Collaboration 2.0: From execution to orchestration, lessons for manufacturers from Davos forum
For manufacturers, collaboration across geographies with service providers, contractors, partners, and suppliers is integral to their global operations. Yet there is a shift that must occur from collaboration to collaborative innovation. There are emerging technologies to enable this new form of co-creation that can keep manufacturers globally competitive.
Every year, the World Economic Forum picks a theme for its annual meeting in Davos, Switzerland. The themes usually are quite prescient and predict what lies ahead in the coming year. Though I’ve had the privilege to attend Davos for several years now, never before have I felt a theme resonated quite as much with manufacturers as it did this year.
The 2008 theme was The Power of Collaborative Innovation .
Manufacturers today face a rapidly changing landscape fueled by the increasing complexity of globalization. If they can adapt, they may realize significant benefits. Over the past few years we’ve seen manufacturers leverage emerging economies in China, India, Latin America, and Eastern Europe as resource bases as well as markets to grow their bottom lines. Technology ubiquity is breaking down all traditional barriers of information and knowledge across countries, businesses, and consumers. Though it’s often discussed, we are truly seeing the global competitive playing field being leveled, and the promise of the flat world.
For manufacturers, collaboration across geographies with service providers, contractors, partners, and suppliers is integral to their global operations. Yet there is a shift that must occur from collaboration to collaborative innovation. There are emerging technologies to enable this new form of co-creation that can keep manufacturers globally competitive. With these technologies, manufacturers can efficiently create, capture, locate, and share knowledge and expertise internally, while also enabling employees to leverage that knowledge to solve problems.
In doing so, manufacturers must embrace new forms and models of collaboration to better adapt to evolving market conditions, and continue to take advantage of opportunities created by globalization.
IT for collaboration
The operating paradigm for managers must change from one of execution to one of collaborative orchestration.
Consider a $2-billion manufacturing company that services global markets, with a focus on the United States.
Functional areas such as procurement, logistics, and new product development have successfully leveraged widely deployed technologies to drive collaboration for partnering and sourcing. This is the domain of large-scale enterprise applications including ERP, supplier supply chain and supplier relationship management, warehouse systems, product life-cycle management, product data management, and EDI. While providing the transactional backbone for the company, these enterprise applications and associated middleware—along with infrastructure—also facilitate structured internal information exchange and collaboration.
In contrast, functional areas such as sales, customer and account management, channel management, and new product design and development—which recently emerged as candidates for collaboration—did not get enabled through the traditional technology propositions. For these areas, emerging technologies broadly classified as “Web 2.0”-enabled—e.g., RSS, blogs, wikis, widgets, podcasts, and social networking—hold significant promise.
These technologies are quickly finding a place in the corporate world by allowing for unstructured collaboration with partners, suppliers, and customers. In doing so, these technologies enable the shift from basic execution towards orchestration, creating new opportunities.
Klaus Schwab, founder and executive chairman, World Economic Forum, listens to the answers to the Davos Question posted by the YouTube community at the Annual Meeting 2008 of the World Economic Forum in Davos, Switzerland, January 23, 2008.
These emerging technologies will allow the aforementioned $2-billion manufacturer to go beyond mere transactions and share knowledge and experiences with employees across departments, functions, and geographies. To illustrate this further, designers and engineers physically located around the globe can collaborate on building a new product through wikis, while extracting valuable customer preferences and feedback from self-organizing communities and blogs, and feeding that insight to the product development process via employee portals.
Even the functional areas traditionally dependent on transactional systems can boost collaboration by leveraging these emerging technologies. Thus, for that same $2-billion manufacturer, a set of managers responsible for collaborating with five logistics service providers can do so through a portal or wiki, giving all parties a complete view of vendor performance and anecdotal context to the service-level data associated with them.
The evolving orchestration expert
There is no doubt these emerging technologies add a certain level of complexity, but there is no way for a manufacturing company—or any organization, for that matter—to capture all the necessary information, structured and unstructured, without also using these newer technologies.
Similarly, now that these technologies are more readily available, they can’t easily be bypassed as they provide individual-oriented collaborative tools that enable the shift from closed architectures toward open models. This doesn’t mean the end of traditional technologies; these will continue to facilitate structured collaboration in many functional areas. However, for manufacturers to be successful in a flattening world, the new and emerging technologies must have a place in their collaboration tool kits.
The transition to becoming an orchestration expert begins with knowledge management. Knowledge sharing and informal learning are exceedingly critical for manufacturers as operations grow more complex and companies continue to expand globally.
In most organizations, a significant amount of knowledge resides with employees, or in disparate silos of data files and systems. The problem is compounded in the manufacturing sector, which faces the threat of losing implicit, institutional knowledge due to high turnover—e.g., as seen in high-tech—or high tenure levels and aging workforce—e.g., as found in industrial manufacturing and aerospace.
Collaboration technologies play a central role in the management of organizational knowledge. Tools based on Web 2.0 and social networking technologies not only facilitate rich, seamless, and instant sharing of knowledge across communities and organizational units within an enterprise, but they also enable capturing expertise—unstructured and anecdotal information—that would otherwise be lost.
While the benefits of collaboration technologies are clear, the fact remains that many organizations in the industry have not overcome the organizational, managerial, and political barriers that can hinder their adoption. One example involves how intellectual property—both product and process—will be developed and protected in this open, collaborative environment. In addition, there is the organizational challenge of training and developing operational managers for orchestration roles versus execution roles, and to leverage tools built around the new technologies for decision-making. Nearly half of the executives polled in a recent survey from New York-based McKinsey & Co . are not using any Web 2.0 technologies for knowledge management.
That said, the immense business benefits of tapping these emerging collaboration technologies must outweigh the risks. If used properly, these new technologies lead to knowledge retention, more effective training & development, quicker onboarding for new or transitioning employees, faster decision-making, lower operating risks, and complementary insight from structured and unstructured data. These emerging technologies may in fact be the more cost-effective option, particularly in emerging markets with a younger, technology-savvy workforce.
Manufacturers will continue using traditional technologies for collaboration. In parallel, they should experiment with the new and emerging collaboration technologies that allow exchange of knowledge and expertise beyond just transactions—a key to success in the next phase of globalization. Manufacturers that combine both will be better positioned to seize the opportunities and create competitive advantage in the complex and flattening world.
For more on the lessons from Davos, click here .
—B.G. Srinivas, senior VP of manufacturing, Infosys Technologies, can be reached at BGSrinivas@infosys.com
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.