Driving Innovation, Sustainability and Performance @ ARC's 2011 Industry Forum by Andy Chatha. Today’s Business Drivers Uncertainty Security Scarce Resources Need to Go Green Global Competition Changing Workforce Increasing Regulations Emerging Smart Grid Easy IT Solutions Today’s business drivers demand agility

1. Driving Innovation, Sustainability
and Performance
Through Collaborative Value Networks
Andy Chatha
President
ARC Advisory Group
AChatha@ARCweb.com

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ARC World Industry Forum Programs
1. Relentless Pursuit of Process Safety, Energy
Optimization, and Operational Excellence
2. Anti-Counterfeiting and Brand Protection Solutions
3. Sustainability and Production Management Solutions
4. Improve Performance by Integrating Design and
Production
5. Project Performance Management 2.0: Managing Risk,
Interoperability, and Collaboration
6. Asset Performance Management 2.0: Optimizing
Operations and Maintenance
7. Enterprise Mobility Solutions
8. Smart Energy Management Solutions
9. Beyond the Perfect Order Metric

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Today’s Business Drivers
 Uncertainty
 Security
 Scarce Resources
 Need to Go Green
 Global Competition
 Changing Workforce
 Increasing Regulations
 Emerging Smart Grid
 Easy IT Solutions
Today’s business drivers demand agility

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Easy IT Solutions are Proliferating
 Search
 Social Networks
 Smart Phones
 GPS/Location-based services
 Connected Devices/Internet of Things
 BI or Business Analytics
 Web Apps
 Virtual PCs
 Video
 eBook
Cloud computing hides complexity from the user

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Two Quotes From P&G CEO Bob McDonald
 On Digitizing P&G
“With digitization, our goal is to standardize,
automate and integrate systems and data so
we can create a real-time operating and
decision-making environment. We want P&G
to be the most technology-enabled company
in the world.”
 On Real-time Data
“We are targeting a 20-25% reduction in
some spending areas and we are looking for a
sevenfold increase in real-time data.”

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New Solutions Enable New Business Models
Greater consumer connectivity,
greater knowledge & bargaining
power, mobility, collaborative
buying, etc.
Crowdsourcing, co-
production, rapid
innovation,
customization, 3rd party
intermediaries
Complexity increases in every network and every dimension
Virtualization, PLM-MES
integration, etc
Outsourcing,
collaboration, etc

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ARC CMM Model
Emphasizes the Plant as a Node in a Value Network
External
Business
Customers
Production
Automation
Suppliers
CPM
Logistics
PLM/D
CRMSRM
PLM/S
ERP
Internal
Value Chain Dynamics Drive
Manufacturing Performance
ARC CMM
Collaborative
Manufacturing
Management

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Enterprise Value Network
Value is Created
through the
DESIGN-MAKE-DELIVER
Network
Production Network
Logistics
Distribution Purchasing
Service
Sales,
Retail
Customers
Supplier Network
Engineering
Construction
Planning
Today manufacturers
operate within one or
more networks of
companies that work
together to provide
goods and services
to end consumers
Design

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Design
Collaborative Value Network (CVN)
Focuses on Activities Throughout the Value Network
Production Network
Logistics
Distribution
Purchasing
Service
Sales,
Retail Customers
Supplier Network
Engineering
Construction
Plant & Equipment
Product & Plant
In order to compete
effectively, better IT
tools are being utilized
throughout the value
network to speed and
optimize innovation,
production, and
delivery of goods
and services
Today manufacturers
operate within one or
more networks of
companies that work
together to provide
goods and services
to end consumers

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Enterprise CVN Demands Common
Standards & Processes
Complementary
Data Models
Compatible Technology
Consistent Processes
Shared Goals
Goals
People &
Processes
Technology
Information
Goals
People &
Processes
Technology
Information
Department X
Company X
Department Y
Company Y
Common Standards & Processes are Needed
at All Levels!

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CVN Complements CMM
Helpful to Visualize Lifecycle and Value Network Issues

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• Operating
Excellence
• Enterprise Visibility & Control
• Quality, Flexibility
• Efficiency & Cost Control
• Asset Performance
• Energy, Resource, Mgt
• Risk Mgt & Safety
Execution
• Dynamic
Value Creation
• Collaboration
• Business Innovation
• Product Innovation
• Mfg Process Innovation
• Marketing
Innovation
• Governance
& Compliance
• REACH
• Emissions Mgt
• Carbon Tracking
• 21CFR part 11
• MTSA
• etc
Compliance
Drive Performance
Three Business Imperatives for a Changing Marketplace
Transformative Innovation is Required
to Achieve Highest Enterprise Performance
Optimize
Performance
Extend & Transform
Current Business
Support Corporate
Citizenship
Be Proactive Be Responsible Be Effective

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Thank You.
For more information, contact the author at
xxx@arcweb.com or visit our web pages at
www.arcweb.com

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Acronyms Used in This Presentation
AIM Asset Information Management
ALM Asset Lifecycle Management
CMM Collaborative Management Model
CPAS Collaborative Process Automation Systems
CVN Collaborative Value Network
DCS Distributed Control Systems
ERP Enterprise Resource Planning
MES Manufacturing Execution System
OpX Operational Excellence
KPI Key Performance Indicators
PLM Product Lifecycle Management
SCM Supply Chain Management
SOA Services Oriented Architecture
RPM Real-time Performance Management
A complete list is available on ARC’s website: ARCweb.com