FROM THE BACK OFFICE TO THE SUPPLY CHAIN
SASIWIMON BOONRUANG
Manufacturing 1.0 involved applying enterprise resource planning (ERP) to the back office while Manufacturing 2.0 is all about linking ERP to the supply chain - which is where Thailand is now gradually moving to, according to Cisco Systems, which recently presented its vision for next-generation manufacturing with its Connected Manufacturing solutions.
Cisco Systems (Thailand) general manager, Palasilp Vichivanives, said next-generation manufacturing was where the network became the platform for responsive manufacturing.
Citing IBSG AP E&R and Gartner studies, Palasil noted that the IT manufacturing investment in Asia Pacific was lower than the global average, which was at six per cent, and Thailand's manufacturing IT spending was only 1.3 per cent of manufacturing GDP, the lowest in the region. However, he said, it was an opportunity for Thai companies to step forward.
IT in Thai manufacturing was still in silos without any synchronisation and it created an inefficiency gap. "Seventy per cent of IT budgets are spent on maintenance, not innovation," he said.
Four factors to drive the manufacturing sector in the near future are supply chain agility, open standards, globali-sation and customer responsiveness, he said, predicting there will be more investment in people, processes and systems.
Pointing to Toyota as an example, he said that companies that did business with Toyota were pressured to improve their systems, internally and externally, in order to link with the entire supply chain and to increase productivity.
Leading manufacturers here were now in the process of improving procedures in the Manufacturing 2.0 era.
There will be two types of cabling used in manufacturing in the future, for electricity and for Ethernet, since every piece of equipment will be based on IP technology and computer controlled. Next generation manufacturing was now happening step by step in Thailand and will become Ethernet-based.
Palasilp cited Coca-Cola, where a Unified Communication solution has been implemented and integrated with its ERP system, noting that the company used wireless phones connected to Wi-Fi and retrieved data from an ERP system, transforming text to voice.
"This is an example of driving labour efficiency on the warehouse floor," he said, adding that the company could increase customer service and loyalty, increase picker productivity to 99.8 per cent, and reduce the need for auditors.
Manufacturing is associated with cost-intensive processes. Compared to a huge investment in equipment and machines, the cost of UC and networking systems was very small, but they gave a large productivity boost to the companies, Palasilp said.
Toyota's Technical Centre for the Asia Pacific region, located in Thailand, does R&D around spare parts and the facility was able to decrease work processes and increase productivity after implementing UC as it could better communicate with other Toyota's spare part design centres in the US, Japan, and Australia, he said.
Palasilp said that Manufacturing 3.0 will be about virtualisation, including data centres, supply chains and for ERP. All will be able to be accessed anywhere and at any time.
"In the US, Manufacturing 3.0 is now taking place and we will see it fully functioning in 2010," he said.
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