organizations ask a series of critical questions before considering an IT overhaul -- no matter how alluring the prospect. They are:
- Is this technology aligned with our overall growth strategy?
- If not, what must we do to get it aligned?
- What will the technology do, specifically, to improve our manufacturing processes?
- What unexpected downside could we encounter in overhauling our IT?
- How can we prepare for and minimize that risk?
- What training do we need to provide to ensure that our employees are comfortable with the technology?
- Would a pilot program be a viable option, or should we proceed with the upgrade across the board?
- What will we see happening that will tell us the new technology is working?
- What formal and informal metrics do we need to put in place to measure the success of the overhaul?
As shown in the example with Cook Specialty above, automation can open the door to exciting new opportunities for growth.
All it takes is a forward-thinking executive team, a clear understanding of how the new systems will enhance the company's bottom line, and a willingness to forge ahead into uncharted digital territory.
Sally Mounts, Psy.D., is president of Auctus Consulting Group, a management consulting firm in Washington, Pa.