Perhaps more than any other vertical, the manufacturing industry is constantly changing. Where manufacturers once concentrated on getting the most throughput out of production assets, now the focus has shifted to a more collaborative manufacturing model, to optimize the value and productivity of people.

According to a 2005 report from ARC Advisory Group, an analyst firm in Dedham, Massachusetts, successful manufacturing enterprises have become global and lean. To compete, companies must develop and use common processes, standards, and interoperable collaborative architectures that enable the staff to be more efficient and effective. Those that make the transition toward collaboration will be better able to deliver products on time and to meet customer expectations.

So what is collaborative manufacturing? "From our perspective, collaborative manufacturing means disseminating information from low levels of the manufacturing process up to higher levels where it can become visible," says Dick Slansky, senior analyst at ARC and author of the report "Event-Driven Manufacturing: Effective and Responsive P2B Realized." It is all about "taking basic data from the production and control systems and then exchanging that data with the business systems," providing individuals throughout the organization with the visibility to see what's happening on the shop floor.

Collaboration is an essential precondition for corporate agility. And according to Slansky, it is increasingly a requirement in an age where customers in many industries expect products that are specifically tailored to their needs.

The key to collaboration is finding the right data and then making it actionable by people able to make decisions based on it. Production floor managers, for example, might consult peers for help with a specific problem on the line. Boardroom executives can evaluate production data against corporate key performance indicators (KPIs) such as on-time delivery rates, making adjustments if necessary. The idea is to arm people with more timely and relevant information to do their jobs, improve productivity, and set the stage for innovation along the way.

"This is about creating visibility across silos of information, and giving people full visibility into the job they are trying to do," says Lorenzo Pengo, Microsoft managing director for manufacturing industries, Europe, the Middle East, and Africa. Supplying employees throughout the operation with targeted, role-based information increases their effectiveness. "They can help improve the processes from the bottom up. People are the key actors to improve the processes," he says.

Other recent reports back up ARC's findings. According to a 2006 Microsoft white paper, "Leading-Edge Collaborative Environments in Discrete Manufacturing Industries," collaboration goes beyond simple information sharing. Properly implemented, it helps teams of people and systems to work together efficiently. The team may be in-house, or spread across several companies in the supply chain.

User-friendly access to integrated, real-time business data is at the core of the collaborative environment. Fortunately, the tools needed to enable this are readily available. The Microsoft white paper points to e-mail, instant messaging (IM), Web portals, and online conferencing as examples of specific technologies that facilitate collaboration.

Pinpointing the right information to share with colleagues is typically the bigger challenge. As Slansky puts it, there is a big difference between raw production data and information that leads to insight. "You put all this data together and aggregate it so it becomes intelligent information so people can make decisions on it," he explains.

How quickly individuals are able to find and act on meaningful real-time information plays a major role in collaboration effectiveness. ARC even has a term for this: event-driven (as opposed to transaction-based) manufacturing.

"Event-driven manufacturing refers to response to real-time information generated from an event occurring within production," says Slansky. Work ceasing on a work cell due to lack of the needed components is one example. But an event need not be exceptional, as in this case. It can also refer to routine events such as changing over a production line or speeding or slowing the rate of production.

In collaborative manufacturing, it's critical is to get the right information to the right employees so they get the data and insight needed to do their jobs better on a daily basis, says Chris Colyer, global industry manager for process manufacturing at Microsoft. Take, for example, a line operator who needs to know how much product is flowing through the line at any time. That person needs to know how that quantity compares to production goals and whether quality levels are being met.

Analytics software can serve KPIs to people in a variety of different positions, enabling them to make better decisions in real time, adds Colyer. If quality levels on a particular production line are falling short, for example, the operator could reach out to colleagues for advice on how to correct the situation.

Employees from all areas of the manufacturing enterprise need information in a familiar format, such as the Microsoft Office applications, for maximum productivity. "Our value proposition is that we allow some easy, familiar tools to drive a framework that brings visibility to their roles," says Colyer.

Collaborative manufacturing is a natural fit with the Microsoft people-Ready business philosophy. People-ready businesses boost their bottom lines by empowering employees with information. Similarly, collaborative manufacturing requires employees to share data in real time, from shop floor to the executive suite and throughout the supply chain.

The reality of the global pressures facing manufacturers today mandates collaboration and sharing electronic information as a way of life. "Because companies are part of a network economy, they need to collaborate across the value chain," says Pengo. "They need to have a collaboration strategy for survival."

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