Microsoft Manufacturing & Resources Blog

I was reading an article in EE Times recently where the CEO of Linear Technology, Lothar Maier was commenting on the challenging times for the semiconductor industry.   Maier predicted that “current market conditions will put significant pressure on small and emerging companies that have little innovation and rely on copying products that already exist in the market, as well as those that use price only to gain market share”. 

I am sure that similar quotes from manufacturing executives have been delivered in every downturn.  Net, net, clearly companies cannot survive the downturns without a long term view on investment and innovation.

To this end, I was extremely impressed by the decisions of two major high-tech manufacturers over the past month to make impressive “double down” investments in their long-term future viability. 

First we read from AP of Intel’s decision to invest $7B to upgrade its US fabs to new process technologies over the next two years.  Otellini "urged other companies to make similar investments, arguing from Intel's past experience that the proper response to a slump is to give customers new reasons to buy."

Second, Juniper Networks CEO, Kevin Johnson announced his company's decision this week to increase R&D spending, even at a time when many analysts were expecting cuts.  I had the opportunity to work with Kevin during his time at Microsoft and was always impressed with his vision and long term customer focused view.

Without question these investments are extremely difficult decisions for every manufacturer.  In my visits with our manufacturing customers over the past few months,  I have seen great companies continuing to make investments in the future to emerge stronger.  As I speak with these companies I encourage them to consider how Microsoft technology and solutions can help them double down for the long term.  In many cases, this is helping them deploy products and capabilities  they already own into new business processes.

Microsoft made our own announcement this week about our commitment to R&D through this downturn and for the long run.  Speaking for the Manufacturing and Resources industry team at Microsoft, our commitment to you is to work to bring that R&D back out to manufacturers to help you reduce costs and innovate.

Over the months ahead I will be showcasing in this blog more unique example of Manufacturers and Microsoft innovating together through the economic downturn.  As always, I welcome your contributions to this end.

I spent three days last week at the Automotive News World Congress Event in Detroit.  This was my second year attending this conference and as you can imagine it was a very interesting time to listen firsthand to so many executives from the industry.  The theme of the conference was "A World of Opportunity:  Global Strategies in Challenging Times."  The presentations were excellent and for the most part I felt that there was a strong "can do" spirit at the event.    

One of the presentations that really made an impact was by Jon Lauckner, GM Vice President of Global Program Management.  He took us through a journey of product development at GM over the past six years.  He described a tremendous transformation from a regional view to a truly global view.  In 2005 GM formed Global Architecture Development Teams (GADTs).  This allowed the company to create teams that specialized in certain core competencies, say mid-size vehicles or small vehicles while supplying that product to all markets around the globe.  This effort enables a common global vehicle architecture, followed by a lead vehicle program, then follower vehicle programs in different markets.

Jon gave a great example to illustrate the power of this collaboration and approach.  The 2010 Chevrolet Cruze.    The core architecture of this vehicle was developed in Germany, the exterior and interior design styling from Korea, and the end product for the US market was built in Lordstown Ohio.  The benefits:  reduced architectures and greater economies of scale.   Manufacturing flexibility has also grown dramatically with more standard processes.

So what does it take to enable a process like this?  It requires tremendous collaboration.  Jon described an environment that must manage engineering and design centers across 14 countries with 30,000 plus users.  An environment that transfers over 125,000 files per day (50 GB) with access to over 4,000 suppliers.

At Microsoft we know its more important than ever before that we help manufacturers enable global product development.  Our core collaboration capabilities, combined with our tremendous PLM partners like Siemens and Dassault bring manufacturers tremendous tools for innovation.

GM is definitely wrestling with many challenges right now, but in this case I have to give credit to GM for their great progress in building a global product development organization.  I believe their new products and designs clearly reflect this progress.

If you would like to see more of Jon’s presentation, all executive presentations from the Autonews event are located here.  As always, I welcome your thoughts.

As I meet with manufacturing executives confronting the new economic realities of the post financial-crisis world, one theme resonates over and over; manufacturers want to better leverage what they already have to save money and innovate.  As one heavy truck industry executive recently asked me before the holidays, "Please show me how we can better use what we've already invested in Microsoft." 

While there is no single answer to that question,  I believe that the most important asset that manufacturers needs to better exploit is their own engineering knowledge.  A recent conversation with a leading automotive engineer may help illustrate this point. 

This engineer was about to release an important update to an existing model vehicle.  I asked him to talk me through the improvements he was adding to the vehicle.  One of those improvements involved a change to the door structure, specifically a door hinge.  When I asked him how he went about designing that hinge he mentioned he did so from scratch.  When I probed further he mentioned how frustrating it was trying to search across five different systems to find other hinge designs and engineering test data.  It's not that he or anyone else on the team was excited about engineering a door hinge, but the re-use tools were slow, cumbersome and eventually cost the project extra time to market.

  Christoper Yeung at Cambridge defines engineering re-use as follows: "Engineering re-use is a business strategy of using the firm's existing assets in new applications to create new assets.  In other words, re-use in general aims to exploit the value of economy of scale of assets by leveraging resources spent in one application in multiple other situations to reduce time to market, development resources, costs and risks."

Engineering re-use has been a long-time goal for manufacturers, but the real results have been elusive.  Many knowledge management practioners have espoused the importance of building these "uber" systems to trap and capture knowledge inside organizations, but have failed to deliver the right technology, process or behavioral change necessary to execute on such systems.

Microsoft certainly doesn't have all the answers here, but I do feel confident that we are making progress with better tools and partnerships.  Products like Sharepoint are enabling new engineering re-use capabilities through Enterprise Content Management,  Enterprise Search and Social Computing.  Partnerships with leading PLM providers like Siemens and  Dassault are enabling better integration of engineering data in productivity and collaboration applications like Microsoft Office System.

Now is the time to pursue engineering re-use as a critical cost saving and innovation driver in manufacturing.  I welcome your thoughts and feedback on how your company or work team is succeeding through this strategy. 

I read a great article in PRIME magazine regarding the role of unified communications in driving cost reduction in manufacturing.  The breakthrough here is the new focus on using UC for reducing operational costs in people-driven processes.  I've included an excerpt below...

"CIOs of Chinese manufacturing companies recognize that unified communications solutions offer unprecedented opportunities to reduce costs, foster collaboration and improve their competitive position, according to a new China Computerworld (CCW) Research study, sponsored by Nortel.

Of nearly 100 Chinese manufacturing company CIOs surveyed by CCW Research, close to 74 per cent believe that unified communications is essential for improving efficiency, while 64 per cent hailed its benefits in reducing the cost of employee communications.  These cost savings are being realised as unified communications break down the barriers across email, voice, video, conferencing, presence and other forms of communications to help employees work more easily and effectively than ever.

“Manufacturers have traditionally relied on improvements in manufacturing technology to increase the profitability and efficiency of their manufacturing processes but today’s information-driven business environment requires improvements in people-driven processes as well,” said Haitao Guo, senior analyst and vice general manager of CCW Research. “Our findings show broad support for unified communications among Chinese manufacturers. Early adopters are already finding that unified communications enhances their competitive position by enabling better collaboration amongst employees, partners, and customers no matter where they are located.”

I see huge potential for innovative new uses for UC in manufacturing and operations processes. More to come on this shortly, but I am already seeing many leading MES and factory automation vendors now building notification systems to connect into smart UC systems.  I welcome your ideas or creative use cases for UC in manufacturing. 

Tyler

For many manufacturers, specialized engineering applications are the lifeblood of the product development process.  Because of the many system dependencies in these applications, the ability to rapidly deploy and upgrade these applications with the latest capabilities has always been a challenge.   Imagine 2500 chemical engineers all clamoring for new capabilities but with no cost effective way to deploy it to them quickly.   The impact is clear,  delayed time to market, lost productivity and under utilized license investments.

Virtualization has been a tremendous breakthrough in IT scenarios like server consolidation, but the power of application virtualization is just starting to impact manufacturing operations and engineering.  Application Virtualization provides the power to virtualize applications and run them independent of the system configurations and specifications of the local system.  Net, net,  IT can test and deploy applications in days instead of weeks.  Engineers  get the capabilities they thought they were buying when the signed the license agreement.

I'd like to point you to a recent success story at BASF showcased in Information Week.  BASF choose to virtualize their AspenOne application from Aspentech using Microsoft application virtualization.  BASF has between 2500 and 3000 engineers using the virtualized application for modeling complex chemical processes.  They now get new releases in days instead of weeks but more importantly they are able to "more quickly gain insights into plant and equipment behavior to optimize decision-making, reduce capital, and operating costs and accelerate time to market."  With stories like these its clear that the future of virtualization in manufacturing scenarios is extremely promising.

I'm interested in other use cases you are seeing for virtualization in manufacturing operations and engineering.  Please share your comments and ideas.

 Tyler

As we continue to wrestle with an economy weighed down by major energy and housing shocks, it’s clear that US Manufacturers are helping to offset some of these losses through strong exports abroad.  With a weak dollar and with increasingly efficient manufacturing processes in the US-export growth has risen 11% in the last year alone creating over 119,000 new domestic jobs.  See this press release from National Assoc. of Manufacturers (NAM).

“ With the domestic economy stuck in low gear, global engagement is the key to growth and job creation.”  NAM President and CEO John Engler

In my customer and press presentations I talk frequently about emerging markets as being one of the core manufacturing forces shaping the future.  It’s more critical than ever that the software and solutions we bring to market at Microsoft help our customers get to global markets and manufacturing networks.  Microsoft capabilities around collaboration, BI, content management, IP security, and social networks all enable global engagement. 

My favorite case study on this topic is the Gates Corporation story about building a global “culture of speed” in supplying hoses and hydraulics to the global auto industry.    This is just one of many stories that I hear over and over again from our customers in the field. 

There has never been a more important time for US Manufacturers to arrive in new markets with the right products tailored to local customer requirements.   Succeeding in the global marketplace will require a new manufacturing network of people, suppliers and partners all connected with the information necessary to compete.   

If you have stories of how Microsoft software has enabled you to collaborate and compete in new markets, I would love to hear more about them here.

Tyler

The most prominent and arguably most critical supply chain tool in the world is Microsoft Excel.  In supply chain conversations, manufacturer after manufacturer reflect back to me their tremendous dependency on this tool for supply chain processes.  As we delve deeper into topics of supply chain collaboration and visibility we see that Excel acts as a bridge "language" between most organizations whom for reasons of expediency and simplicity often rely upon excel and email to form the glue of unstructured supply-chain processes. 

I've heard this so much that I often jokingly refer to this model as the "E-Squared" supply-chain that is Excel * Email.  And when I describe it that way, our customers all smile and know exactly what I am talking about.  While many executives tout the tools, it's very clear that they want more from Microsoft in supply chain collaboration.  You can almost sense a nervous dependency here with these executives, meaning that they are running into limitations.  There are still too many redundancies in the data exchange, constant proliferation of multiple versions of the truth, and almost no auditability within or between organizations. The spreadsheets are getting bigger and bigger while the collaboration is getting tougher and tougher.

I realize that this is by no means "news" to anyone reading this blog.  My comments here are definitely not meant to be a criticism "E-Squared."  Instead, I see tremendous opportunities to unleash new capabilities to tackle these increasingly complex supply chain scenarios.  Our challenge at Microsoft is to introduce manufacturers to the new capabilities that are available and that in many cases are already on the computer right in front of them. 

We need to change the supply chain collaboration discussion from an Excel and Email model to instead a model leveraging the entire capabilities of Microsoft Office System 2007.  It's now about using things like Office Sharepoint and Excel Services to build interactive BI portals and dashboards.  Using Excel Services analysts within or between companies can now collaborate, analyze, pivot, and interact with data using Excel Web Access and work from a single version of the truth.  It's now about building Office Business Applications to manage data interactions between Office and your ERP, SCM and CRM systems.  Microsoft's Entertainment and Devices Division just released a powerful case study on how they used Office System to connect together over 140 different supply chain workflow activities (previously managed in Excel) in under 45 days.

When I talk to customers about these capabilites they are excited but are often skeptical.  They wonder if they could ever build the proficiency in their employees necessary to leverage these capabilities.  I think its a valid and fair concern.  I have the advantage however of seeing the creative ways our manufacturing customers are using these innovations in their business across the country.  It can be done and is being done.  Deploying these capabilities and training your people how to use them is clearly not a "big-bang" supply chain solution.  Instead its based upon the idea of empowering your people.   

If we can get these capabilities to the right people (the same ones who resourcefully use "E-Squared"), I am extremely confident that a new wave of creativity and innovation would proliferate across supply chain and operations teams, driving responsiveness and efficiency across the value network.

 I welcome your feedback and thoughts here.

Tyler

One of the hottest topics with Microsoft manufacturing customers is High Performance Computing (HPC).  From product development to manufacturing engineering, from logistics planning to supply chain modeling, new applications for HPC are being deployed everyday in the world's leading manufacturers.  The challenge however has been that until recently much of the innovative power of HPC has been in the hands of too few.  Unfortunately, proprietary systems, complex architectures and difficult administration have been the norm in HPC .  Microsoft is working to address this challenge and to make HPC accessible to more people.

I've asked Tejas Karmarkar a HPC Solution Specialist at Microsoft to guest blog with me on this topic and to tell us more of what he is seeing in the marketplace. 

Tyler

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In the manufacturing industry you can easily classify HPC applications broadly in to two categories, first is traditional engineering simulation e.g. Automotive Crash Simulation where you are trying to predict structural behavior of the car in an impact event or computational fluid dynamics where you are trying predict airflow over the airplane wing.  Second category is in High Tech industry for EDA applications and parallel software build processing. 

Microsoft is doing its parts by developing integrated platform and tools for HPC environments with focus on users, administrators and developers who can take advantage of technology advancement in this area to solver bigger and more complex engineering problems.

Microsoft is making wider adoption of HPC possible by moving “SILO’S” or “ISLAND’S” of HPC in to integrated data center infrastructure.  The workflow and interaction with HPC environment can be made seamless by using other Microsoft technologies such as Active Directory, Windows Deployment Services, and Microsoft Systems Center etc.

Many of our manufacturing customers are adopting or looking to adopt Microsoft’s HPC technology here are a couple of recent examples.

Callaway Golf's new HPC cluster is delivering an eightfold increase in performance, helping make engineers far more productive and enhancing their ability to deliver innovative, high-quality products.  Furthermore, by choosing Windows Compute Cluster Server over Linux, Callaway Golf is benefiting from a solution that is easier to use, is simpler to support, and will save the company thousands of dollars in software and maintenance costs.

Procter & Gamble was able to deploy a fully functional Windows-based cluster in just a few hours versus two weeks or more previously.  By moving to clusters running Windows Compute Cluster Server 2003, Procter & Gamble can broaden HPC use, increase user productivity, and speed cluster deployment and management. 

I welcome feedback, comments and questions.

Tejas 

Manufacturing business models are changing.  Traditional original equipment manufacturers are embracing new "smart" service business models enabled through embedded software, wireless connectivity and on-line services.  IndustryWeek defines smart services as "differentiated post-sale product support capabilities, enabled by wirelessly capturing and analyzing real-time product performance information."   I would broaden that definition to include not only support capabilities but also value added post-sale features and product improvements.  These services have the power to redefine the product value chain for manufacturers.  From industrial equipment companies to Auto OEMs to consumer electronics companies, this new convergence is being discussed in manufacturer boardrooms across the country.  I've included a few market leading examples of companies that I believe are delivering on this convergence today:

• Gardner Denver with Qualcomm
• John Deere - JDLink
• Ford Sync
• Microsoft XBOX Live

This shift has tremendous implications for manufacturers.  Product development roadmaps are more complex and must converge to incorporate software design, on-line service management and traditional device and equipment manufacturing.  Product lifecycles are shortening as releases and innovations now ship "real-time" with software updates delivered to devices over the network as needed.  Customers are demanding connected product "experiences" rather than just a product support link on a website.  Real-time data gathered from these devices is becoming a tremendous resource for product and customer research.  Manufacturers also need to infuse new people and skills into their organizations to make this shift possible.

At Microsoft we are working on many fronts to help manufacturers accelerate the new manufacturing convergence.  One area of focus has been in embedded software.  Microsoft has been developing Windows Embedded for over ten years.  This software is helping over 1,000 manufacturers around the world innovate in the connected devices they bring to market.  Another area that Microsoft is focusing on is improving connectivity of people, data and devices for consumers through an on-line service.  Microsoft has released a Tech Preview of new service called Live Mesh.  Although still in a very early stage, I believe this service demonstrates the type of connected experiences that software will allow manufacturers to deliver to their customers in the future.  I encourage you to check it out.  Finally, another key front for Microsoft in enabling this convergence is in building software development tools that provide engineers the power to bring these new products and services to the marketplace.  Visual Studio 2008 will be shipping later this year and represents a breakthough in application development for connected devices and the web.

The convergence of these capabilities and technologies in the marketplace represents one of the single greatest business opportunities for manufacturers to differentiate themselves in the marketplace over the next five years.  I welcome feedback and learnings of other manufacturers embarking on this transition.  I'll be posting updates on this topic and including other successes in the marketplace in the weeks and months ahead.  

 Tyler

I asked Greg Walker, a Supply Chain Specialist on our US Manufacturing team to guest blog with me on this topic.  RFID Momentum is building and we wanted to jump in and share some perspectives from Microsoft.

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In this very exciting time to be involved with the RFID community, I have noticed a shift in attitude over the past year.  Yes, hardware and device technologies continue to develop, and there are some exciting new advances (we saw some of this first-hand in Las Vegas at the RFID Journal Live show in April).  And yes, there will continue to be areas where RFID is viewed as more of a cost than a benefit, like the mandates for consumer goods manufacturers. 

But the RFID conversations I have on a daily basis with our Manufacturing customers are not about mandates or the latest active tag capabilities.  They are about business value and how RFID can be leveraged in their supply chains and manufacturing facilities to drive a level of visibility and execution that was not possible before RFID.

I have started to see some patterns around the RFID scenarios that our customers are adopting to drive business value now.  One example is asset tracking.  Assets that can make sense to “track” include those that support the manufacturing process (generators, tools, maintenance equipment) and those that don’t (laptops, disk drives with confidential information).  Other “assets” that make sense to track are re-usable transport items.  These are bins, totes, pallets, racks, etc. that stay in a closed-loop and can be managed to both increase utilization and provide visibility of the items they are “transporting”. 

Re-usable transport items are used extensively in Manufacturing supply chains, from consumer goods (plastic pallets are used to move goods from manufacturing facilities through DC’s to retailers) to automotive (racks are used to move parts from suppliers to automotive assembly plants, as well as control the overall flow of inventory in the process).  A live example of this scenario is iGPS, which is using the Microsoft RFID platform to manage the second largest RFID implementation in North America (one million assets, two million transactions per month and growing).   An additional benefit of iGPS plastic pallets is sustainability & support for manufacturer’s “green” supply chain initiatives vs. wooden pallets.

Other areas where I have seen adoption include work-in-process management, automated goods receipt, and promotions execution (validating that promotional displays and product are on the retail floor to coincide with promotional activity).

 Microsoft’s goal has been to lower the hurdle rate for these scenarios, drive RFID into the mainstream, and support widespread adoption by providing a platform that is affordable, scalable, performant, and open to the .NET development community.  Additionally, the Microsoft RFID platform provides “plug-n-play” connectivity to RFID devices, much the same as a Windows desktop supports printers and external hard drives. 

Our customers now not only have the option of leveraging the global Microsoft partner community to build RFID applications, but can also “build-their-own” on a platform that is supported as part of their existing Windows infrastructure.  In my view, the RFID vendors and providers that will be successful in this  are those that provide exciting new RFID applications “Off-the-Shelf” to address business problems.  Xterprise, who has built out standard applications for high value solution areas, is a great example of this.

I look forward to hearing more from our customer base on their experiences with RFID, as well as the exciting and innovative use cases they are deploying.
(Greg Walker)

By way of introduction, my name is Tyler Bryson and I am the US General Manager of the Manufacturing and Resources Sector.  I have responsibility for Microsoft's sales, solution, and partner strategy for serving enterprise manufacturing customers in the US.  The most common response I receive from customers when I introduce myself and the role I play at Microsoft is "I didnt know that Microsoft was focused in manufacturing?"  I've determined that the answer to this question that manufacturing matters to Microsoft may be the industry's best kept secret or at very least a story that despartely needs to be told. 

In my role I have the privilege of meeting with dozens of our top manufacturing customers and their senior executives each year.  In these meetings, I am constantly amazed at the business and product innovations being delivered to the marketplace every day by our customers.  Many times these customers share back to me a common thread of some critical Microsoft technology helped to design, manufacture, sell or service their product in the marketplace.  Whether the customer is using our Windows embedded operating system in their factory automation initiative or using our latest Silverlight technology to create amazing new customer experiences on the web, there is a tremendous breadth and depth to our impact in manufacturing.

I've created this blog as a vehicle to connect you to these innovations and ideas from across Microsoft in Manufacturing.  I will share the good and the bad, but always in the spirit of learning, improving and becoming a better supplier to the manufacturing industry.  Wherever possible I'll do this through the voice of our customer and try to keep it focused around what's really possible today, and where we are going tomorrow.  I invite you to subscribe to this blog and share your insights, feedback and questions.  I will post new entries at least once per week, but also in "real time" too as new developments and trends hit the wire.  Manufacturing matters to Microsoft!  I look forward to writing and sharing this story with you.    

 Tyler Bryson
GM US Manufacturing