Forever Connected

June 10, 2005
The Internet may be a recent tool within manufacturing, but it is undoubtedly one of the most, if not the most influential.

Against a raft of different computer technologies including computer-aided design, the programmable logic controller (PLC), the personal computer, and a host of other innovations beneficial to manufacturing, the Internet reigns supreme as the most significant technological innovation affecting manufacturing in the last half century.

In fact, a case could easily be made that the Internet tops even the transistor as the single most powerful technology to bring change to the ways manufacturers operate. Not since factories were first electrified more than a century ago has there been a piece of technology so sweeping and deep in its effect on how the world's plants purchase, produce, market and distribute goods.

Here's a quick tally of just a few of the ways the Internet has changed manufacturing:

First, there are the basic strides in communications that the Internet made possible. Manufacturers can instantaneously communicate with one another and with their customers, as well as with consumers. The mere launch of a company's Web site, for instance, eliminated the need for hundreds of thousands of annual reports, press releases and other information to be printed and mailed.

Internally, executives and managers now can directly communicate with employees. Outside the walls of the firm, manufacturers can place product catalogs and voluminous product data online. They also can order parts and materials online from other manufacturers or from electronic marketplaces.

Perhaps most remarkable about the Internet is its near-total ubiquity, the result of its acceptance as the global communications platform. However simple in concept the notion is, having a basic communications tool used by all manufacturing companies for data and written communications is a huge step forward. Prior to the Internet, companies connected with one another via telephone, fax, overnight package and personal meeting.

For some manufacturers, such as Dell Computer, the Internet has proven to be nothing short of transformative. The ability to take orders online for millions of computers, orchestrate their manufacturing, shipping and distribution, while changing the way industry views the manufacturing process, is revolutionary.

The Internet also has been a boon to manufacturers as a catalyst for collaboration. Companies routinely share product data and computer-aided-designs over the Internet, both internally and with other firms. Instead of holding physical meetings, companies with geographically far-flung operations and staff can hold virtual meetings over the Web.

Many manufacturers have chosen to take advantage of the online marketplace concept by establishing their own corporate intranets that allow their suppliers and customers to do business with them more easily. Now they can facilitate connections with key business partners without relinquishing control of their trading place.

Online sales continue to grow. A big benefit of the ordering of goods online is that the customer often is given the capability of tracking the shipment en route to its destination.

Another plus for the Internet as it impacts manufacturers is as a tool for mobile workers. Traveling employees can connect to headquarters from almost any remote location.

In yet another interesting twist, the Internet has played a key role in the growth of so-called "virtual companies," enabling, for instance, numerous pharmaceutical start-up firms to operate with a handful of headquarters staff. These companies focus on developing new drugs and obtain the necessary federal approval, then place the orders with contract drug manufacturers who produce and distribute their products.

Finally, the ability to send various activities to contractors offshore has been made possible by the Internet. This has allowed manufacturers to maintain close tabs on low-cost suppliers' operations even when they are an ocean, or in some cases, half a world apart.

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