Wednesday, July 29, 2009

Everyone has experienced the occasional headache in sharing or moving data from one computer to another, but in the nation’s manufacturing and construction industries, it is a multi-billion-dollar problem. America’s large manufacturers are globally distributed enterprises that rely on a system of small manufacturers, parts suppliers, shippers, and raw materials producers organized in extended “supply chains.”

The U.S. construction industry is made up of an equally diverse network of more than 1 million firms. Using the auto industry as an example, the average car has more than 15,000 parts coming from 5,000 manufacturers that are made to the precise specifications of the auto company and must arrive on time.

Production costs are no longer the major cost component in these global supply chains—the dominant cost is in the engineering and business activities, which depend critically upon clear and error-free exchange of information among partners.

Inefficiencies and needless roadblocks in the exchange of product design and business data in manufacturing and construction are estimated to cost the U.S. economy more than $25 billion per year. Small manufacturers are particularly hurt by these problems, but they affect the competitiveness of entire industries.