It’s EDI all over again

I attended a seminar on e-manufacturing last week, and the echoes of electronic data interchange (EDI) were deafening. One of the speakers said rather hopefully, “We’ve learned our lessons from EDI.”

What lessons have we learned? None that I can see. There are still many competing standards, as there were with EDI, so that processors and moldmakers with customers in multiple markets will likely need to interface in different formats in various markets. Many smaller suppliers will not implement enterprise management software in their businesses, so as with EDI, the electronic exchange will still become a transfer of paper at some point in the chain. And like EDI, e-manufacturing requires a significant investment of capital for the infrastructure.

Most importantly, like EDI, key customers are insisting on the implementation of e-manufacturing, so all negatives aside, it will happen.

Darren Meister, of the Queen’s University School of Business, was involved with a project called Connectedness in Manufacturing. It included a survey of small and mid-size firms in Canada, gathering information about their experiences with e-manufacturing.

“At a strategic level, e-manufacturing makes sense. The problems crop up at the operational level, usually in high-profile areas of the company,” says Meister.

He found seven common concerns that spanned all industries: difficult to get buy-in; reactive implementation; customer-specific implementations; security and intellectual property; reliability; process integrity; resource scarcity.

Not planning equals bad planning

Reactive implementation, says Meister, is a sign of bad planning. “E-manufacturing is going to happen, so make sure your first experience is not with a major account in a crisis situation.”

E-manufacturing typically starts with the exchange of specific ordering information with a particular company. From there, transactions expand to include manufacturing and design information. Then companies typically extend the functionality to other customers, explains Meister.

When a company reaches this level it is usually no longer efficient to be using the specific, idiosyncratic systems that have evolved for the “point-to-point” exchange of data (Figure 1). This is the time for external neutral formats, or standards, to facilitate the tangle of communications. This arrangement is commonly referred to as a hub-and-spoke model (Figure 2).

Meister and others at the conference advise that companies which have made the decision to proceed with e-manufacturing should avoid the evolution through a complicated point-to-point model, and simply begin with the hub-and-spoke approach.

(The conference was sponsored by MMO, www.mmo.ca)

Figure 1. The point-to-point exchange of data.