Now It Gets Interesting

When it comes to the Internet, the metalworking industry is passing from an age of great invention into an age of vast underutilization.

Article From: 5/1/2002 Modern Machine Shop, ,

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In 2002, manufacturing in general—and the metalworking and machining markets specifically—are in a remarkable period of transition.

Economically, plants and shops face unprecedented challenges to change and expand their businesses. And change they must—to better position themselves to compete, to grow and, in some cases, to survive on a broader, sometimes global playing field. But at the same time, they must do more with less. Despite these challenges, the decisions made today by manufacturers to grow their capabilities and markets will contribute directly to the speed of a recovery that many are predicting within the year.

Technologically, the opportunities are just as great as the economic challenges are severe. The tools available to this generation of manufacturing managers and professionals—the information and research opportunities, the availability of options to control, monitor and record every activity of the plant, and the tools accessible to expand and grow into new markets—far outshine those that existed only a few years ago.

To seize the opportunities this transition presents, savvy manufacturers must consider where they are in the evolution of the Internet as an effective suite of communications tools to support their businesses.

When it comes to the Internet, we are beginning to leave an age of great invention. Yet we are entering an age of vast underutilization.

As it was when CNC and CAD/CAM technologies reached similar stages of maturity, the basic tools, products and infrastructure that support and advance Internet capabilities are either fully formed or well into development. But just as it was with CNC and CAD/CAM, meaningful Internet applications will only grow at the same rate at which they are nurtured in the hands of the experienced, capable manufacturing professional.

The bottom line is this: The Internet will not turn anyone into a successful business person or machining expert. However, it can make these leaders more effective —and more prosperous—if they apply the same know-how to these tools as they have to other technologies.

Do not mistake potentially useful Internet tools for fads. That's too easy. Terms such as "application service provider" or "online marketplace" may fall away, but their core concepts may remain valid, reappearing in new contexts or under other names. Look instead to apply the right Internet tools for your business the same way a deceptively simple cutting tool might provide a level of quality that distinguishes a shop from its competitors.

This issue of the Modern Machine Shop Guide To Metalworking On The Internet aspires to inspire. We hope to introduce concepts that may be used to manufacturers' advantage during this transition, and that can help position a business for the recovery.

Enabled Tools, Enabled Shops

It should be obvious by now to manufacturing professionals that the Internet's greatest strength is its natural "open architecture." The Internet's power lies in its ability to communicate among all points of the manufacturing enterprise—the front office, the shipping dock, the customer, the supplier, the shop floor and the machine tool itself.

Capabilities that have traditionally resided in such disparate resources as shop control systems, CAD, CNC and DNC are becoming interconnected.

Just as it's always been, it all begins where the chips fly. The shop enterprise in general and the machine tool itself are gradually adopting Internet-enabled communications and documentation attributes. While the advantages of "remote" monitoring and control from this connectivity get a lot of attention (as they should), just as important are the possibilities Internet applications bring to "post-run" processes. The "on-the-fly" documentation capability of Internet-related technologies, coupled with their data access capabilities, will offer vast rewards in efficiency and quality improvement.

To put this side of the Internet's power in perspective, an analogy from a few years ago bears repeating: Think of each part and every process on the shop floor as being accompanied by a "data packet" that records and defines it—time to machine, lot association, measurement, finish, customer, date, machine and so on—and remains "logged" for retrieval, reference and review.

In the coming year, the importance of data standards and common practices (such as STEP-NC) that will promote the flow of information on the supply chain will become more pronounced. More systems developers will introduce their own approaches to data sharing and collaborative systems. Some of these approaches will be accepted, and others won't. These developments are natural in the evolution of a technology as broad and open as Internet connectivity.

For more on the extension of Internet communications channels and how standards like STEP-NC play a role, see "The Internet: Enabling Manufacturing's Future" from John Callen (Gibbs and Associates).

Security

There's nothing wrong with a healthy dose of skepticism where security of any data is concerned, especially in this Internet era. Applying scrutiny to your company's computer networks, Internet/Extranet/intranet applications, e-mail platform and databases of customer and proprietary information should be a high priority, regardless of your current Internet strategy.

However, when skepticism becomes a roadblock to progress, then it may be a problem. Finding a balance between progress and protection of your assets (assets that include your information and your clients' information) is critical. If you do not take action because of security worries, your competitors may gain experience and build relationships. Then you may find it difficult to catch them once the expanded business roles and Internet communications channels become more defined.

To find that balance, and afford a business the opportunities to grow safely, consider these elements of security:

  • Acceptance. There is no such thing as a perfectly secure system or network. And Internet security problems do not discriminate—they can affect the smallest shop all the way to the largest. Accept the fact that viruses, trojans, worms and other cyber-critters are a reality. They aren't going away for a while. You should learn to manage these threats effectively.
  • Viruses. As you and your competitors rely on e-mail and other Internet-based channels to conduct business, your business becomes more vulnerable to attack by messages that attempt to introduce unwanted and harmful computer programs. Viruses and other pieces of software sabotage can enter your computers or network via these channels and wreak havoc on your stored data, sometimes destroying everything. As a manager, learn about what virus protection (anti-virus software, firewalls and so on) is in place. Know what contingency plans have been established to protect your shop.
  • Back Up. There are back-up solutions for every size shop, plant or business. Back-up options range from incredibly inexpensive (a box of 3 ½-inch floppy disks) to thousands of dollars (tape back-up systems). Understand that a system's effectiveness will not be determined by its price. No matter what solution is selected, back up data regularly (once a week, once a month) and keep the copies in a safe place, off-line. Save, and save often.
  • Monitor And Control. Internet and data security involves more than dangerous viruses or dark corporate saboteurs. Human nature in general can be a problem for your business, too. Providing your workers with access to the Internet can give your business tremendous strategic advantages, from training to efficiency to finding new suppliers, and more. But what if the third shift is visiting ESPN or Web sites that are worse? The impact of unbridled Internet access can expose a business to litigation, erode the efficiency of your shop and provide viruses with paths into your network that are difficult—but not impossible—to block. Implement a company-wide policy for Web behavior. Institute an Internet access monitoring plan (several affordable software solutions are available).

For more details about security in the shop, see "The Internet On The Shop Floor: Let's Keep It Safe" by Tony Haynes (National Center For Manufacturing Sciences).

Online Marketplaces And RFQ Models

Online Marketplaces (RFQ—request for quote—sites) are generating a great deal of interest. RFQ sites allow "buyers" of services to post work online, prospective "suppliers" to review and "quote" on those jobs, and the "buyers" to then award jobs to one or more of the participants. These sites help shops reach markets and suppliers they would have had great difficulty finding through traditional channels or programs.

However, RFQ models have their critics. Some observers claim that the RFQ sites provide too little feedback to unsuccessful bidders about the winning bid, especially when compared to the amount of data they require from a participant to register. Some subscribers expect suppliers to flock to them once they join an RFQ service. Few (if any) shops favor reverse auction models, where price is the sole consideration of the potential buyer.

As Tom Beard (Gardner Publications) ex-plains in "What Do Online Marketplaces Really Deliver To Job Shops," one's success with these tools has a lot to do with the expectations a shop brings into such a relationship. There's more to it than filling out a form or mailing in a packet.

Some shops are participating not only as sellers but also as buyers, using the systems to locate suppliers. In one recent event, a shop that was having difficulty with finishing services it had subcontracted used an RFQ model to locate other preferable finishing suppliers.

Another important consideration is the role of a shop's own Web site in its RFQ and general sales efforts. A company's own Web site, its traditional sales channels and RFQ/online marketplace participation should be viewed as integral parts of a comprehensive sales/marketing effort.

Web Sites And Web-Based Strategies

Here are some points that can help you to develop your Web site to better serve your prospects, customers and internal users:

  • It's a tool. Your Web site is a manufacturing Web site. It is a specialized tool that prospects, customers and others use to find out what differentiates you from your competitors. For the long-term, build your Web site to accommodate those who learn about it through traditional means (directories, shows, word-of-mouth) or for those who find it based on a specific keyword or phrase through search engines.
  • Explain what you do and what you've done. Presenting your shop's expertise, capabilities and experiences is the single most important function of your site. Simple lists and pictures of equipment are becoming less effective because more potential buyers will be comparing you to other shops based on the three Cs—capacity, capability and credibility. Define what you do well and make details available. Provide equipment lists, qualifications, descriptions of successful projects, accounts of money and time savings for customers.
  • Serve your customers. Data on inventory, project status, history, outsource status and quality can serve customers extraordinarily well through a Web-based, password-protected Extranet. Many shop control software providers include such functionality in their core products, and others are bringing third-party add-ons to market. Some creative shops have even built their own internal applications. This level of service soon will become the norm, something customers take for granted.

For more examples and explanations of the sales and marketing roles of your Web site, see "Jerked Into The Digital Age" by Curt Anderson (Darex Corporation).

A company leveraging Web-based capabilities to advance a new business strategy is spotlighted in the case history, "Reshaping A Company Through Internet Technology" by Richard Chrzanowski (Philadelphia Gear Corporation).

Security, privacy and payment methods are important issues (but no longer major concerns) when it comes to buying steel or making other transactions on the Internet. User testimony affirms that e-commerce is alive and well indeed in "Getting Comfortable With E-Commerce" by Andrew McElwee (Carpenter Technology Corporation).

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