ARC Operational Excellence Forum in Orlando Highlights ARC’s seventh annual Driving Operational Excellence in Manufacturing Forum was held in Orlando on February 11 and 12. This is a first in a series of Insights to cover the considerable amount of information from the Forum. The forum highlighted the real world experiences of end users in their goal to achieve operational excellence. ARC also invited many key industry executives from the leading supplier companies to share their visions for the future of collaborative manufacturing management (CMM). As manufacturers move into a global business climate that demands the integration of manufacturing operations and business systems, collaboration must become commonplace reality. Collaboration must be a cultural transition that moves beyond the organizational and functional “silos” that currently exist within most manufacturing enterprises. Two issues that have a direct impact on how well manufacturing operations will become integrated with the enterprise are interoperability and complexity. ARC’s Driving Operational Excellence Forum in Orlando focused on the vision for a collaborative manufacturing infrastructure purported by suppliers as well as the real world experiences of users trying to achieve operational excellence.

1. THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN
ARC INSIGHTS
By Dick Hill
ARC’s Driving Operational Excellence
Forum in Orlando focused on the
vision for a collaborative
manufacturing infrastructure
purported by suppliers as well as the
real world experiences of users trying
to achieve operational excellence.
INSIGHT# 2003-10M
FEBRUARY 20, 2003
ARC Operational Excellence Forum in Orlando
Highlights
Keywords
ARC Forum, Operational Excellence (OpX), Real-time Performance Man-
agement (RPM)
Summary
ARC’s seventh annual Driving Operational Excellence in Manufacturing
Forum was held in Orlando on February 11 and 12. This is a first in a series
of Insights to cover the considerable amount of information from the Fo-
rum. The forum highlighted the real world experiences of end users in
their goal to achieve operational excellence. ARC also
invited many key industry executives from the lead-
ing supplier companies to share their visions for the
future of collaborative manufacturing management
(CMM). As manufacturers move into a global busi-
ness climate that demands the integration of
manufacturing operations and business systems, col-
laboration must become commonplace reality.
Collaboration must be a cultural transition that moves beyond the organ-
izational and functional “silos” that currently exist within most
manufacturing enterprises. Two issues that have a direct impact on how
well manufacturing operations will become integrated with the enterprise
are interoperability and complexity.
Analysis
ARC President Andy Chatha’s opening remarks set the tone of the forum
by indicating that all manufacturers today are striving for operational excel-
lence. It is now paramount for businesses to be able to respond to the ever-
changing demands of today’s global economy. Mr. Chatha pointed out that
there is a disconnect between the traditional ways of measuring success and
performance targets given to manufacturing operations. Traditional ac-
counting-based systems were never designed to perform in or measure the
real business value of real-time manufacturing environments. In response
to this, ARC has been developing a guide to real-time performance man-

2. ARC Insights, Page 2
©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
agement (RPM) to assist companies as they strive for Operational Excel-
lence (OpX).
Terry Sutter, president of Cytec Specialty Chemicals indicated that they
have been looking for productivity improvements along the entire supply
chain. In their Emulsion Polyacrylamides plant, Cytec produces over 40
products from more than 40 raw materials. Beginning in 2000, they set out
to make significant productivity im-
provements. These improvements
included taking a best practices ap-
proach, developing a corporate steering
team and a multi-year automation plan
that begins with assessment of their
automation and is an on-going process to
look for improvements. The result was a
capacity increase of over 40 percent with
“first time right” improving from 90 per-
cent to 98 percent. This virtually
eliminated what Cytec refers to as slow
moving off-grade material (SMOG).
Jim Caie, director of controls, robotics and welding (CRW) for General Mo-
tors presented the transition that GM has gone through beginning in the
‘80s. Today, they have moved from uncommon/expensive automation ap-
proaches to a new automation strategy based on standards, common
architectures, and focus on key suppliers. Their transition is not just tech-
nology based, but involves a discipline based on determining the best
architecture and holding it for 3 to 5 years. This allows GM to implement
more predictably with a well thought out strategy. Another aspect to the
discipline is to adopt the philosophy of “Don’t design it! Copy it!” This re-
inforces their determination to get the most out of the use of common
technologies, including the applications they deploy with the technologies
from their chosen suppliers.
Skip Holmes, associated director of manufacturing automation for Procter
and Gamble presented his views of the impact of not only technology on
OpX, but also the effect of leadership. Skip pointed out that technology can
be seductive, but the fundamentals of a business must include the leader-
ship factors to ensure that the two moments of truth are sharply focused.
He indicated that P&G’s suppliers can help them by:
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Real-Time Performance Management (RPM)

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©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
• providing complete business solutions not just technology
• be pragmatic
• deliver on commitments
• recognize that one size doesn’t fit all
• have a technology road map that makes sense
• global support and responsiveness
• and lead!
Panel of Executives
Eight of the Automation Industry’s top executives were assembled to an-
swer questions. Many of ARC’s manufacturing clients submitted their
question for the panel in advance of the forum, and when combined with
questions submitted at the forum, there were far too many to be answered
at the event. The panelists shed some light on what the future of automa-
tion supply might look like for manufacturers.
The panel agreed there was still room for future consolidation among
automation suppliers, although no one felt that they were among those that
would be acquired or consolidated. They also realized that many of their
customers were struggling with the current eco-
nomic situation, and each offered their
commitment to advance the state-of-the-art of
automation. Another consensus seemed to be for
open systems, although it was clear that each
supplier’s definition of open was from their spe-
cific control system’s point of view.
Many of the questions posed to the panelists in-
dicated that there is a general frustration from the
automation user community. The frustrations
come largely from pressures that their markets
are placing on them to continue to lower their
costs. They are looking for real solutions from the suppliers to help them
lower their lifecycle costs. The expressed and implied support for their re-
spective clients will strain many of these suppliers who themselves are
facing tough economic pressures.
ABB Dick McAllister
Emerson Process
Management
John Berra
GE Fanuc Kevin Roach
Honeywell Kevin Gilligan
Invensys Leo Quinn
Rockwell Automation Steve Eisenbrown
Schneider Electric Claude Ricaud
Siemens A&D Horst Kayser
Automation Executive Panel

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©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
Recommendations
• ARC’s models for OpX, CMM, and RPM can be applied to your manu-
facturing operations today, and many users are already doing so. ARC
Forums are an excellent source of information on how to implement
these models in real world situations.
• Automation and manufacturing strategies must be closely tied to busi-
ness issues and business processes. Implementation of the RPM model
necessitates integration of business and operational objectives.
Please help us improve our deliverables to you – take our survey linked to this
transmittal e-mail or at www.arcweb.com/myarc in the Client Area. For further
information, contact your account manager or the author at crhill@arcweb.com.
Recommended circulation: All MAS clients. ARC Insights are published and
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