Process Management for Manufacturing

Businesses want to get their products to the buyer quickly. Manufacturing process management electronically bridges product design and production and allows complex products to go to market faster. Manufacturing processes are complex as are product designs and the schedules that control production. Information systems play a key role in tracking and monitoring activity as well as in planning and coordinating. The manufacturing and production of complex products falls into three phases. The first phase is "what" is being manufactured (or the design phase), second "how" it is being manufactured (or the manufacturing process management phase) and the inventory control (or scheduling phase) leads to the third phase of "when" the product will be manufactured. Information systems for the 'what' and 'when' phases have been used for a long time and are mature. It is only recently that information systems for the 'how' phase have come into play allowing electronic collaboration across the product development lifecycle. Earlier information systems supported product design with tools like CAD (computer aided design) and PDM (product data management). Now, digital manufacturing (which is another name for manufacturing process management) offers similar tools for manufacturing.

Keywords Bill of Materials; Digital Manufacturing; Lean Manufacturing; Manufacturing Process Management (MPM); Manufacturing Processes; Process Management; Product Data Management (PDM); Product Lifecycle Management; Production Process Planning

Operations & Information Systems: Process Management for Manufacturing

Overview

Manufacturing is an important part of the economy and the demand for manufactured goods is still strong. According to the Economic Policy Institute (Bivens, 2004) domestic U.S. manufacturers account for 76.5% of manufacturing demand and face a growing trade deficit. This fact requires manufacturers to continue to look for ways to be more productive.

On a daily basis, organizations must manage the processes that run a business. This is called process management. Golann (2006, p. 372) used the following definition of process management: "the behaviors, methods and practices for managing internal processes and actions." Operational business processes are those that are performed by organizations in the context of their day-to-day operations, as opposed to strategic decision-making processes which are performed by the top-level management of an organization. No place is this more applicable than in a manufacturing environment. Manufacturers acquire and process raw materials through a specific set of operations to yield a finished product that is either complete on its own or a sub-assembled component into another product.

Benefits of Process Management

Firms can make more money if they respond to what the market wants. Golann (2006) suggested that firms benefit from process management and that it can lead to benefits in the market called "market oriented responsiveness." This responsiveness can result in better and more innovative products as well as better customer service and support. Process management can include management of internal processes as well as external ones that affect a product. Golann (p.369) saw the benefits of process management as improving "performance and responsiveness to changing markets. These benefits are a result of a firm putting "systems, procedures and performance measures" in place.

There are other benefits that firms receive from process management including the ability to develop and deliver complex products, reduced time to market and lower product cost. Fortin (2003) linked manufacturing process management to the ability of manufacturers to deliver complex products. Sly (2004) described the benefits of manufacturing process management as improving information quality and reducing time to market by helping to electronically link product design to production. Michel (2005) quoted Gartner as defining manufacturing process management as "planning and enabling the timely manufacture of products at the lowest cost and quality needed to achieve profit and business growth." Manufacturing process management can provide ways to identify and act upon areas where growth and productivity are possible.

Phases of Product Manufacturing

Manufacturing Process Management is a field that allows technology to support a product's full lifecycle from design and engineering through production. Fortin (2003) and Sly (2004) both agreed on three phases needed to bring today's complex products to market. The first phase is product design where the manufacturer defines 'what' will be done. The second phase is manufacturing process management where the manufacturer defines how products will be manufactured and assembled. The third phase is the inventory schedule where the manufacturer has to come up with a production schedule and determine when these design and process management activities will take place.

The Characteristics of Information in Manufacturing

Correct and timely information is critical to the manufacturing process. There are many different types of information that are managed in manufacturing. The information type and flow are governed by the product lifecycle. The product lifecycle tracks a product from the design of the product through production, sales, service, use and ultimate disposal. The ability to share information with others in the supply chain is critical to the ability of the manufacturer to improve productivity and to increase speed to market. Information can range from specifications about the product's size or composition to compatibility with other products.

Complexity of Information & Process Management

There are many reasons information management and process management are complex in manufacturing. First, there is a lot of information in various formats available in different systems that may or may not be compatible. Second, access to the information may not be seamless or easily integrated among systems. In addition, the manufacture of products, even mature products, is not stagnant. There are constant changes to production based on any number of variables; from a design change to customer requests to a variation in materials. The ability to respond to changes quickly is another expectation that manufacturers must meet. Government regulations may place another burden on manufacturers to quickly adapt new processes. For example, the federal government may require car manufacturers to make modifications to their vehicles in order to comply with new clean air regulations. The manufacturers have to create new designs, conduct testing and retool their production environment to adhere to these regulations while still producing vehicles daily.

Information Needed by Firms

What information does a firm need? Golann (2006) discussed the information needs of firms related to the marketplace and characterizes information needs into three areas:

• Generating market intelligence
• Disseminating intelligence
• Responsiveness

Firms must collect information on their competition and customers, this is called market intelligence. This information must be spread throughout the organization and create activity based on market intelligence. This is called disseminating intelligence and responding to market intelligence. The ability to seamlessly access information and integrate it into the manufacturing process using technology is valuable to companies who want to grow and capitalize on the changes in the market and in customers.

Processes that must be Managed

The processes that must be managed fall into three categories: outside-in, inside-out and spanning (Golann, 2006). Outside-in processes emphasize gathering outside information about customers, channels and markets such as market research, customer feedback or processes for ordering products. Inside-out processes collect information on how to create more value through manufacturing, financial controls, technology development and human resources. Spanning processes link internal value creation to customers and markets and ultimately influence long term strategy. Spanning processes cover both inside and outside processes such as order fulfillment, manufacturing processes, order delivery, customer service and product development.

Managing Manufacturing Processes

The management of manufacturing processes is dependent upon the manager's ability to consistently improve on methods of strategy and decision-making. Traditionally, manufacturing managers excelled according to how well they came to know processes and how adept they were at adjusting processes to fit production needs. The introduction of information technology into the management of manufacturing allowed managers to balance their ability to intuitively make changes and decisions that compare to historical data and projected information. The growth of competition and the application of best practices have increased the urgency for manufacturers to fine tune the methods of managing processes.

Improving Value for the Customer

What can help firms focus and eliminate waste to improve value to customers? Parry and Turner (2006) described visual process management tools as having the benefit of improving communication and realizing the goals of lean manufacturing. Lean manufacturing is based on the concept of eliminating waste to improve value to customers. There are five principles of lean manufacturing (Parry & Turner, 2006):

1. Specify value as defined by the customer.
2. Identify the core set of actions required to produce the product — called the value stream.
3. Align the core processes along a critical path — called making the value flow.
4. Customers should pull (request) the product as needed meaning products are made just in time and inventory costs are reduced.
5. Continuously improve product and processes pursuing perfection.

Lean Manufacturing Processes

Lean principles make sure that companies are not wasting materials, labor or time on processes that are not efficient and on products the customer does not want. Shukla (2006) found that getting the best results from lean principles came from a combination of process management and people management. People management ensures that the most expensive resource (labor) that a company invests in are trained and deployed effectively. The combination works because people aren't efficient when required to use poor processes and processes that are optimized still depend on effective people resources to provide value to the company.

Information technology can be a powerful tool in creating lean manufacturing processes. Astall (2006) found that the goal of a lean enterprise lends itself to business process management automation. He contrasted the former view of manufacturing, which does not include anything but manufacturing, with the current view that there are value added activities that aren't specifically manufacturing, but impact manufacturing. As a result, manufacturers can find value in information technology to manage, analyze and improve processes instead of viewing the investment as wasteful.

Conflicts between Lean Manufacturing & Traditional IT Products

Astall noted that there is an inherent conflict between lean manufacturing and traditional information technology products such as ERP. For example, ERP supports push manufacturing while lean suggests pull manufacturing. Pull manufacturing is allowing the customer request to dictate manufacturing while push manufacturing 'pushes' product into the market. Traditional ERP supports a centralized enterprise view with knowledge managed by a few. Lean supports decentralization with information available to as many as possible. For process management, lean concentrates on how to collect and put together all information about creating the product and how to keep track of the information about that product that changes along the way. The ideal method of keeping track of information is through an integrated information technology system that cuts across the enterprise including manufacturing, but going beyond. Despite the conflicts between IT and lean, Astall felt they could coexist and bring productivity to all parts of an organization.

Importance of IT Users & Business Users

Visual process management software allows for the visual representation of processes and facilitates communication between IT users and process management users ("BPM," 2007). IT users are the designers of information systems and process management users are the ones who understand the business functions and processes that need to be managed. Both IT and business users are important if process management is to work well in organizations. The benefits of letting IT and business users visualize processes is best seen when the need for process management is across multiple applications. In this way, the team of business and IT users can identify where problems may migrate from one area to another. From a management point of view, it is most important to understand what each type of user knows best. Business users tend to understand functionality and the importance of processes. IT users tend to understand data integrity, security and mission critical processes and applications.

How to Improve Firm Performance

How do firms improve their performance? Sharing information among different managers is the key. Hayashi (2004) observed various organizational teams including those that were responsible for process management and found that teams that shared information were more likely to exhibit better performance. Hayashi also found that the teams that are diverse tend to share information more and to perform better. Managers of teams who must make decisions about process management and process management tools may want to keep this information in mind to create teams where individuals with different functional responsibilities and backgrounds work together. Plesums (2006) agreed with Hayashi that as many people as possible should be a part of the business process management and modification process. Plesums even suggested that external parties with knowledge of regulatory requirements may be needed. Plesums states that IT specialists who try to document processes without sufficient user input are "doomed to failure". Plesums also cautions businesses against trying to get consultants to fill the void. While consultants might have general industry knowledge and knowledge of products, they can't replace what internal users know.

The Two Parts of the Business Process

Plesums (2006) stated that there are two parts to business processes: What needs to be done and how to do it. So the information that is accessed in completing a process can be quite detailed and must be considered when improving and managing processes. For example, Plesums described the simple activity of placing an order. The information that must be accessed includes querying the customer database to see if the customer is an existing customer. If the customer is new, then specific information must be captured matching the format of the customer database. If the customer has contact with several people in the organization (e.g., sales, service, account management), then the information captured may vary based on the relationship or customer type. Next, all of the information about the order must be validated including a real product, a valid product identification number, and a valid quantity. Plesums explored sample real life scenarios like this one to underscore the fact that even if we know 'what' to do, if we haven't considered how it is done, we miss an entire level of complexity of information that needs to be captured for accurate processes. So in order to manage, monitor or modify a process, an accurate view of the process steps must be available. Plesums also suggested making sure that all active users and managers be involved in the business process management process to ensure that revisions of the processes aren't necessary because someone was left out. When selecting business process management tools it is important that the tools allow for changes as often as changes realistically occur in your environment (Plesums, 2006).

Viewpoint

Information Systems that Support Process Management in Manufacturing

There are many types of systems that support process management in manufacturing. Cleaveland (2006) described digital manufacturing as manufacturing process management (MPM). Cleaveland defines manufacturing process management as a subset of product lifecycle management. As with most functional applications of information technology, manufacturing has seen various subsets of its processes automated as information technology has become available and has improved. Initial efforts did not take into account the entire enterprise view of manufacturing. As a result, manufacturers (like their counterparts in healthcare and other industries) have had to piece together disparate systems that are only a part of the puzzle. Only recently have companies been able to realize the benefits of integrated systems that span across the functions of their organizations. Many companies still have separate information systems to control, manage and automate various parts of manufacturing process management.

Visual Product Representation

As stated before, visual representation of the process has been extremely effective. Fortin (2003) noted that in the design phase, product engineers are able to create renderings of a product in three dimensional views. This brings the product to life allowing engineers to discover and set the design specifications, sizes, tolerances and product characteristics. From this information comes the Bill of Materials (BOM) which guides manufacturing by indicating all of the component parts that make up the product. However, Fortin described the bill of materials as taking at least two forms: a product engineering version and a manufacturing engineering version. Astall (2006) described the bill of materials as the route the product takes and the documentation to support making that product. The product engineering (eBOM — engineering Bill of Materials) version is used to design and envision all sorts of product innovation while the bill of materials for manufacturing (mBOM) has one goal — to make sure the product can be made to specifications. The purpose for computerizing the bill of materials is similar to most reasons for automating processes with information systems — reduced complexity and errors and increased efficiency. A single product can be made up of many parts and subcomponents. These subcomponents and parts may be provided by various suppliers. The ability to track part numbers and their source in a product is a natural application for computerization. Information systems can map the bill of materials for this purpose. Why would someone care about all the tiny components in a bigger product? If there is a catastrophic product failure, the manufacturer may isolate the failure to a particular part. If the part can be traced to the supplier, additional investigation can determine the actual source of the problem and whether or not it can be fixed with changes from that supplier or by switching suppliers.

Information System Parts for the Manufacturing Process

According to Cleaveland, there are multiple information system parts to manufacturing process management. These include CAPE — computer aided production engineering and CAPP — computer aided process planning, among others. Other systems could include MES applications that create a production plan from work orders while ERP systems are comprehensive systems that track financials, inventory, distribution and customer information. Sly (2004) suggested that all of this production information feeds into enterprise applications such as MES (Manufacturing Execution Systems which provide for control of manufacturing such as shop floor scheduling and labor reporting), MRP (Material Requirements Planning which focus on controlling the ordering and use of materials in products) and ERP (Enterprise Requirements Planning which helps you account for everything that goes on in your enterprise). The ability to perform these applications automatically is a large step forward for manufacturers and a huge improvement in manufacturing workflow. It is the difference between gathering data in as simple a system as a spreadsheet and then manually inputting it into a formal application. Computerized manufacturing process management systems allow for the seamless transit of information between applications, can reduce errors, increase speed and allow more complex modeling of what-if scenarios (Sly, 2004).

Manufacturing Process Management Software

Michel (2005) described manufacturing process management software as covering two specific functions. First, MPM software manages data for complex manufacturing processes including multi-step processes. Second, MPM software validates whether or not the processes are effective. Using software to manage manufacturing processes can aid in easing complexity, managing complexity and making adjustments in a complex environment. Michel called the benefits of MPM software as improvements in cost and time savings. The future for MPM software is limitless. An emerging MPM software function includes a program of plant automation.

One problem with managing software that manages processes is the high failure rate. The sources of failure tend to be either the growing pains of being an early adopter or that the systems are not meeting expectations. CIO Insight (2007) suggested that chief information officers will continue to force process management software, systems and services onto users and that the failure rate will increase. CIO Insight cites 21% of surveyed companies as having deployed business process management suites while 19% are pilot testing them; 27% are in the evaluation process and 32% don't even have it on their radar screens.

Sometimes firms can get benefits from process management software that does not completely address all of its problems. Schwartz (2006) presented a case study of how business process management software is used in anti-terror technology that must be evaluated by the Institute for Defense Analysis (IDA). The benefit of business process management software for IDA was to free up the time of specialists who tracked activity on spreadsheets instead of through automated systems. IDA also reduced the number of people engaged in tracking activity. The software also helped to model processes that discover where the processes needed modification because of problems tracking the number and type of steps in a process. Some problems could not be seen because IDA did not have the ability to manually model processes. These findings agree with CIO Insight's that business process management systems may not yet be completely suited for the problems for which they are needed.

Goals of Process Management in Manufacturing

The goals of process management in manufacturing are: improve productivity and output of the process; provide adequate and accurate information about the product and respond quickly and efficiently to requests. Product Lifecycle Management is defined as everything about a product from a business, operational and technical perspective; used in all functional areas (Cleaveland, 2006). So, while it would appear that the major goals of process management in manufacturing are to improve the productivity and output of the processes, there is also a specific informational need to make adequate and accurate information available for any functional, organizational purpose. Interestingly enough, this could also include functional purposes external to the organization since manufacturers may also need to engage in co-opetition in a global environment to cooperate with others who may in some instances be competitors. So while the focus of manufacturing processes has attempted to meet the needs of manufacturing and production personnel; sales, customer service and other professionals have a need for manufacturing information and need the ability to integrate their information into the complete record about a product.

Golann (2006) found three improvements resulting from manufacturing process management. The first benefit is that it helps manufacturers concentrate on the activities that will provide the greatest benefit in the marketplace, thus managing limited resources effectively. The second important improvement is better internal communication and coordination which increases the speed to market. Third, customer service problems and product failures are reduced because of improved product quality and performance. Astall (2006) stated that the importance of optimizing processes is to achieve the goal of speed. Companies need to be able to "respond quickly and efficiently to any request" and processes that don't work well or that are "restrictive" interfere with an organization's ability to be responsive.

Terms & Concepts

Bill of Materials: List of all raw materials, parts and subassemblies that make up a product.

Digital Manufacturing: Another name for manufacturing process management.

Process Management: Control of business processes by planning, monitoring, coordinating and controlling factors that affect process performance.

Product Data Management (PDM): Software used to control the data for and about products.

Product Lifecycle Management (PLM): A process that manages the entire life of the product from concept and design, to production and assembly, to distribution and usage through customer service and eventually the discard or disposal of the product.

Manufacturing Process Management (MPM): Collection of technology and methods used to manufacture products.

Lean Manufacturing: A philosophy of process management that emphasizes eliminating waste and increasing value.

Astall, C. (2006, April). Lean manufacturing and IT: No oxymoron. Manufacturers' Monthly, 20-20. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=20809444&site=ehost-live

Bivens, J. (2004). Shifting blame for manufacturing job loss: Effect of rising trade deficit shouldn't be ignored. Economic Policy Institute. Retrieved August 4, 2007 from http://www.epinet.org/briefingpapers/149/bp149.pdf

Bosch-Mauchand, M., Belkadi, F., Bricogne, M., & Eynard, B. (2013). Knowledge-based assessment of manufacturing process performance: integration of product lifecycle management and value-chain simulation approaches. International Journal of Computer Integrated Manufacturing, 26, 453-473. Retrieved October 31, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=87736369&site=ehost-live

BPM: IT and business users should partner. (2007). KM World, 16, 11-11. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=3620040&site=ehost-live

Business process management services and software will frustrate users. (2007). CIO Insight, 71-71. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=23336237&site=ehost-live

Cleaverland, P. (2006). Building a better manufacturing future. Product Design & Development, 61, 8-9. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21984500&site=ehost-live

Evangelos L., P., Christos V., F., & Dimitrios P., K. (2011). Core process management practices, quality tools and quality improvement in ISO 9001 certified manufacturing companies. Business Process Management Journal, 17, 437-460. Retrieved October 31, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=61890900&site=ehost-live

Fortin, C. (2003). Manufacturing process management — A cornerstone to achieving a collaborative and concurrent product life-cycle management strategy. Business Briefing: Global Automotive Manufacturing and Technology, 1-3.

Golann, B. (2006). Achieving growth and responsiveness: Process management and market orientation in small firms. Journal of Small Business Management, 44, 369-385. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21153629&site=ehost-live

Hayashi, A. M. (2004). Building better teams. MIT Sloan Management Review, 45, 5-5. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=12020762&site=ehost-live

Michel, R. (2005). Next on the horizon: the bill of process. Manufacturing Business Technology, 23, 30-30. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16372695&site=ehost-live

Ngai, E., Chau, D. K., Poon, J. L., & To, C. M. (2013). Energy and utility management maturity model for sustainable manufacturing process. International Journal of Production Economics, 146, 453-464.Retrieved October 31, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=91600565&site=ehost-live

Parry, G. C. & Turner, C. E. (2006). Application of lean visual process management tools. Production Planning & Control, 17, 77-86. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19451349&site=ehost-live

Plesums, C. (2006). Defining the business process for workflow or BPM engines. AIIM E-DOC, 20, 30-33. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=20658388&site=ehost-live

Schwartz, E. (2006). Evaluating anti-terror technology. InfoWorld, 28, 32-32. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19885394&site=ehost-live

Shukla, A. (2006). Proactive people management one key to lean success. Plant Engineering, 60, 23-24. Retrieved May 18, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21658434&site=ehost-live

Sly Ph.D., D. (2004). Manufacturing process management. Technology Trends in PLM by Collaborative Product Development Associates. Retrieved July 20, 2007, from http://www.proplanner.net/Product/Whitepapers/mpm.slycpd%5ftt040601.pdf

Suggested Reading

Chang, J.F. (2005). Business process management systems: Strategy and implementation. Boca Raton, FL: Auerbach Publications.

Stark, J. (2006). 10 critical PLM facts every executive should know. [White paper]. Available from SofTech. http://www.softech.com/whitepapers/pdfs/10%20Critical%20PLM%20Facts.pdf

Stark, J. (2006). Top ten PLM pitfalls to avoid. [White Paper]. Available from SofTech. http://www.softech.com/whitepapers/pdfs/Top%2010%20PLM%20Pitfalls%20To%20Avoid%20v2.pdf