The Manufacturing Industry Blog

Overall topics that are generally applicable to blog maintenance, status, etc.

It has been interesting to watch the Automotive industry and how they are dealing with the economy.  Clearly “Cash for Clunkers” provided a big boost for car dealers in July and August.  Although speaking with a friend who manages automotive lending for a large bank, she saw the majority of sales were the class 2 economy cars, and dealers were not moving a lot of high end cars or trucks with their associated higher profit margins.  Luckily for them, the government did come through with the rebate checks.  However, now business is down again and many dealers are depending on manufacturer’s cash back programs, and some even resorting to their own rebate programs.

And what about brand loyalty?  One example, my brother, a loyal customer for one of the larger automotive brands for the past two decades was going to trade in his clunker truck for a new vehicle of the same brand.  However the dealer switched the agreement at the last second – so my brother went to a different dealer and ended up with a better deal, a similar vehicle, but a completely different brand.

Is this really the way to reach the consumer?  Is a “trade-in” or rebate marketing approach going to be effective long term and can this kind of approach be sustained?  Innovative companies are taking advantage of cross-media communications, and carefully engineering all the touch points with their clients – from email to personalized web-sites to direct mail, and even personalized videos.   They are not only effecting brand loyalty, but also opening new opportunities for after market sales and cross-selling.  Please comment and share with us if you have any ideas around this and how you are taking advantage of your customer data to improve your business.

Click here for a short video about our perspective on communication engineering.

Last month I wrote about some considerations for document and content security.    I learned about another consideration in security that we have been working on with a provider of energy services.  They face stringent security requirements especially since they are involved with Nuclear Power stations.   In order to keep costs in check they rely on contractors to perform maintenance and keep the stations running.  

The time and cost to bring on new contractors is significant.  They must perform a full background check on each contractor.   This process involves a lot of forms that are first filled out by applicants and then forwarded to multiple agencies.   It takes several days to complete this security clearance and during this time the contractors are paid to sit and wait.  Additionally the risk exists that if they are short staffed, the delay to the scheduled maintenance could result in excessive costs and the loss of revenue.   The estimated cost to run a power station is around $1 Million per day and the revenue lost when the power station is not running is in excess of $1 Million per day, so having staff available quickly is critical to a successful and profitable operation.

This is where business process re-engineering comes into play.   By providing digitization technology, and streamlining the workflow, they will be able to significantly reduce the actual time to complete the security clearances, including a reduction in staff time required, and have their contractors working more quickly. 

Are there any other examples where new security measures are requiring more complex and time consuming processes that you can share?

As manufacturers continue to make investments overseas and integrate a global supply chain, intellectual property theft will remain a common issue.  A recent article in the Economist highlights the significant increase in lawsuits in China for IP infringement.  Over 15,000 lawsuits, up over 200% since 2003, are now active.   China has made investments to improve the infrastructure within the Chinese judiciary system to handle this new surge in activity.  However, the main beneficiary in this splurge continues to be Chinese lawyers, allowing a significant potential for continued corruption.

The risks of intellectual property theft and counterfeiting have not stopped manufacturers from flocking to China in order to gain the benefits of the workforce and its low wages.  As organizations continue to make these decisions, they will be forced to mitigate the IP theft risk.  The Wall Street Journal suggests that the starting point to protecting yourself against the loss of intellectual property is to educate your employees.  Intellectual property rules can be difficult to comprehend and the proper training and a well established IP security process can alleviate many issues.

Unfortunately, most organizations do not have a trade secret management system in place that governs how employees handle IP information.  In order to reduce the risk of intellectual property infringement companies will need to start effectively implementing such processes.  Check out Xerox’ Thought Leader on Security – Dave Drab, CISSP.  The whitepaper Enterprise Security – Tightening Your Grip on Trade Secrets outlines managing trade secrets for legal security.  By applying the discipline of counterintelligence to their security model, manufacturers can more effective in managing trade secrets across the globe.

As effective product launches are critical to a company’s continued success, I have gleaned some best practice ideas from across the Internet in order to highlight how manufacturers improve their new product development process. Here are some highlights:

1. Making a senior person responsible for the product introduction process.
2. Value-stream mapping exercise for product development – identifies market trends, the long- and short-term needs of customers, and all other variables that help define the marketplace, including value to shareholders.
3. Improve the relationship between the engineer and the customers. Frequently, engineers are four to five steps removed from the customer.  Put them on the front lines, making customer visits to gauge customers’ wants and needs.
4. Develop partnerships that result in win-win situations.  Small customers, inventors or entrepreneurs have ideas for new products or improvements to existing products.  Where it makes sense purchase the rights to an idea or make other financial arrangements to obtain access.

Happy product planning!

As the global market place continues to develop, manufacturers are working to address the multitude of issues in the aftermath of world wide new product development launches.  Companies continue to struggle with the challenges of identifying the right product for the right market, mitigating risk from supplier and logistical failure, and their ability to deliver new products on time.  Recent studies from Booz Allen Hamilton and ARC Advisory Group find that up to 45% of product launches are late and that additional funding does not solve the problem.

According to AMR Research, successful organizations like Toyota, Eaton, Coca-cola and Caterpillar lead other manufacturers in their ability to get products to market sooner.  These companies spend more time addressing the beginning phases of product development that include requirements gathering for strategic fit, processes to improve time to launch and operational excellence.

Although many applications have been implemented to improve efficiencies associated with new product development launch, these systems like PLM and SCM, still cannot compensate for homework done well in the initial phases of product development.  I believe we will continue to see many less than perfect launches, see Avoiding Failure to Launch.  It will be a manufacturer’s ability to partner through the value chain from truly comprehending customer requirements on multiple levels, collaborating with suppliers, and satisfying the demand driving supply network, that will ensure future success.

I started the year reading new publications on predictions and trends in the manufacturing industry, new technologies, development of SaaS and SOA, AMR Research’s Manufacturing 2.0, Sustainability….you name it.  And then Oil hit $100 a barrel.

This could be the biggest issue affecting the manufacturing industry, above and beyond the trends and technologies.  Oil prices are already causing drastic changes in the automotive and airline industries, not to mention the burden on the chemical industry on which all industries rely.

More importantly, continued increases in oil prices will continue to shift economic power to other regions of the world, and away from the United States.  More and more manufacturers will be moving to oil rich areas of the world to help reduce costs and risk in the supply chain.

What do you think $100 Oil will do to the manufacturing industry?

Introducing the Xerox Manufacturing Industry Blog!

I am Lynette McTigue, Global Industry Marketing Manager for Manufacturing and Energy at Xerox Global Services, and I will be facilitating a discussion on current issues and trends in the manufacturing industry through this blog.  We will share perspectives on how organizations are using concepts and technologies like enterprise content management, workflow, imaging, and knowledge management for reducing costs, improving productivity and developing new markets.

Additionally, I will highlight such manufacturing-related topics as outsourcing, productivity, operational excellence, logistics and supply chain, and the role of enterprise document management.  Through collaboration discussion we can explore new ideas and topics in document and content management for manufacturing organizations around the globe.

Let’s get started!