Managing Automation - December 2007 - (Page 32) [ SPECIAL REPORT ] A New Standard in Outsourcing: The Cisco/Rockwell Collaboration W hen it comes to outsourcing, one of the biggest challenges for manufacturers is establishing credibility and trust with their overseas outsourcing partners. Under normal circumstances, trust is forged organically through human interaction, but when it comes to offshore environments, language and culture barriers create problems that often prevent these natural bonds from forming. “To help companies cross the cultural divide, industry technology standards are needed that are open-architecture-based,” says John Kamauff, a principal at Archstone Consulting. To establish a higher level of trust among outsourcing partners, Cisco Systems and Rockwell Automation are working together — using standard Ethernet technology — to optimize network integration across the factory floor and throughout the enterprise. “The partnership between Cisco and Rockwell will help manufacturers improve visibility, flexibility, and collaboration — something that is greatly needed in today’s global manufacturing environment,” Kamauff says. The initiative will work to deliver reference architectures and detailed design guidelines for common networking technologies. According to ARC Advisory Group, the idea is to develop detailed plans that manufacturers can use directly to build large networks that can serve both factory automation as well as enterprise applications, while consisting of soundly engineered designs with room to grow. The Cisco/Rockwell convergence of network technology allows data to be used in real time, thereby increasing the data’s availability for use by other applications, with participants sharing control and information on a single network. This open network architecture leads to reduced costs, improved productivity, and time efficiencies. “Manufacturers operate in an environment that requires a pervasive exchange of information across all domains of the manufacturing enterprise,” says Craig Resnick, research director at ARC Advisory Group. “As manufacturers move into a global business climate that demands the integration of manufacturing operations and business systems, collaboration must move beyond hype to become a commonplace reality. Rockwell Automation and Cisco provide manufacturers with the guidance needed to facilitate plant floor and IT network integration in a manner that achieves secure connectivity through the use of Ethernet/IP technology.” Do open standards in network technology lead to better communications and increased trust between outsourcing partners? Archstone’s Kamauff thinks so: “Open standards create a more developed environment. To me, this is the direction all manufacturers [that outsource] should take.” tional savings, agility, innovation, and better customer satisfaction, and frees resources that can be focused on other things,” he says. “A poorly functioning one wastes resources through conflict, escalations, duplication of efforts, slow decision-making, lack of followthrough, and more” (see chart, p. 33). Clearly, a gap exists between the requisite tools for success and the use of desktop software and legacy systems for managing these relationships. Some experts believe the answer may be found in software-as-a-service (SaaS), a software application delivery model in which a software vendor develops a Webnative software application and then hosts and operates the application for use by its customers over the Internet. SaaS originally gained traction in functional areas outside manufacturing production, such as CRM, HR/payroll, and financials. “There are many advantages to the SaaS delivery model,” Janeeva’s Gupta says. “This is the only delivery/technology model that makes sense for companies that are working with external service providers.” HIGH-FLYING SAAS MODEL Aerospace leader Boeing certainly seems to agree with Gupta about the benefits of the SaaS model for managing global outsourcing relationships. Chicago-based Boeing’s well-publicized 787 Dreamliner is at the center of an important outsourcing stor y. In many ways, Boeing became a role model for SaaS proponents when the aerospace giant leveraged an SaaS-based supply chain management solution to minimize waste in the supply chain while managing on-time delivery to the end customer. In October, however, Boeing announced that it was delaying delivery of the 787 Dreamliner due to a shortage of fasteners used in assembly. analyst at Industry Directions. “It’s not to say that they don’t play a role. But core capabilities are missing, such as collaborative planning and, more importantly, replenishment and communication capabilities — or some mechanism to trigger vendor-managed inventory transactions. Manufacturers need to be able to manage “Manufacturers need to understand that relationship to specific that their work is just beginning at contract terms with that spethe time the outsourcing contract is cific partner.” How the outsourcing relasigned.” — Vinay Gupta of Janeeva tionship is managed and the tools required to properly manage it are criti“Boeing is heavily reliant on a SaaS solucal to the success of the endeavor. “The availtion for multi-echelon supplier integration,” able research all points to a tremendous Vantage Partners’ Ertel says. “Boeing is an amount of value being at risk in how the relainteresting story. The company used to own tionship is managed — as much as 30% of the 100% of the manufacturing and assembly annual contract value,” says Danny Ertel, process, which was as much as 18 months founder and director of Vantage Partners, a long for an airplane. Now the amount of the firm specializing in negotiation, relationship process they physically own and control, in management, and conflict management. “A terms of the assets, can be counted in days. well-functioning relationship delivers addiBoeing illustrates how the need to orches- ma December 32 2007 Photo courtesy: Janeeva
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