The Changing Role of Information Technology in Manufacturing

T oday's manufacturing enterprise, whether it produces consumer goods or weapons systems , must often juggle a range of conflicting demands. Smaller lot sizes, increased product flexibility, higher product quality, decreased delivery time, and smaller profit margins are typical of the ambitious goals in many such organizations. Through it all, the enterprise must consistently aim for the five R's—produce the right product, with the right quality, in the right quantity, at the right price, and at the right time—and it must do more than satisfy its customers: It must delight them. These demands mean that the manufacturing enterprise must constantly evaluate its business strategy and fine-tune its processes as needed. It must be able to • leverage its core design and manufacturing com-petencies and pursue new business opportunities while outsourcing noncore activities; • implement new production strategies rapidly (mass customization, lean manufacturing, and so on); and • predict how change will affect operational constraints , such as resource availability on the shop floor. Correct and timely information is key to meeting these goals, and information technology—database management systems, enterprise resource planning systems , and simulation and computer-aided design tools—has become indispensable to most manufacturing enterprises. As Figure 1 shows, information is the lifeblood of the enterprise, and IT is central to all activities. Indeed, IT can be thought of as the great market equalizer: It is available simultaneously to companies , irrespective of their size and (generally) their location. Consequently, what technology an enterprise adopts—although important—is not as important as how that enterprise uses it. 1 This is, of course, a well-accepted notion for the business enterprise. However, the manufacturing industry has recently begun to also define success by how effectively a manufacturing enterprise selects and integrates an IT solution to realize its corporate vision. Integration is particularly challenging because the manufacturing environment is highly dynamic, and the models and data that support diverse manufacturing activities, including design, planning, simulation , and tracking differ widely in format. Nonetheless, we have seen several successful integration efforts. We have also seen how this integration is opening up a new role for IT: that of change catalyst. In one case study, Terry Manufacturing, which makes uniforms for both the US Department of Defense (DoD) and McDonald's, was able to use IT to institute shared production. In a formal agreement with the DoD and McDonald's, Terry agreed to continue to supply McDonald's while simultaneously …