Manufacturing 2.0: Manufacturers are beginning to see the business case for employing the latest set of Web-based tools
June 15, 2009 by Scott Bury
If there was a software tool that could help you find the information you didn’t know you had, could leverage the knowledge of your customer base while you’re developing new products, and could speed the time to market for those new products, would you use it?
Manufacturers are definitely interested in the functionalities called “Web 2.0,” in the possible use of blogs, podcasts and wikis in their businesses. But there seems to be some hesitation about implementing them internally.
What is Web 2.0? A buzzword credited to author and publisher Tim O’Reilly, “Web two-point-oh” refers to a new wave of technologies like wikis, blogs, RSS and “social networking” that, in general, allow for greater interaction, communication and collaboration on projects through the Web. Web 2.0 technologies also have the ability for people with little formal training in computer programming to develop new tools by combining others into “mashups.”
Web 2.0 also includes the often controversial “social networking” systems like MySpace, Facebook and YouTube, which allow people with no computer programming ability to share ideas and post videos on the Internet.
While Web 2.0 holds great appeal for Gen Y, manufacturing businesses stand to gain a lot from implementing the technology. “Something like Facebook for the enterprise is not really that new a concept,” says Jim Murphy, Research Director, Knowledge and Content Management with AMR Research in Boston. “Companies like Boeing and others in the aerospace and defense industry were doing that 20 years ago. But the consumer Web has popularized these new applications.”
One of the most common and obvious examples of a Web 2.0 application for business is the user forum. Apple, Dell and Intel are just three high-tech manufacturers who sell to consumers to sponsor user forums, with sign-in, search and threaded discussions. “They’re scratching the surface of the technology,” says Hugh Thompson, head of Digital Home Canada and a Web 2.0 consultant based in Toronto.
Such discussion forums can reduce customer service costs, by diverting a large number of phone calls to the Website; it also leverages the knowledge of the user base, augmenting that of the staff experts, and bringing the knowledge of third parties under the manufacturer’s umbrella.
New capabilities for manufacturers
“The software can be really transformational,” says Susan Minassian, Product Manager for Lotus Connections at IBM. Both a user and a developer of Web 2.0 software, Minassian is enthusiastic about the business process benefits the technology offers. “Software like this can provide direct channels to feedback from customers and employees. Feedback is essential product designers and engineers, because it can point out drawbacks or weaknesses from the customers’ point of view, and can help you decide where to focus time and resources.”
IBM, and other companies, are also using Facebook-type “social networking” software to capture not only feedback, but also knowledge from employees across the enterprise.
“It provides a significant productivity boost for projects, because of the amount of information that employees have is now available in many different channels, allowing more people to leverage what’s been learned by their colleagues elsewhere in the organization,” says Minassian.
Creating a user forum is not that difficult, and many companies have been using internal “bulletin boards” on their intranets for years. What Web 2.0 applications do, however, is provide standardized tools to make that even quicker, and make it possible for individuals to create new tools that fit the way they want to work.
The notion of the “mashup,” the combination of two or more programs into one function, has also been around for a long time; Murphy points to companies that combine Google Maps or Yahoo Maps with their customer relationship management systems to show the closest retailers, dealers or service locations on their websites. “Standardization of software elements has made it possible to combine functionality,” Murphy says. The Web has become a platform that allows users to put applications together.
Web as intermediary
“E-mailing spreadsheets back and forth is just too old-world,” laughs Ken Toews, President of Kanata, Ont.-based of BCT International Inc., a contract manufacturer of electronic and mechanical assemblies, plastic injection moulding systems, cables, and provider of die casting and metal stamping.
BCT has mashed together a FileMaker database and the Web to allow people in its manufacturing facilities in Hong Kong, Shenzen, China and New Delhi to keep the head office up to date on projects and products automatically. Using the database, managers on both sides of the world can see and update order status. The database also can export data and send it in a format directly to BCT’s customers’ supply chain systems.
“It cuts labour and transaction costs, because the customer doesn’t have to call someone at our office to find out their order status — they get a report in their system automatically,” Toews explains.
This use of the Web as both a delivery medium and application platform is a key characteristic of Web 2.0: in the U.S., Ford Motor Co. has a specialized Web portal open only to dealers that allows them to log in, select images and build a customized brochure. The software then orders quantities from approved printers.
“A wiki could help support product innovation or new product introduction by capturing what was learned in the past, with previous new product introductions,” says AMR’s Murphy.
“Web 2.0 applications provide a level of interactivity combined with new technologies that allow people to do new things easily,” says Thompson.
The majors notice
But aren’t data integration, knowledge management and networking what the big enterprise-wide software systems are all about? Does Web 2.0 threaten to replace them, at least at the low end with smaller companies?
The big software firms have noticed Web 2.0. In 2006, Google — itself a Web 2.0 developer — bought YouTube. Last year, it launched Google Apps, free office-type software (word processing, spreadsheets) available through a Web browser.
IBM developed its suite of Web 2.0 applications from systems its people had developed for their own use on other IBM projects. “By 2002 to 2003, more people were using ‘social networking’ types of applications to share information and ideas, and what started to emerge were ‘communities of interest,’” explains IBM’s Minassian. “A lot of people were also writing blogs on our intranet to hold discussions across different locations.” IBM started to see real benefits from this type of application: faster spreading and sharing of knowledge and solutions across the enterprise, better collaboration and better research. Eventually, the company put these together into a suite sold under the Lotus brand, called Lotus Connections.
Lotus Connections includes Profiles, which lists people by profile and helps users find knowledge, experience and expertise; Communities, the equivalent of social networking, which allows users to organize according to interest, expertise, or job requirements; Blogs, for personal sharing of information, ideas and opinions; Dogear, which is a “social bookmarking” system that allows users to “tag” Web pages, e-mails, files and just about any other digital asset and make them available to others in their Communities; and Activities, which helps users organize tasks and projects, share files and e-mails, paths and other tools. Each application is available separately, but are also completely integrated: users can move tags from Dogear to help organize Activities, use Profiles to help build a project team, and use Activities to share with others in their Communities.
Microsoft’s SharePoint is a web-based platform that provides and manages access to shared files and servers, and can thus produce things like wikis, blogs and other collaboration systems. Users can create task lists, discussion forums and more.
SAP, one of the leaders in enterprise software systems worldwide, has launched NetWeaver, which gives users the ability to put together different functions into dashboards — analogous to the Web mashup. NetWeaver also makes it — relatively — simple (compared to using most SAP applications, anyway) to organize and manage collaboration, teams, projects and digital assets, or files.
Failure to launch
“The use of Web 2.0 by businesses is really still in its infancy,” says Thompson of Digital Home. “Companies will put up discussion forums for their customers to share solutions, but some are worried about negative comments — one retailer even cancelled a discussion forum for fear that someone might endorse a product they don’t carry.”
Jim Murphy of AMR Research points out that Web 2.0 is not without its risks. “The consumer Web has made things like FaceBook and blogs popular, and businesses have to either adopt similar functionality within their organizations and the IT structure, or they face a risk when people start using them on their own.”
Businesses, particularly those heavily dependent on their IT infrastructure and the knowledge of their people, will face increasing pressure to implement at least the functionality of Web 2.0 tools.
Consulting firm McKinsey & Co.’s 2007 global survey, “How businesses are using Web 2.0” finds that nearly three quarters of respondents to a survey of executives said they planned to maintain or increase company investments in Web 2.0 technologies.
“Companies using Web 2.0 technologies have developed a new way of bringing technology into business,” the report states. “This new approach is easier to implement and more flexible than traditional top-down approaches.
“Companies aren’t necessarily relying on the best-known Web 2.0 trends, such as blogs; instead, they place the greatest importance on technologies that enable automation and networking.”
And North Americans may not be the leaders this time around. “Executives from China and Latin America … now plan to invest at the same rate or even faster than those in Europe and North America,” says McKinsey’s report.
“They’re enabling technologies,” says Murphy. “They enable people to find information, share it and support their projects and tasks. Then allow businesses to bring information and feedback in from their user communities, and use feedback more effectively.
“What often happens when a product hits the market and takes off is that another company realizes they had the same idea a year earlier, but it didn’t go anywhere for a variety of reasons. Better ability to capture the knowledge they already have can help businesses increase their speed to market and learn from previous experiences.”
Scott Bury is a journalist and educator based in Kanata, Ont. He regularly covers high technology and manufacturing. You can reach him at email@example.com.
Stories continue below