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Broadband Technology in Manufacturing
Final Report
Prepared for:
Commonwealth of Pennsylvania,
National Telecommunication & Information Administration and
IRC Network, Inc.
May 2014
Irene J. Petrick, Managing Director
& Matthew Prindible, Associate
Corresponding author: [email protected]
This project was financed by a State Broadband Initiative (SBI) grant from the U.S. Department
of Commerce, National Telecommunications and Information Administration (NTIA), under the
administration of the Commonwealth of Pennsylvania, Governor’s Office of Administration
(OA) in partnership with the Department of Community and Economic Development (DCED).
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TABLE OF CONTENTS
Executive Summary ...........................................................................................................2
Overview .............................................................................................................................5
1. The Web-Based Survey of PA Manufacturers .......................................................7
1.1 Survey Design ....................................................................................................7
1.2 Results ................................................................................................................7
2. One-on-One Interviews ..........................................................................................14
2.1 Focus ................................................................................................................14
2.2 High Level Findings ........................................................................................15
2.3 Case Study: Videon Central, Inc. Sets an Example in Broadband Use
and Information Technology Readiness for PA Manufacturing SMEs ...........16
3. The Future of Manufacturing and Its Broadband Implications ....................... 18
3.1 3D Printing and Advanced Manufacturing ......................................................18
3.2 Considerations for Data Security and Intellectual Property in the Advent
of Digital Manufacturing .................................................................................19
4. Implications for the Need for Broadband & Programs that will
Support its Adoption, Implementation and Successful Execution .....................20
Appendix 1: Broadband Programs and Examples of How Broadband Drives
Competitiveness in Manufacturing ................................................................................24
1.1 Public and Public-Private Partnership Programs .............................................24
1.2 Broadband Connectivity and its Potential for Manufacturing, Particularly
for Small to Medium-Sized Manufacturers (SMEs) ........................................29
1.3 Driving Manufacturing Innovation through Broadband Connectivity –
In the Office .....................................................................................................31
1.4 Driving Manufacturing Innovation through Broadband Connectivity –
In the Shop .......................................................................................................34
1.5 Summary ..........................................................................................................37
Appendix 2: Web-based Survey Content ......................................................................38
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EXECUTIVE SUMMARY
Background
This report was commissioned by Pennsylvania’s Industrial Resource Center (IRC) Network,
Inc., a system of seven manufacturing extension programs focused on enhancing Pennsylvania’s
global leadership in manufacturing. The study’s objectives are to better understand best
practices relative to broadband use within the manufacturing sector, identify trends and industry
perceptions relative to broadband use across Pennsylvania-based manufacturers and to craft
sound recommendations on how manufacturers can leverage broadband technology for
competitive advantage. The findings of this study are also intended to inform state and federal
policy development around broadband and technology-based economic development.
The study included a critical review of secondary research, a web-based survey to collect
information about the state of Pennsylvania manufacturers’ knowledge of and use of broadband,
focus groups and one-on-one interviews with key manufacturers in the state to ascertain details
about their use of broadband, the challenges associated with broadband use and the benefits
derived from leveraging broadband technology.
Findings
From secondary research, the following macro level trends were identified:
The evolution of advanced manufacturing, such as 3D printing, suggests a growing need
for broadband connectivity in the future.
Broadband technology will be a key enabler to competition for increasingly customized
products aimed at increasingly segmented markets.
The use of broadband varies widely among companies and is unique to their business and
management environment.
A key theme in broadband effectiveness is tied to the company’s approach to its data
management and communication flows.
As digital design and manufacturing increases, the importance of intellectual property
and data security increases. Most small to medium-sized manufacturers are ill equipped
to address these growing needs internally.
Broadband infrastructure and connectivity draw companies seeking new locations and
enable existing companies to expand.
Pennsylvania’s policies and current law around broadband deployment mandates upload
and download speeds, which are now behind emerging national trends and not sufficient
to guarantee competitive advantage.
While the preliminary data from various sources may be slightly different, a picture emerges
wherein many Pennsylvania manufacturers are unprepared for the future of manufacturing that
will be enabled by broadband connectivity and digital technologies. Only a small number of
manufacturers surveyed or engaged in this study understand the potential for broadband-enabled
data management, data transmission and storage and interactive collaboration and
communication. Moreover, there are few detailed case studies that Pennsylvania manufacturers
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can reference to better understand how information technology (IT), digital manufacturing and
broadband technologies can impact a manufacturing enterprise both strategically and
operationally.
The following key gaps have been identified:
Pennsylvania manufacturers, as a whole, have not fully evaluated the potential that
digitally enabled manufacturing presents to their business. Many manufacturers only use
broadband for email purposes. Broadband technology needs to be seen as a way of
enabling further business, service and competitive advantage rather than viewed simply
as an alternative communication technology. Both tangible (decreased cost / increased
productivity) and intangible (increased creativity) benefits are critical for companies to
understand.
Few good broadband case studies exist as references.
Few transition plans exist to help companies move from internally based IT management
systems to a cloud based model.
The importance of website interactivity is undervalued by Pennsylvania manufacturers as
a whole.
Recommendations
Overall, Pennsylvania’s small to medium-sized manufacturers need to be able to assess where
they are on the digital continuum from established to evolving broadband applications, where
they need to be in order to maintain or leverage competitive advantage in their marketplace and
how to manage the transition and the inherent risks/security vulnerabilities. Rapidly advancing
markets driven by OEM/customer requirements and technologies, such as 3D Printing, will
transform how manufacturers use broadband and their resulting IT infrastructure needs. Tools
and polices need to be developed to help Pennsylvania’s small to medium-size manufacturers
(98% of the PA’s total manufacturers) transition to new business models.
Based on this exploratory study, TrendScape Innovation Group (TSIG) offers the following
seven recommendations for the IRC Network, the Commonwealth of Pennsylvania and the
NTIA:
1. Develop detailed and nuanced case studies that can help PA manufacturers better understand
the business value of digital technologies and the potential for broadband to enhance their
competitive advantage;
2. Develop an assessment tool that can help individual PA manufacturers determine the
strategic potential for digital technologies in their business;
3. Develop an assessment tool that can help individual PA manufacturers understand their
readiness to adopt digital technologies. Supplement this assessment with training on the high
value add areas;
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4. Provide training around security vulnerabilities that may be introduced through the use of
digital technologies. This training should include best practices about risk mitigation and
should emphasize the responsibilities of both the service provider and the PA manufacturer;
5. Create networks of key PA manufacturers that are using digital technologies to support their
production, operations, communications and innovation strategies. Actively engage and
grow this network by linking them to external resources such as cloud based services, remote
high performance computing and experts in advanced modeling and simulation;
6. Focus website upgrade projects on enhancing the interactivity between manufacturers and
customers on multiple levels. Web tools must become more interactive. Mobile platforms
and social media should be given careful consideration; and
7. Consider updating Pennsylvania’s policies regarding broadband upload and download speeds
to make them current with emerging national trends and enable regional competitive
advantage.
In continued support of efforts to develop effective tools and policies enabling broadband
implementation, further work is needed to:
Clarify the Level of Understanding Regarding Broadband Impact: A relatively high
percentage of surveyed manufacturers indicated no perceived value to broadband. Also,
inconclusive response to broadband effectiveness opinion statements suggests either an
ambivalence or lack of knowledge about broadband impact. Based on these preliminary
indications, manufacturers do not see the value in broadband or don’t really understand
its potential value. Confirmation and clarification of the level of understanding may be
influential to the development of appropriate tools aimed at supporting broader adoption.
Understand Motivational Factors: Manufacturers indicated that they adopted IT for both
internally and externally driven reasons. While beyond the scope of this study, it would
be interesting to determine how different motivational factors affect both the type and
timing of broadband technology adoption. A better understanding of motivational factors
may potentially be beneficial to not only predicting but also supporting adoption.
Understand Use of Multiple Internet Connection Types: In the current study, we did not
ask respondents who had multiple connections to the Internet how they used them or
whether or not they were complimentary or competing. In terms of future possibilities
for effective use of broadband, a better understanding of how companies balance fixed
versus mobile connectivity would be valuable.
5
OVERVIEW
Motivation
This project was financed by a State Broadband Initiative (SBI) grant from the U.S. Department
of Commerce, National Telecommunications and Information Administration (NTIA), under the
administration of the Commonwealth of Pennsylvania, Governor’s Office of Administration
(OA) in partnership with the Department of Community and Economic Development (DCED).
This report was commissioned by Pennsylvania’s IRC Network, Inc. (IRCN) a system of seven
manufacturing extension programs focused on enhancing Pennsylvania’s global leadership in
manufacturing. The study’s objectives are to better understand best practices relative to
broadband use within the manufacturing sector, identify trends and industry perceptions relative
to broadband use across Pennsylvania-based manufacturers and to craft sound recommendations
on how manufacturers can leverage broadband technology for competitive advantage.
Specifically, this study had the following primary objectives:
Identify successful broadband private and public initiatives targeted toward the
manufacturing sector from across the nation;
Identify manufacturer success stories and best practices from across the nation;
Assess the current state and overall impact of broadband utilization within the PA
manufacturing sector;
Identify potential future states and opportunities that broadband technology represents;
and
Identify barriers and challenges faced by manufacturers in assessing broadband
technology.
The findings of this study are also intended to inform state and federal policy development
around broadband and technology-based economic development.
Study Design
The study had a four-part design: (1) assessment of secondary research studies; (2) a web-based
survey to collect information about the state of PA manufacturers’ knowledge of and use of
broadband; (3) focus groups and one-on-one interviews with key manufacturers located within
the state to ascertain details about their use of broadband, the challenges associated with
broadband use and the benefits derived from the leveraging of broadband technology; and (4) the
integration of all of these findings into recommendations for potential activities that each
regional Industrial Resource Center (IRC) might undertake and that state or federal policymakers
might consider to accelerate the adoption of broadband technologies and their positive impacts
on PA manufacturers’ competitiveness.
TrendScape Innovation Group (TSIG) provided assistance on this project including an
assessment of secondary research and reports on the use of broadband both in PA and
nationwide, web-based survey design which was then executed by the IRCN and each individual
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IRC, assessment of the web-based survey data collected, design of a one-on-one interview
survey to clarify and/or expand on the web-based survey findings, one-on-one phone interviews
with manufacturers and the integration of all of these into a final report assessing the state of
broadband use among PA manufacturers.1
Organization of this Report
In addition to the Executive Summary and Overview, this report contains four sections and
Appendixes.
Section 1 highlights the findings of the web-based survey, with an emphasis on the
characteristics of the respondents, their knowledge about the potential of broadband, their use of
broadband in internal business or production operations and in their Internet sales or support. In
this section, we also note any potential relationships between use and company size or company
revenue. Some of the data provided in this section are drawn from IRC-based engagements and
other surveys. This section also details PA manufacturers’ knowledge of broadband and its
potential impacts.
Section 2 describes key findings from the one-on-one interviews. This section also includes
relevant findings from a 2013 study of Pennsylvania’s manufacturing sector conducted by Dr.
Edward Hill of Cleveland State University.2 Central to this section is an in-depth case study that
highlights one of the interviewed company’s highly effective uses of broadband to support its
business.
Section 3 discusses the potential future state of manufacturing and what this might mean for the
usefulness of broadband in supporting competitive advantage. This section draws from
extensive work done by Dr. Petrick studying the manufacturing sector over the past decade.3
This section also highlights some of the challenges with the use of broadband, particularly in the
area of security, which is becoming a growing concern.
Finally, Section 4 draws conclusions about the state of broadband knowledge and use among PA
manufacturers. This section identifies key knowledge and/or expertise gaps today and into the
future and suggests ways in which the IRCs and/or state and federal agencies might develop
programs to help PA manufacturers bridge these gaps.
1 The initial TSIG role was to be one of advisor, with the IRCN providing much of the staffing for actual execution
of tasks. As the project progressed and IRCN project leadership changed hands, TSIG’s role increased. 2 Edward Hill (2013) Pennsylvania’s True Commonwealth: The State of Manufacturing Challenges and
Opportunities 3 See for example, Petrick, I.J., Maitland, C.F., Pogrebnyakov, N. and Ayoub, P.J. (2007) Effective Supply Network
Practices. Final report to the Manufacturing Extension Partnership Program, National Institutes of Standards and
Technology, December 2007; Frank, M., Wysk, R. and Petrick, I.J. (2002) Managing Product and Process Decisions
in Early Product Development. International Association for Management of Technology 11th Annual Conference,
Proceedings. March 2002.
7
The Appendixes provide detail on:
select public and public-private partnership activities related to promoting advanced
manufacturing and/or broadband use (Appendix 1), and
the web-based survey content (Appendix 2).
SECTION 1: The Web-Based Survey of PA Manufacturers
1.1 Survey Design
The web-based survey4 was intended to gather an overview of PA manufacturers’ knowledge
about broadband and their uses of Information Technology (IT) in general. The survey objective
was to identify patterns of broadband use and impact. The survey design used a cascading model
where answering “Yes” to a particular category of IT use would result in a subsequent pop-up
window (or set of pop-up windows). If the respondent did not indicate a particular IT use, they
would not be presented with that pop-up window. A similar approach was used throughout this
survey. This design minimizes the number of questions that are not relevant to any single
participant while also reducing the time to complete.
1.2 Results
Demographics of Respondents A total of 71 responses were attempted with 42 respondents completing the entire survey. Thus,
each question is not necessarily based on the same number of respondents. Since this was an
exploratory effort, TSIG believed that it was more beneficial to include all responses regardless
of whether or not the full survey was completed. Readers are asked to pay special attention to
the number of respondents for each individual question when assessing the results presented.
The majority of respondents reported
being in a senior leadership position.
Of the 44 respondents who reported
their position or job title, the majority
(30) were senior leaders (Owner, CEO,
President, Vice President, and
Operations Manager). The remaining
respondents included IT managers (6),
finance officer or manager (3), staff
support (3), human resources (1) and
marketing (1). See Figure 1.
4The survey tool, Qualtrics, (qualtrics.com) was used to gather results from respondents and to later conduct
statistical analysis.
Senior Leaders
IT Managers
FinanceManagersStaff Support
HumanResourcesMarketing
Figure 1: Survey Respondent Positions
8
In terms of the type of manufacturing
industry, the majority of respondents
reported metal or plastics fabrication (38 of
45 responding to this question). The
remaining respondents represent electronics
(2), services and consulting (3) and graphic
arts and communication (2). Thus, the
results in the following sections can be
considered to be representative of PA
manufacturers.5 See Figure 2.
Of the 47 respondents that gave details
about company size, 60% have
between 1-50 employees and 34%
have between 50-250 employees.
Only 6% of the respondents indicated
that they have between 250-500
employees. This is consistent with
PA manufacturers in general, and so
this sample can be considered
representative of the larger PA
population of manufacturers. See
Figure 3.
In terms of revenue, the 42
respondents who provided data about
their company’s revenues are normally
distributed. This suggests that a large number of either very small or very large companies did
not skew the findings.
Information Technology Use The majority of companies in the survey are using information technology (IT) in some form or
another with only three companies not using IT at all. See Figure 4. Of the 63 responses to this
question, 56 (89%) report using IT for general business support, 49 (78%) use IT for
manufacturing planning or operations and 40 (63%) use IT for internet sales or support. Recall
that a respondent may select more than one response for this question. It is interesting to note
that statistical analysis of IT use indicates that there is no correlation between IT use and either
company size or company revenues.6
5 Note that no attempt was made to assess the demographics of non-respondent companies. Since the survey was
administered as a web-based survey, it is not possible to determine whether non-responding companies are not
Internet savvy or simply didn’t take the time to participate.
6 Statistical significance in exploratory studies for correlations is typically established with a p-value of .10 or less.
This generally is interpreted as “The patterns observed can be attributable to chance with a 10% or less probability.”
Metal/PlasticFabricationElectronics
Services &ConsultingGraphics &Communications
Figure 2: Respondent Company Sector
Figure 3: Respondent Company Revenue Distribution
9
General Business Support From a business support perspective, IT is used to support a wide range of services within the
internal operations of the firm. There were a total number of 51 respondents who indicated
specific ways in which IT supports their general business practices.
Manufacturing Planning or Operations
While IT is used extensively for manufacturing, planning/scheduling and supply chain
management, it is used
less extensively for
modeling, simulation
and advanced design
and production. There
were a total of 45
respondents who
indicated specific ways
that IT supports their
manufacturing
activities. See Figure
5.
From a broadband
perspective, the need
for this technology is
highest in complex
modeling, simulation
and 3D design and
production. Moreover, it is the transmission of large amounts of data over the Internet or
processing of data in the cloud that warrants broadband.
0 10 20 30 40 50
Accounting
Human Resources
Word Processing
CRM
Sales & Marketing
Figure 4: IT Uses
Figure 5: IT Uses in Manufacturing Planning or Operations
0 10 20 30 40 50
Accounting
Human Resources
Word Processing
CRM
Sales & Marketing
0 5 10 15 20 25 30 35
CAD
CAM
CAE
Material Handling
Supply Chain Mgmt
Inventory/Warehouse Management
Shop Floor Data
Scheduling
Simulation
3D Mnfg Design
3D Mnfg Production
10
Internet Sales or Support Of the 34 respondents who
reported specific ways in which
IT is used for Internet sales or
support, all 34 report having a
website. See Figure 6. About
40% have an Internet catalog
and/or have online ordering and
report using social media, but it
is unclear how interactive any of
these activities are. Online
product customization (3
respondents for 9% of those
responding to this question)
would be the most interactive
activity between the company
and its customers and/or suppliers. Companies that anticipate using more video to describe their
products or their manufacturing processes may find that broadband facilitates communication
between their websites and their customers and/or suppliers.
Motivation Fifty-three participants responded to this question. Respondents indicate that they are adopting
IT for both internal (49 respondents for 92% of those responding to this question) and external
reasons (37 respondents for 70% of those responding to this question). While it is beyond the
scope of the web-based survey, it would be interesting to learn more about how company
motivations to adopt IT were related to what the company did and when they did it. There is no
indication of time of adoption in the current survey. Note that for both internal and external
motivations, respondents could select more than one response.
Internal Reducing costs (85% of the 44
respondents who continued to provide
details about their motivations)
appears to be the main reason that
companies are adopting IT, but
promoting internal collaboration (84%
of the 44 respondents) is a close
second. Interestingly, IT adoption
does not appear to be heavily driven
by a desire to reduce headcount. This
suggests that, at the present time, IT
has already been used to automate
what can be automated. See Figure 7.
0 10 20 30 40
Website
Internet Catalog
On-line Ordering
On-line ProductCustomization
On-line Shipping/DeliveryTracking
Social Media
Figure 6: IT Use for Internet Sales or Support
Figure 7: Internal Motivations for Adopting IT
0 10 20 30 40
Reduce Costs
Reduce Headcount
Promote InternalCollaboration
Promote ExternalCollaboration
Expand to New/GlobalMarket
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External Twenty-nine respondents provided
additional detail about how their
motivations to adopt IT were
influenced by external factors. For
those companies that reported being
motivated to adopt IT by customers or
suppliers, nearly 80% adopted IT to
submit bids and participate in sales
opportunities as required by their
customers. Nearly 60% indicated that
their customers wanted them to adopt
IT to better collaborate on design,
innovation and/or testing. Suppliers
were the motivating factor for IT adoption in approximately 40% of adoption decisions. See
Figure 8. According to one Williamsport manufacturer who participated in a recent focus group,
“Our IT has extended to our customers’ IT. We developed their order forms within their
systems. If we didn’t bridge that gap, we could never have gotten the business because they
couldn’t do it themselves. The integration of that supply chain lets you reach right into your
customers’ operation and try to figure out what they need.”7
Internet Connection, Broadband Familiarity & Effectiveness of Use When asked what type of Internet connection the company uses, 49 respondents noted their type
of connectivity. Note that a respondent could
select more than one type of Internet
connection. At the present time, the majority
of respondents (59%) indicated that they are
using cable (e.g., Comcast, Time Warner,
Blue Ridge Communications, etc.). It is
interesting to note that the second highest
connectivity was 3G/4G/LTE Mobile Phone
(37%). With the growth of mobile devices in
all business and consumer settings, this might
be expected to be a higher percentage in
coming years. See Figure 9.
In the current web-based survey, we did not ask respondents who had multiple connections to the
Internet how they used these multiple connections or whether or not they were complimentary or
competing. In terms of future possibilities for effective use of broadband, a better understanding
of how companies balance fixed versus mobile connectivity would be valuable.
A recent assessment of over 60 companies that have received support through Pennsylvania’s
SBI-funded Broadband Technical Assistance Micro-Grant Program suggests that the cost of
7 From Hill, 2013, Pennsylvania’s True Commonwealth: The State of Manufacturing Challenges and Opportunities
0 5 10 15 20 25
Customer RequiredAdoption for Sales/Bids
Customer Required for Co-design, etc.
Supplier Required
0 10 20 30 40
ADSL
Cable
Satellite
Wireless Broadband
High Speed Leased Line
3G/4G/LTE Mobile…
Figure 8: External Motivations for Adopting IT
Figure 9: Internet Connectivity Type
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access to broadband varies widely.8 Cost appears to be associated with speed of transmission
and may also depend on geographic location. For example, the lowest monthly cost reported
was $10/month with download speeds of less than 200 kilobytes per second (kbps) and uploads
of less than 700kbps. Similar upload and download speeds were also quoted at $25 and $50 per
month with different carriers. Even in download and upload megabytes per second (mbps), costs
vary widely with 10mbps up and 10mbps down at a high of $895/month and the highest reported
cost for up to100mbps up and 10mbps down at a whopping $1,100 per month.
As a follow-up to the connectivity question, we asked respondents specifically about their
knowledge of broadband with a companion question about why they made that specific choice.
Table 1 summarizes these results. Note that there is no statistical correlation between broadband
use and company size or company revenue.
Table 1: Broadband Familiarity
The majority of the 50 respondents indicate that they are using broadband for some or all of their
Internet communication while only 4 respondents indicated that they did not understand the
value of broadband. For those who either decided not to use broadband or who tried it and then
stopped using it, the main reasons seem to be a perceived lack of value or the loss of/lack of
expertise to fully utilize broadband connectivity. Note that there is no statistical correlation
between broadband familiarity and company size or company revenue.
For those companies using broadband, we attempted to better understand the value that they
were getting from this connectivity. We asked a series of opinion questions, scored on a 5-point
scale. Thirty-five respondents provided their insights. Table 2 details their responses.
8 Broadband Technical Assistance Micro-Grants summaries provided by Chris R. Wilusz, IRC Network 2013
Familiarity/Use Respondents Percent Reasons
No, I don’t know why broadband would
be useful.
4 8%
Yes, my company is aware of
broadband, but we’ve chosen not to use
it.
6 12% Too expensive to initiate
No apparent value over our current
communication networks
Worried about security breach
We don’t have any employees with expertise to
take advantage of this
Yes, my company has tried broadband
but has since stopped using it.
2 4% Too complicated
We lost the expertise needed to effectively use
broadband due to employee turnover
Yes, my company is using broadband
for some or all of our Internet
communication needs.
38 75%
Total 50 100%
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Table 2: Use of Broadband and Perceived Effectiveness of Use
Statement Strongly
Disagree
(1)
Disagree
(2)
Neither Agree
nor Disagree
(3)
Agree
(4)
Strongly
Agree (5)
Mean
Score
My company has been able to more
effectively serve existing customer
needs due to broadband connectivity.
0 1 6 18 10 4.06
My company has been able to add
new customers due to broadband
connectivity.
0 9 12 11 3 3.23
My company has been able to more
effectively serve existing suppliers’
needs or find new suppliers due to
broadband connectivity.
0 5 6 17 7 3.74
My company has realized cost
savings due to broadband
connectivity.
0 5 10 14 6 3.60
Broadband requires specialized IT
experts.
2 10 11 9 3 3.03
Broadband has enabled my company
to more effectively use the Internet
for sales and support.
0 6 6 19 4 3.60
Broadband has enabled my company
to design, develop and/or test new
products for customers.
0 9 12 13 1 3.17
Broadband is critical for my business
to succeed.
1 5 3 12 14 3.94
In these opinion questions, there is no statistical correlation between company size or company
revenue and the opinions expressed by respondents. Broadband is perceived as being positively
related to effectively serving existing customer needs and effectively meeting supplier needs. In
addition, there is a perception that broadband has enabled the company to more effectively use
the Internet for sales and support. There is also a perception that broadband is critical to business
success. The areas where broadband is considered highly positive (compared to all other
responses) are indicated in grey shading in Table 2.
Several of the opinion statements are inconclusive (agree vs. disagree) since there are quite a
high number of “neither agree nor disagree” compared to other responses. This suggests either
ambivalence about broadband impact or a lack of knowledge about broadband impact. The web-
based survey is not able to differentiate between these two alternatives and additional study is
needed to clarify this.
14
Perceived Benefits of Broadband and Future Expectations Forty-two participants responded to
the question about perceived
benefits. See Figure 10. Most of the
respondents believe that broadband
contributes to a combination of
productivity gains, efficiencies and
cost reductions.
Interestingly, 17% of respondents
saw no perceived value to
broadband. This suggests either
respondents don’t see a value to
broadband or they really don’t understand its potential value. Additional work in this area is
certainly needed to clarify this point.
When asked whether or not they believe that a broadband connection will be important in the
next five years for them to conduct their business, 70% (32 of 46) of respondents indicated that
they believe that a faster connection will be needed while 30% believe that existing connectivity
speeds are adequate.
An Erie-based manufacturer noted, “The manufacturing of tomorrow is going to be here faster
than it was in yesteryears. You have to stay ahead of that …to stay effective. It’s that technology
moving forward that we, as company owners, have to watch and embrace or be left behind and
we can’t even imagine it.”9
The 32 respondents that indicated a faster speed will be needed in the future believe that the
pressure for this speed will come from customers (91%), suppliers (44%) and their own
engineering design staffs (56%), purchasing staff (53%) or sales staff (44%).
SECTION 2: One-on-One Interviews
2.1 Focus
This effort was initiated to supplement the results gained from the web-based survey. The web-
based survey was intended to identify patterns of broadband use and impact. What we found, in
general, is that PA manufacturers are aware of broadband overall, but are less equipped to
understand the potential contributions of broadband connectivity to their business operations or
to their interactions with their suppliers or customers.
In the one-one-one interviews, we were seeking to determine (1) whether or not companies were
seeing value through broadband; (2) what motivated companies to adopt broadband; (3) what
challenges these companies faced in using broadband and (4) what company leaders thought the
9 From Hill, 2013, Pennsylvania’s True Commonwealth: The State of Manufacturing Challenges and Opportunities
0 10 20 30 40
Increased Sales
Reduced Operational Costs
More Efficient Procurement
Improved Productivity
Better E-learning
No Value
Figure 10: Perceived Benefits to Broadband
15
future of broadband might be in general and for their company. We used open-ended questions
to elicit the most information from interviewees. Thus the interview protocol was developed at a
high level with the intent that a conversation would emerge between the interviewer and the
interviewee. In exploratory research, it is often the unanticipated information that is most useful
in framing future problems and/or needs.
Ultimately, five companies participated in one-on-one interviews:
Die-Tech, Inc., a precision metal stamping company that makes micro to small parts.
Videon Central, Inc., an engineering services company that specializes in in-flight
entertainment and high end home entertainment systems.
Quality Mould, Inc., a small machine and mould making shop that designs moulds for the
glass, power generation and mining industries.
Venango Steel, Inc., a job shop that specializes in metal parts.
Lean Green, LLC, a start-up energy management company that leverages broadband as
part of its business model.
These five companies represent the variety of manufacturers that we encountered in the web-
based survey, ranging from established companies making specialized parts and moulds to an
engineering services company and a start-up. While the numbers are small, these companies
reflect the profiles of the companies we encountered in the web-based survey.
2.2 High Level Findings
With such a small sample, it is difficult to determine key themes since the uses of broadband
vary widely among the companies – three of the five are only using broadband for e-mail,
choosing to keep any of their computer-based applications in-house. Moreover, wirelessly
enabled access is rare for most company operations to date.
Thus, we identify three high level observations:
The use of broadband varies widely among companies and is unique to their business and
management environment.
Technical/engineering savvy companies are more likely to understand the potential of
broadband and to use its capabilities for multiple areas of the business; and
Traditional metal working shops, while reliant on computer applications such as CAD,
CAM and even CAE, do not access these using broadband or the cloud. The use of
broadband in these companies is limited to e-mail communications.
There are also some takeaways from the one-one-one interviews. Specifically,
Broadband appears to hasten the transition between systems. Moving to the cloud offers
companies the ability to attain current technology and software capabilities without
investing in these as licenses and purchases. Instead, cloud computing enables
companies to “buy access” to needed capabilities that are then supported on the backend
by the service/cloud provider. This capability insures that companies have the most up-
16
to-date hardware, software and security protection.
The tangible benefits to broadband – decreased cost and increased productivity – are
important, but there are intangible benefits that are also critical to note. Intangible
benefits include increased curiosity among existing technical staff as they play with
always-new software and can use simulations to play “what-if” games with everything
from design to materials tradeoffs to manufacturing specifications.
A very important tangible value that is often underestimated is the ability to keep critical
talent as these employees want to (or need to because of location) work from home. As
distributed work patterns become more prevalent, particularly among knowledge workers
(designers, engineers, and other professionals), the ability to support their work in a
seamless way will be increasingly enabled by broadband.
These observations, with respect to the one-on-one interviews, are consistent with national trends
and what Dr. Petrick has seen in other contexts. While there may be pockets of computer
sophistication with respect to modeling, design, simulation and manufacturing, for example,
most companies see this as part of their intellectual property (IP) and thus try to closely guard it,
keeping this data inside of its own firewalls. Since broadband is an enabler of data transmission
and sharing, those companies that maintain this complex data within their own walls have little
need for broadband.
2.3 Case Study: Videon Central, Inc. Sets an Example in Broadband Use and Information Technology Readiness for PA Manufacturing SMEs
Videon helps media technology firms simply, quickly and cost-effectively move their digital
media initiatives from concept to market. With over 30 million devices using Videon’s
streaming media solution, DVD and Blu-ray technology, Videon is a proven partner and supplier
to the world’s leading technology companies. Based in State College, Pennsylvania, Videon
Central, Inc. was founded in 1997 and is a privately held company.10 The company’s
appreciation for technology, along with its expert and intuitive understanding of software
development, combine for a winning recipe in leveraging cloud-based IT systems for business
productivity and product innovation.
About Videon Central, Inc. Videon Central, Inc. is an engineering and services company that develops, programs and tests
middleware for media players and consumer electronics. The company also designs, builds and
manufactures some of the devices that use that same software.11 Videon often finds itself
working in partnership with the semiconductor industry to develop software solutions to
maximize the microchip’s value, helping large OEMs bring to market new designs, software,
licenses, support services or offering complete product development lifecycle support to vertical
market OEMs. These partnerships and collaborations, combined with deep technical domain
knowledge, help Videon deliver innovative media solutions to customers all over the world.12
10 For more information, please visit http://www.videon-central.com or call (814) 235-1111. 11 Videon Central, Inc., Company, http://www.videon-central.com/company 12 Videon Central, Inc., Why Videon?, http://www.youtube.com/watch?v=nTyatCiaoUc
17
Along with its brilliant engineers, Videon Central relies heavily on its managed information
technology infrastructure and cloud-based applications to keep the business ever creative and
productive.
Managed Infrastructure and Cloud-based Applications Videon has been using broadband connectivity since it came to the region about 15 years ago. It
was first used to establish and support a virtual office environment. Asterisk, the software
solution the company uses for Voice over IP, allows employees to have a “desk phone” and
phone number anywhere they might be, whether it’s in Pennsylvania, Arizona, California,
Virginia, Ohio or even Kenya.
In its current state, Videon uses the services and expertise of Flashpoint Informatics, a local
cloud-hosting provider, to manage the company’s servers, infrastructure and the virtual machines
that run Videon’s business and shop floor applications. Videon uses Google Apps for email,
Hangouts, calendars and documentation; manages its engineering designs and software code
through SVN; uses FTP for large file hosting and transfer and tracks customer, order, product
and project data through hosted ERP systems such as Accpac, MIsys and Sage.
Prior to this, each application was in its own silo, cut off from the larger business or production
context. As these systems moved from being hosted in-house to a managed cloud-based solution
made possible through broadband connectivity, the ability to integrate these applications and
have all business and product information in a single database became a clear strategy. Today
that system powers all of Videon’s internal communication and project tracking.
The Culture and Business Model of Curiosity, Creativity and Collaboration Videon’s experience and expertise with IT systems can be traced back to its history of
developing custom in-house applications to support business and manufacturing activities. From
a company born out of electrical and computer engineering, the ability to create software
solutions that were specifically sensitive to the company’s immediate internal needs became a
routine operation. In a recent interview, Videon CTO Jim Condon recalled an example:
“MIsys is our inventory package and we have [an employee] who hated it. […] Matt
didn’t like MIsys’ interface so he created ‘Mattsys' which is a C# program to pull out the
information we needed from MIsys easier. He did it on his own time, produced it,
brought it in and we use it here as a key project.”
Creative solutions such as this are not only convenient, but can generate immediate business
value. In one example, an existing customer exposed an external portal for ordering projections
to its suppliers. Videon was able to integrate their existing information systems with this
customer’s system in order to create a workflow that helps optimize inventory—previously,
Videon relied solely on word of mouth to predict inventory levels.
Wider system integration allows Videon to automatically track products from order to shipment
and provide a Statement of Conformance (mandatory for some products) that states officially
that a particular product is the exact same product that has been shipped every time before. For
18
in-flight entertainment systems (a highly-regulated product), this automatic recording and
reporting helps Videon effortlessly deliver on strict AS-9100 certifications.
This type of system integration and collaboration is critical to the continued success of Videon’s
business.
Controlling the Pace of Development Another one of Videon’s key applications is Jira, a project and resource tracking tool from
Atlassian Software Systems that three of its largest customers also use. Typically, Videon would
be at the mercy of these companies’ often large and bureaucratic systems and processes—forced
to accept a process that might not work for a small company, leading to increases in overhead
and losses in productivity. Instead, Videon uses the customer’s Jira application, integrated with
their own system, as the primary means for tracking and communication—information is
available in real time to Videon and the customer.
For example, one of Videon’s airline customers requires a 10-day turnaround on service requests.
Previously included in that 10-day window was the time it took for the customer to approve
certain steps. Because it went undocumented before the Jira integration, Videon was often
penalized for being late when in reality, the delay was due to the customer’s process. Now if
Videon is waiting for the customer to respond, the waiting time is tracked and not counted
against their service agreements.13
SECTION 3: The Future of Manufacturing and Its Implications for the Need for Broadband
3.1 3D Printing and Advanced Manufacturing
Today we see manufacturing as a collection of companies arranged in a supply chain that begins
with raw material suppliers and where product flows through several tiers of suppliers to the
original equipment manufacturer (OEM) and to the customer. Most traditional PA
manufacturers are organized to support this model. However, with the advent of 3D printing
(also called additive manufacturing), a disruption to the traditional supply chain model is
coming.14 This disruption is already being felt in products that are polymer based and will occur
in the coming 5-7 years in metal-based products. Already, key producers are experimenting with
3D printing capabilities and the costs of the technology are dropping while their capabilities are
improving dramatically.
The emergence of 3D printing/additive manufacturing will significantly change the dynamics of
competition and will also introduce new entrants into the manufacturing sector. All of these
activities will be heavily based on advanced computing, large-scale data transmission, simulation
13 Jim Condon and Micah Willy, personal interview, June 2013 14 See Petrick (2013) The Future of Manufacturing, and Petrick and Simpson (2013) How 3D Printing Disrupts
Manufacturing: How Economies of One Creates New Rules of Competition, Research Technology Management.
19
and collaborative development. All of these activities suggest a growing need for broadband
connectivity in the future.
While many PA manufacturers are relying on broadband for e-mail only, in less than a decade,
broadband will be THE key enabler to competition for increasingly customized products aimed
at increasingly segmented niche customers. The future is not here yet, but it is soon upon us.
3.2 Considerations for Data Security and Intellectual Property in the Advent of Digital Manufacturing
With the coming shift toward advanced manufacturing methodologies featuring digital modeling,
simulation and analysis and processes driven by cloud-based applications and services, small and
medium-sized enterprises (SME) will face a dual security threat—protecting both business data
and product data (intellectual property). However, the economics and service-oriented nature of
cloud-based applications and managed infrastructure should help alleviate these stresses by
shifting concern to the service provider.
Rely on the Cloud for Security and Expertise In choosing to use a cloud-services provider, manufacturing SMEs are not only outsourcing the
hardware and software to run their business to an external vendor (the more obvious, tangible
things), but are also outsourcing the maintenance and security of the systems—more intangible,
but extremely valuable for companies that might not have the resources for a full-time IT and
security expert. Instead, manufacturing SMEs should rely on the collective experience and
expertise of their vendor, especially ones who have met strict industry and ISO standards for data
security. This makes the selection of a cloud-based services vendor a critical issue. In addition,
the roles and responsibilities of the SME and the cloud-based services vendor need to be fully
understood and firmly established.
Digital Intellectual Property Considerations As design and modeling move from physical artifacts to digital files, the threat of losing data in a
security breach increases. Consider the recent story of Internet intruders trying to gain access to
highly sensitive data from the Pentagon’s Joint Strike Fighter project through the systems that
help integrate all its contractors’ supply chains (such as BAE Systems, Northrop Grumman and
Lockheed Martin).15 Though these companies and the Pentagon deny the attacks were successful,
it represents an increasing trend in digital attacks and the need for more advanced data and
computer security.16
As digital tools for design and manufacturing become more sophisticated, so do the tools for
stealing intellectual property. Consider a report recently released by Gartner Group of its top
predictions for IT organizations for 2014 and beyond. Gartner predicts that by 2018, 3D printing
(here we can assume Gartner is talking about everything influenced by the rise of additive
15 Mount, Mike, Hackers stole data on Pentagon's newest fighter jet, CNN,
http://www.cnn.com/2009/US/04/21/pentagon.hacked/ 16 Wong, Edward, Hacking U.S. Secrets, China Pushes for Drones, NY Times,
http://www.nytimes.com/2013/09/21/world/asia/hacking-us-secrets-china-pushes-for-drones.html?_r=0
20
manufacturing, including digital modeling and simulation) intellectual property losses globally
will total at least $100 billion per year.17
SECTION 4: Implications for the Need for Broadband & Programs that Will Support its Adoption, Implementation and Successful Execution
While the preliminary data from various sources may be slightly different, still a picture emerges
wherein PA manufacturers are not prepared for the future of manufacturing that will be enabled
by broadband connectivity and digital technologies. Few manufacturers that we have surveyed
or talked to truly grasp the potential for broadband-enabled data management, data transmission
and storage and communications. Proven, mature applications such as email are more broadly
adopted than evolving ones. This is no different than we might expect with the evolution and
adoption of any new technology. However, the critical difference is the relative speed of
broadband technology evolution and the step change and paradigm shift implications to current
business practices. PA manufacturers need to fully understand and be able to predict the
potential paradigm shift impacts and opportunities relevant to their particular business.
Broadband technology needs to be seen as a way of enabling future business, service and
competitive advantage rather than viewed simply an alternative communication technology
solution. As a result, TSIG sees several key gaps that need to be addressed:
PA manufacturers, as a whole, have not fully evaluated the potential that digitally
enabled manufacturing presents to their businesses; and thus, do not appreciate the need
for high speed communications or data transmissions that will require broadband
communication.
This suggests a need for education programs focused on digital manufacturing, the
competitive dynamics of digitally enabled business models and the building blocks that
will be needed in the hardware and software infrastructure.
There is a need for both strategic and tactical frameworks in which to consider digital
manufacturing. We have seen few manufacturers able to link the strategic to the tactical
operations and this will be essential to future successes.
Supply chains will also be influenced by digital technologies and PA manufacturers
will need to position themselves more strategically. A clear understanding of alternative
technology solutions will be required to support both supplier and customer interactions.
There are few good case study examples that PA manufacturers can reference to better
understand how IT, digital manufacturing and broadband technologies can impact a
manufacturing enterprise.
There is a need for clear case studies in multiple sectors, based on companies of a
17 Gartner, Inc., Gartner Reveals Top Predictions for IT Organizations and Users for 2014 and Beyond,
http://www.gartner.com/newsroom/id/2603215
21
range of sizes and revenues and targeted to a range of manufacturing types to better
portray the implications of digitally based technologies on manufacturing.
New metrics need to be developed that can capture the value added by digital
technologies, specifically broadband. Both tangible and intangible value needs to be
explored.
There are few transition plans presented in the literature that help companies move from
an internally-based IT management system to a cloud-based IT model.
Models need to be developed that help PA manufacturers assess what their needs are
for future computing.
Maturity models need to be developed that help PA manufacturers better understand
the progression from internally-based to cloud-based IT management systems. These
models would also help PA manufacturers determine their “readiness,” helping them to
also understand potential investment needs around hardware, software and personnel.
A better understanding of the security implications must be developed. Information
and training about privacy and security need to be articulated. Key vulnerabilities will
need to be identified with risk mitigation plans for each. This will require a level of IT
sophistication beyond what many PA manufacturers possess presently.
While most PA manufacturers have a website, the level of interactivity and the
importance of this in the future is undervalued. One-way communication (from the
company to the customer) and data pull (the customer seeks information rather than
having it provided to him/her) are becoming less compelling. Web tools must become
more interactive and as this interactivity increases so will the need for broadband
(particularly around video).
Projects that include web upgrades should focus on interactivity between
manufacturer and customer on multiple levels.
Mobile platforms should be carefully considered as a major target for interactivity.
Social media programs should be developed that include multiple formats. Tools
should be developed to help manufacturers better understand the relationship between the
desired interaction, the messaging and the device/platform. Social media savvy will
become an expected capability in the future.
Pennsylvania policies around broadband that were developed several years ago are now
behind emerging national, state and public-private partnership trends with respect to
upload and download speeds.
Serious consideration needs to be given to the targets for upload and download speeds
that PA manufacturers will need (and that PA government programs will support). While
22
upgrading to broadband may make a PA manufacturer more competitive relative to other
PA manufacturers who have not upgraded, it may not be sufficient to guarantee
competitive advantage at a regional or national level given what other states are targeting.
As the IRCN considers these needs, it is important to also assess the capabilities at each IRC.
Current efforts to improve competitiveness and innovativeness among PA manufacturers will
need to be augmented to include digital strategies. While not every manufacturing company will
become solely digital, these enterprises will successfully compete with the more traditional
economies of scale, physically-based manufacturing models. This will require a fleetness of foot
for both manufacturing leaders and those economic development agencies that support them.
Such fleetness of foot may require re-staffing and retraining for both manufacturers and the
economic development staff that support them.
Based on our exploratory study, TSIG offers the following seven recommendations for the
IRCN:
1. Develop case studies that can help PA manufacturers better understand the business
value of digital technologies and the potential for broadband to enhance their
competitive advantage. Because there is such a wide range of basic understanding
about broadband and its potential, these cases need to be diverse and nuanced to
provide PA manufacturers with insights.
2. Develop an assessment tool that can help individual PA manufacturers determine the
strategic potential for digital technologies in their business.
3. Develop an assessment tool that can help individual PA manufacturers understand
their readiness to adopt digital technologies. Supplement this assessment with
training on the high value add areas.
4. Provide training around the security vulnerabilities that may be introduced through
the use of digital technologies. This training should include best practices about risk
mitigation and should emphasize the responsibilities of both the service provider and
the PA manufacturer.
5. Create networks of key PA manufacturers that are using digital technologies to
support their production, operations, communications and innovation strategies.
Actively engage and grow this network by linking them to external resources such as
cloud-based services, remote high performance computing and experts in advanced
modeling and simulation.
6. Focus website upgrade projects on enhancing the interactivity between manufacturers
and customers on multiple levels. Web tools must become more interactive. Mobile
platforms and social media should be given careful consideration.
23
7. Consider updating Pennsylvania’s policies regarding broadband upload and download
speeds to make them current with emerging national trends and enable regional
competitive advantage.
In continued support of efforts to develop effective tools and policies enabling broadband
implementation, further work is needed to:
Clarify the Level of Understanding Regarding Broadband Impact: A relatively high
percentage of surveyed manufacturers indicated no perceived value to broadband. Also,
inconclusive response to broadband effectiveness opinion statements suggests either an
ambivalence or lack of knowledge about broadband impact. Based on these preliminary
indications, manufacturers do not see the value in broadband or don’t really understand
its potential value. Confirmation and clarification of this level of understanding may be
influential to the development of appropriate tools aimed at supporting broader adoption.
Understand Motivational Factors: Manufacturers indicated that they adopted IT for both
internally and externally driven reasons. While beyond the scope of this study, it would
be interesting to determine how different motivational factors affect both the type and
timing of broadband technology adoption. A better understanding of motivational factors
may be beneficial to not only predicting but also supporting adoption.
Understand Use of Multiple Internet Connection Types: In this study, we did not ask
respondents who had multiple connections to the Internet how they used them or whether
or not they were complimentary or competing. In terms of future possibilities for
effective use of broadband, a better understanding of how companies balance fixed
versus mobile connectives would be valuable.
24
APPENDIX 1: Broadband Programs and Examples of How Broadband Drive
Competitiveness in Manufacturing
This appendix highlights exemplary public and public-private partnership programs from across
the nation. The intent is not to be an exhaustive list of all programs, but rather to showcase the
diversity of programs that exist. This appendix also presents examples of the way that
broadband connectivity has enhanced the competitiveness of several manufacturers.
1.1 Public and Public-Private Partnership Programs
Several initiatives have been undertaken in the past several years to enhance broadband
connectivity. Many of these initiatives include building not only the infrastructure but also the
underlying capabilities that will be needed to take advantage of this infrastructure. Below, we
begin with Pennsylvania’s focus and then provide examples of national and state initiatives as
well as public/private partnership initiatives. What they all have in common is the desire to
hasten the adoption of broadband to yield competitive advantage for companies, often in
conjunction with creating a more connected citizenry.
Pennsylvania Act 183 of 2004 Pennsylvania has mandated that every city, town and municipality have access to high-speed
Internet connectivity through its Incumbent Local Exchange Carrier (ILEC) by 2015. High-
speed Internet connectivity, or broadband, is defined in Act 183 of 2004 as a communication
channel using any technology and having a bandwidth equal to or greater than 1.544Mbps
downstream and equal to or greater than 128kbps upstream. This program has been integral in
accelerating the deployment of a minimum level of broadband service to all geographical areas
statewide, particularly to those rural and remote areas whose only option may have been dial-up
or satellite.18
Broadband Stimulus Programs The American Recovery and Reinvestment Act (ARRA) of 2009 provided $7.2 billion to support
broadband projects in the categories of comprehensive community infrastructure deployment,
state broadband planning and mapping, public computer centers and sustainable adoption
programs. In 2010, the Commonwealth of Pennsylvania was awarded over $36 million in
broadband stimulus funding awards by the U.S. Department of Commerce, National
Telecommunications and Information Administration (NTIA) to support middle mile broadband
infrastructure deployment as well as broadband mapping and planning activities. In total,
broadband stimulus funding investments were made into 20 projects, which benefited
Pennsylvania entirely or in part.
The National Broadband Plan of 2010 Using a portion of the American Recovery and Reinvestment Act (ARRA) of 2009, the Federal
Communications Commission (FCC) outlined a plan to improve Internet access throughout the
country. The plan called for 100 million households to have access to connections that average
100Mbps downstream and 50Mbps upstream by 2020 with every community having access to
18 Pennsylvania Department of Community and Economic Development, Broadband Initiatives,
http://www.newpa.com/community/broadband-initiatives
25
symmetrical 1Gbps connectivity at its anchor institutions (universities, hospitals and/or public
institutions). During this same timeline, every American is to have access to broadband
connectivity, broadcasters are to open up their unused spectrum for wireless broadband access
and significant investments are to be made in emergency response networks and emerging smart
grid technologies.19
Chattanooga, Tennessee - the “Gig City” as a success story for municipal fiber Chattanooga, Tennessee is the first city to offer symmetrical 1Gbps fiber Internet connectivity to
all of its residents and businesses. The infrastructure that permits the 1Gbps service was
installed by Chattanooga's publicly owned electric power system, EPB. At 20 to 200 times the
maximum speed available in other communities, the network opens the door to innovative ways
to learn, play and conduct business.20
This infrastructure is also attractive to companies looking to invest in building out new
capabilities or expanding existing operations. Volkswagen has invested $1 billion in the local
economy for the Chattanooga plant and created more than 2,200 direct jobs in the region.
According to independent studies, the new Volkswagen plant is expected to generate $12 billion
in income growth and an additional 9,500 jobs related to the project. In January 2012,
Amazon.com announced an expansion to their existing distribution and logistics centers in the
middle Tennessee area, investing $139 million dollars and expecting to create over 1,300 jobs.21
GigTank is Chattanooga’s incubator for companies building products and applications that
leverage the city’s fiber network.22 In 2013, the program funded HutGrip, a cloud-based
software-as-a-service platform that helps manufacturers better understand, manage and handle
production downtime and improve their processes; clearly establishing advanced manufacturing
as a sustainable and relevant application of broadband connectivity.23
Gig.U - from 100Mbps to 1Gbps The University Community Next Generation Innovation Project, or Gig.U was born out of the
National Broadband Plan, but focuses specifically on growing or using the existing ultra-high-
speed networks of universities and public research institutions to provide broadband connectivity
not 10 times faster (as is the case for the National Broadband Plan), but in upwards of 100 times
faster - 1Gbps. Improvements to these networks drive economic growth and stimulate a new
generation of innovations that address critical needs, such as health care and education. Penn
State University is one of the 30 leading research universities that comprise Gig.U.24
19 Connecting America: The National Broadband Plan, Executive Summary,
http://www.broadband.gov/plan/executive-summary/ 20 The GigCity, Summary - http://thegigcity.com/resources/logos/summary.pdf 21 Wotapka, Dawn, Chattanooga Reinvents Itself, at Its Own Pace, WSJ Online,
http://online.wsj.com/news/articles/SB10001424052702303624004577341932764696276 22 The Gig City, GigTank 2013 Teams, http://www.thegigcity.com/gigtank/gigtank-2013 23 HutGrip - Predictive and Preventive Manufacturing Solution, http://www.hutgrip.com 24 Downes, Larry, On One Year Anniversary, Gig.U Delivers Impressive Results and Valuable Lessons for Gigabit
Internet, Forbes, http://www.forbes.com/sites/larrydownes/2012/08/06/on-one-year-anniversary-gig-u-delivers-
impressive-results-and-valuable-lessons-for-gigabit-internet/
26
US Ignite - National Effort to Drive 1Gbps Connectivity and Applications Organized by the Office of Science and Technology Policy and the National Science Foundation
in June 2012, the US Ignite program aims to promote the development and deployment of next-
generation applications running on ultra-high-speed networks (often time equal to or greater than
1Gbps). The program will leverage existing networks within the Global Environment for
Networking Innovation (GENI) at academic campuses, national research backbone networks and
broadband cities across the country. Unlike most public initiatives, the effort is organized by the
government, but supported through funding and investment from private partners such as
Juniper, Cisco, Verizon and Comcast.25
Mozilla Ignite Challenge - Competition and Funding for Next-Generation Applications In partnership with US Ignite, the Mozilla Foundation invited designers, developers and
entrepreneurs to consider and build applications that take advantage of next-generation networks
up to 250 times faster than the average connection speed, in areas that benefit the public such as
education, healthcare, transportation, manufacturing, public safety and clean energy. In addition
to offering up to $500,000 in awards, participants will also gain access to advanced technologies
developed through the National Science Foundation’s GENI program.26 In 2013, three winners
in the Advanced Manufacturing context emerged:
1. Cloud Computing for Collaborative Advanced Manufacturing
This project focuses on the resources needed to enable remote collaboration in advanced
manufacturing, particularly in the emerging domain of “micro devices assembly.” Applications like this will be critical to enabling the distributed, virtual manufacturing
enterprise.27
2. Simulation-as-a-Service for Advanced Manufacturing
This project aims to use PC over IP technology to provide a thin client for manufacturers
to use computationally-intensive simulation and analysis tools through cloud-based
remote computing resources. This application will create a more financially feasible
product for small and medium-sized manufacturing enterprises.28
3. Remote Process Control using Reliable Communication Protocol
This project is an attempt to use software-defined networking to create a robust protocol
for monitoring and controlling advanced manufacturing processes with a higher
reliability and lower latency than is currently possible with TCP/IP. This and similar
efforts will be critical for enabling a smart shop floor.29
25 US Ignite, Common Questions, http://us-ignite.org/what-is-us-ignite/common-questions/ 26 Mozilla Ignite, About, https://mozillaignite.org/about/ 27 Mozilla Ignite, Cloud Computing for Collaborative Advanced Manufacturing, https://mozillaignite.org/apps/415/ 28 Mozilla Ignite, Simulation-as-a-Service for Advanced Manufacturing, https://mozillaignite.org/apps/443/ 29 Mozilla Ignite, Remote Process Control using Reliable Communication Protocol,
https://mozillaignite.org/apps/418/
27
Google Fiber (Kansas City) In March 2011, Google announced that the Kansas City metropolitan area (Missouri and Kansas)
would be the first community to receive the symmetric 1Gbps fiber network.30 In July 2012,
after building the infrastructure of the network, Google announced pricing for Google Fiber. The
service will offer three options: a free broadband Internet option, a 1 Gbps Internet option for
$70 per month and a version that includes television service for $120 per month.31 At the time of
this report, Google Fiber is available and contenting to rollout to 19 surrounding neighborhoods.
Austin, Texas and Provo, Utah are slated to be the next two Google Fiber cities.32
National Digital Engineering and Manufacturing Consortium (NDEMC) In March 2011, the Economic Development Administration (EDA) awarded $2 million to the
Council on Competitiveness, a non-partisan group of CEOs, university presidents and labor
leaders, in order to advance growth and competitiveness in Midwestern small and medium-sized
enterprises (SMEs). The EDA’s grant would also be matched by a $2.5 million grant from
private-sector partners (including Deere and Company, Lockheed Martin, General Electric
Company and Proctor and Gamble) and help to catalyze development and successful utilization
of cutting edge technologies that accelerate the design process and increase the capabilities of
manufacturing SMEs.33
A primary function of NDEMC will be to develop software, purchase time on supercomputers
and train the employees of SMEs in the use of this technology, enabling them to design their own
advanced manufacturing processes and products. This will be done in close collaboration with
original equipment manufacturer (OEM) customers of these companies, ensuring that this
cutting-edge technology will help both OEMs and their supply-chain partners in Ohio, Illinois,
Indiana and Michigan.34
The success of NDEMC’s Midwest Pilot Project led to the need to expand its impact and deliver
access to high-performance computing and software for modeling, simulation and analysis
through a user-friendly web application. The Ohio Supercomputer Center’s AweSim program is
a realization of this need.35
30 Google Fiber Blog, Ultra-high-speed broadband is coming to Kansas City, Kansas,
http://googleblog.blogspot.com/2011/03/ultra-high-speed-broadband-is-coming-to.html 31 Google Fiber Support, Service plans and pricing,
https://support.google.com/fiber/answer/2657118?hl=en&ref_topic=3034219/ 32 Google Fiber Blog, One Year of Fiber in Kansas City, http://googlefiberblog.blogspot.com/2013/11/one-year-of-
fiber-in-kansas-city.html 33 U.S. Commerce Department, U.S. Commerce Department Invests in America’s Small- and Medium-Sized
Manufacturers, http://www.commerce.gov/news/press-releases/2011/03/02/us-commerce-department-invests-
america’s-small-and-medium-sized-manuf 34 NDEMC, Overview, http://ndemc.ncms.org/index.php/details/ 35 Kirkly, John, NDEMC Update: Program to Bring HPC, Advanced Manufacturing Technology to Midwestern
Companies Now Underway, http://www.digitalmanufacturingreport.com/dmr/2012-11-
19/ndemc_update:_program_to_bring_hpc_advanced_manufacturing_technology_to_midwestern_companies_now_
underway.html
28
Ohio Supercomputer Center’s AweSim Initiative - providing modeling and simulation capabilities to SMEs In October 2013, the Ohio Supercomputer Center, in collaboration and partnership with Procter
and Gamble, Intel, Nimbis Services, TotalSim USA, AltaSim Technologies and Kinetic Vision
announced AweSim, a program that aims to provide SMEs with a suite of web-based, user-
friendly advanced manufacturing applications. The primary goal of the initiative, which can be
seen as the end result of the NDEMC Midwest Pilot Project (examples of Jeco Plastic Product
and Rosenboom Machine and Tool are presented later in Section 1) is to lower the barriers to
entry when using high-performance computing for modeling, simulation and analysis.36
The two major components of the initiative are an “app store” and support and training. The first
apps to appear in AweSim will be for processing of advanced aerospace materials, thermal
processing for food sterilization, a virtual wind tunnel, structural classics explorer to model
classical design configurations and a virtual test rig, including pull, crush, drop and pressure
tests. AweSim will work with Intel and Lorain County and Sinclair Community College in Ohio
on designing the training and support component - also accessed through the web interface.37
National Network for Manufacturing Innovation The National Network for Manufacturing Innovation (NNMI) is a proposed network of up to 45
research institutes called Institutes for Manufacturing Innovation (IMI) driven by public-private
partnerships working toward developing and commercializing advanced manufacturing
technologies.38 The goal is to alleviate the gap between basic and applied research and
development and commercialization.39
In May 2013, the United States government allocated $200 million of existing funding for the
establishment of three new institutes, one of which is a Department of Defense-led IMI for
digital manufacturing and design innovation. The focus of this IMI will be on developing novel
model-based design methodologies, virtual manufacturing tools and sensor and robotics-based
manufacturing networks.40 Currently, NNMI is focused on the success of its current pilot IMI,
the National Additive Manufacturing Innovation Institute.
National Additive Manufacturing Innovation Institute (Rebranded in October 2013 as America Makes) The first pilot institute within the NNMI is the National Additive Manufacturing Innovation
Institute (NAMII) in Youngstown, Ohio and led by the National Center for Defense
36 The Ohio Supercomputer Center, Third Frontier Commission helps fund $6.4 million effort to boost Ohio
businesses thru modeling & simulation,
https://www.osc.edu/press/third_frontier_commission_helps_fund_64_million_effort_to_boost_ohio_businesses_thr
u_modeling 37 AweSim, About, https://awesim.org/faq 38 NNMI, From Discovery to Scale-up: About the National Network for Manufacturing Innovation,
http://manufacturing.gov/nnmi_overview.html 39 Manufacturing.gov, National Network for Manufacturing Innovation: A Preliminary Design,
http://manufacturing.gov/docs/NNMI_prelim_design.pdf 40 The White House, Office of the Press Secretary, Obama Administration Launches Competition for Three New
Manufacturing Innovation Institutes, http://www.whitehouse.gov/the-press-office/2013/05/09/obama-
administration-launches-competition-three-new-manufacturing-innova
29
Manufacturing in Blairsville, Pennsylvania. America Makes’ (formerly NAMII) mission is to
accelerate the adoption of additive manufacturing processes and technologies within the
domestic manufacturing sector. The Institute fosters open collaboration amongst its members,
facilitates the development, evaluation and deployment of additive manufacturing technologies,
as well as designs programs for educating students and training the existing workforce.41
Pennsylvania’s participation in America Makes is led by the National Center for Defense
Manufacturing and Machining in Blairsville and includes the Commonwealth of Pennsylvania,
Penn State University Applied Research Lab in State College, Carnegie Mellon University in
Pittsburgh, Concurrent Technologies Corporation in Johnstown, ExOne Company in North
Huntingdon, Allegheny Technologies Inc. in Pittsburgh, Kennametal in Latrobe and Catalyst
Connection in Pittsburgh.42
America Makes has just closed its second round of projects and has allocated $9 million for
multiple awards. The Institute has identified five technical topics of interest for this round:
Design for Additive Manufacturing, Additive Manufacturing Materials, Process and Equipment,
Qualification and Certification and Knowledgebase Development.43 Projects selected in the
Design for Additive Manufacturing (“the focus of this technical topic is the development of
modeling and simulation tools that enable the ability to virtually evaluate and optimize process
and product alternatives for reduced cost, schedule risk reduction and performance
improvements.”), Qualification and Certification and Knowledgebase Development categories
will be relevant to initiatives involving broadband in manufacturing. 44
1.2 Broadband Connectivity and its Potential for Manufacturing, Particularly for Small to Medium-Sized Enterprises (SMEs)
Access to broadband connectivity immediately opens the opportunity for manufacturing SMEs to
consider a wide array of applications to support day-to-day engagement, collaboration and
workflow, as well as tactical goals or strategic vision. The cloud-based and software-as-a-
service solutions, powered by broadband connectivity, have the power to change the way
products are made, accelerating the development lifecycle by enabling seamless collaboration
and creating a smooth and agile supply chain. By lowering traditional barriers related to cost,
time, location and organizational boundaries, these applications nurture a manufacturer’s
innovative potential.
41 NAMII, Home, http://namii.org/ 42 America Makes, Community, https://americamakes.us/community 43 NAMII, RFP Scope, http://namii.org/rfp-scope/ 44 NAMII, Project Call to Members of the National Additive Manufacturing Innovation Institute for Applied
Research Projects, http://namii.org/wp-content/uploads/2013/09/NAMII-Project-Call-2-Final.pdf
30
Broadband technologies only enhance competitive advantage when a company is using these
technologies to communicate faster or more effectively. Internal company-based, hard-wired
activities benefit little from broadband technology unless the company is using wireless devices
to access remote data or to control operations. Thus, a key theme in broadband effectiveness is
tied to the company’s approach to its data management and communication flows.
In order to promote the sustainable adoption of broadband connectivity across a region,
manufacturing SMEs, each with their own unique needs and challenges, must find explicit value
in the costs associated with use of broadband connectivity and infrastructure. A broad portfolio
of applications, enabled by broadband connectivity, ranging from simple yet effective business-
to-business collaboration products, to complex modeling and simulation tools, to even radical
business transformation through service-oriented manufacturing practices exists to support an
equally broad spectrum of organizational needs. Figure 11 highlights the range of ways that
broadband connectivity is enhancing product development innovation and business process
innovation, ranging from simple to complex technologies and solutions. The uses noted in
Figure 11 are extracted from TSIG’s interviews and from secondary resources.
Innovation is a critical component to differentiate an enterprise and its products and services in
the modern manufacturing industry. Manufacturers striving to gain a leading edge are turning to
cloud-based and service-oriented solutions for the several advantages it offers. Computer-aided
manufacturing, computer-aided process planning, production execution, virtual manufacturing
systems, integration of manufacturing data into the design process and additive manufacturing
processes are all potential opportunities for growth enabled by broadband connectivity.
Figure 11: Information Technology Enabled Product and Process Innovation
31
1.3 Driving Manufacturing Innovation through Broadband Connectivity - In the Office
Broadband technologies enable companies to expand their capabilities to run their business.
Within the office environment, this might include customer relationship management (CRM),
enterprise resource planning or materials resource planning (ERP and MRP, respectively) and
supply chain management (SCM). Broadband technologies also enable a nontraditional
distributed office environment. Below, we highlight several company uses of broadband for
their internal or business operations.
Drexel Metals, Inc. - a distributed manufacturing network45 In 1985, Drexel Metals, headquartered in Ivyland, Pennsylvania, was a steel supplier making
everything from lighting fixtures to ceiling ribs for the construction industry. But its customers
began asking for metal roofing products, where traditional go-to-market factories selling pre-
fabricated roof panels ready for installation dominate 80 percent of the market. According to
company President Brian Partyka, “a challenge with pre-fabricated metal roofing is that when
you ship it, you’re shipping unwieldy sections that require a lot of packaging to protect them
during transport.”46
Instead, Drexel Metals decided that the best way to get its product to both residential and
commercial customers was through a network of specialty installers who could fabricate the
“standing-seam” metal roofs onsite. This eliminated expensive shipping and also reduced the
lead time necessary for contractors and installers. Now Drexel Metals sells one to two-ton coiled
metal rolls in 36 colors and it offers installers the ability to buy or lease-to-buy a portable roll-
forming machine that can transform these rolls into the specific standing-seam roof desired
by the customer. But the company did not stop there. As a way to support remote fabrication,
Drexel developed cloud-based tools and services that enhance their customers’ ability to plan
for, bid and win sophisticated roofing jobs. In short, through a network of regional
manufacturers, Drexel Metals now orchestrates a supply chain that runs from the steel
manufacturer to the installed roof. The Drexel Metals Association of Regional Manufacturers
provides these machine owners with everything they need to compete with the much larger,
traditional, fixed-in-place manufacturers.
Drexel’s distributed-manufacturing and installation model relies heavily on the Internet to
provide technical and engineering support. The members of its association are supported by a
wiki — a website that allows its users to access, add to and edit its content — that contains more
than 2,000 searchable documents describing everything about the product, its installation and the
onsite forming of roof sections. In addition, cloud-based costing and bidding tools help potential
installers estimate material needs and designs. The design support relies on images captured by
Pictometry, a company that uses aerial images to provide precision measurements that are fed to
installers via the cloud.
45 Adapted from Petrick’s The Future of Manufacturing 46 Brian Partyka, personal conversation, 2012.
32
Today, Drexel Metals supports its customers with an anywhere-anytime access strategy that
leverages mobile technology. In addition to its wiki, it has a YouTube channel, a LinkedIn
group and it also communicates via Facebook and Twitter. The result of this approach has been
phenomenal growth. Revenue went from $24.2 million in 2008 to $51.3 million in 2011, with a
three-year overall growth figure of 112 percent. In 2012, Drexel Metals reached number 2,260
on the Inc. Magazine 5000 and number 67 on the publication’s list of the top 100 manufacturing
companies.47
DDB Unlimited, Inc. - financial and productivity gains from cloud-based ERP systems Based in Wynnewood, Oklahoma and with another plant in Pauls Valley, Oklahoma, DDB
Unlimited is a 140-person OEM of rugged outdoor cabinet enclosures for electrical and
communications equipment. In April 2010, DDB Unlimited invested $235,000 in an in-house
ERP system. The company hoped to gather information from its disparate accounting, inventory
and manufacturing departments into a central database for a real-time view of its manufacturing
processes. Unfortunately, even with a successful rollout and integration into its legacy systems,
the adjustment and maintenance proved difficult and detrimental to business.48
In January 2011, DDB Unlimited switched to a cloud-based ERP system from another provider,
Acumatica. Acumatica handles software upgrades, patches and backup, freeing DDB
Unlimited's IT department to focus on its production facilities. Employees can use the system to
track manufacturing costs, view accounts receivables, enter purchase orders, review inventory
and clear checks. The system has helped DDB Unlimited whittle its order-processing cycle from
2 hours to 45 minutes. Employees can access the system from a remote computer for real-time
information such as a customer's purchasing history.
It cost DDB Unlimited about $100,000 to transfer data and take the other steps necessary to
implement Acumatica’s cloud-based ERP system, which costs $35,000 per year. However, the
transition from an in-house ERP system to a cloud-based ERP solution will cut $80,000 in
annual expenses.49
Hiawatha Rubber Company - utilizing modern ERP systems to help drive detailed business insight and analysis Based in Minneapolis, Minnesota the Hiawatha Rubber Company is a family-owned designer
and manufacturer of custom-molded rubber parts and assemblies for OEMs. Hiawatha recently
replaced an aging, in-house ERP system with a cloud-based ERP solution from Plex Systems, an
independent software vendor specializing in cloud-based manufacturing software. While their
old system could provide basic information, it lacked the ability to provide the detailed, real-time
and accurate financial and manufacturing information that company decision makers needed.
This was particularly challenging when they were trying to integrate production data with
costing and quality data.
47 Inc. Magazine, 2012, http://www.inc.com/profile/drexel-metals 48 ERP Software Gets a Second Life in the Cloud - http://www.technologyreview.com/news/424675/erp-software-
gets-a-second-life-in-the-cloud/ 49 Acumatica, Enclosure Manufacturer Uses Cloud ERP to Replace Sage MAS 90,
http://www.acumatica.com/images/uploads/Acumatica_Case_Study_DDB_Unlimited.pdf
33
Following a three-month implementation — about half the time it took to install the original in-
house system — Hiawatha managers were able to see the value of real-time visibility.
According to Tim Carlson, a company manufacturing manager, “the plant-floor employees now
see upcoming jobs and where materials are located in real time, enabling them to make quicker
and better decisions. Now when a customer calls for a rush order, we can tell them in minutes
when their order will be ready, compared with several hours and a significant amount of manual
effort when we had our previous system in place.”50 The company’s website proudly advertises
this capability, saying: “Our extensive and sophisticated enterprise resource planning system
lives in the cloud, giving us a platform that’s typically only found at Fortune 500 companies.”51
Videon Central, Inc. - controlling the pace of development with cloud-based project tracking applications (this example is expanded in Section 2.3) Based in State College, Pennsylvania, Videon Central, Inc. is a 65-person developer and
producer of high-performance digital video solutions and consumer electronics goods. Videon
uses managed infrastructure and many cloud-based applications for resource planning and
project tracking. In a recent interview, Videon CTO Jim Condon cited one of the biggest
advantages to employing a cloud-based solution is being able to expose critical business
information to its customers and suppliers. Because Videon is a small manufacturer, it is often
[in the eyes of a large OEM] grouped in with other small companies that in some cases supply or
sell things as simple as a screw. Videon, which sells much more sophisticated software and/or
hardware would like more control over the pace of communication and project development and
stand its ground against large bureaucracies. By using a hosted instance of Jira by Atlassian
Software Systems, Videon’s suppliers and customers can integrate their project tracking systems
with Videon’s for real-time project and product updates.52
Local Motors - crowdsourcing open-source automobile design and production Founded in 2007 and located in Phoenix, Arizona, Local Motors is a 45-person manufacturer of
automobiles that uses crowd-sourced design and advanced manufacturing and technology to
create unique, game-changing vehicles. The company’s online co-creation platform enables its
36,000 enthusiasts and engineers to leverage Local Motors’ distributed manufacturing and
supplier network to imagine and design one-of-a-kind vehicles, which are then assembled by the
customer and Local Motors’ engineers at one of the company’s three “Micro Factories.”53 The
platform is currently hosting almost 5,000 designs and 1,000 ideas across 336 active projects
with contributors from over 130 countries.54 Local Motors’ first commercially available product
is the Rally Fighter, an open-source, street-legal, off-road desert racing-inspired vehicle that
costs $99,000.55 The company is currently working on a crowd sourced, open motorbike design,
50 Baker Tilly, Success in the Cloud: Manufacturers are switching to cloud computing systems to achieve improved
business performance, http://www.bakertilly.com/Manufacturers-Switching-to-Cloud-Computing 51 Hiawatha Rubber, Capabilities, http://www.hiawatharubber.com/#!/capabilities/data-systems-cloud-computing/ 52 Jim Condon, personal interview, June 2013 53 Local Motors, About, http://localmotors.com/about 54 Local Motors, Co-Create, https://localmotors.com/cocreate/ 55 Gastelu, Gary, Local Motors Going Global, Fox News, http://www.foxnews.com/leisure/2011/12/09/local-
motors-going-global/
34
The Cruiser, which is a gas and electric hybrid, but also complies with bike lane regulations for
cities.56
Quirky - crowdsourcing and partnering for product design and development Founded in 2009 by 23-year-old Ben Kaufman and located in New York City, Quirky is a 120-
person designer and manufacturer of consumer products that is powered by an online platform
for crowdsourcing and refining new product ideas.57 The process that Quirky has developed is
that users (of which there are currently more than 625,000) submit ideas (through the web or the
company’s iPhone app) for new products that are voted on by the community. The Quirky
product team, along with its network of external industry experts, evaluates the leading products
and chooses the next product for production. Quirky engages its user base to further refine the
design before it is readied for manufacturing. Currently, the company has produced 403
successful products.58 Because of Quirky’s success in quickly filling market gaps with new
products, General Electric has chosen to invest $30 million in a partnership to develop “playful
consumer products.”59 The goal is to collaborate on six new projects each year for the next five
years, particularly ones that leverage Quirky’s WINK, a platform for developing Internet-ready
devices.
1.4 Driving Manufacturing Innovation through Broadband Connectivity – In the Shop
Manufacturing operations can be supported using broadband for Internet-based design
collaboration, digital modeling, simulation and analysis – much of which is supported by high-
speed computing that requires fast data transmission rates with networked computing power.
Below are examples of some of these methods and the companies that have successfully
deployed them.
M.G. Bryan Equipment Company - using cloud-based applications and services to create transformative products Located in Grand Prairie, Texas, M.G. Bryan Equipment Company is a heavy equipment and
machinery OEM for the oil and gas industry. M.G. Bryan partnered with Rockwell Automation
and Microsoft to create a cloud-based asset performance management system. Designed and
integrated with Rockwell’s sensors and devices, M.G. Bryan’s new equipment control and
information system leverages Microsoft’s Windows Azure cloud-computing platform to help
provide secure remote access to real-time information, automated maintenance alerts and service
and parts delivery requests.60 Along with sensor integration, Rockwell also helped M.G. Bryan
56 Local Motors, The Cruiser, https://localmotors.com/cruiser/ 57 Boutin, Paul, Quirky’s 23-year-old CEO finds love with the supply chain, Venture Beat,
http://venturebeat.com/2010/04/27/quirky-ben-kaufman/ 58 Quirky, How Quirky Works, http://www.quirky.com/how-it-works 59 Brustein, Joshua, Why GE Sees Big Things in Quirky's Little Inventions, Business Week,
http://www.businessweek.com/articles/2013-11-13/why-ge-sees-big-things-in-quirkys-little-inventions 60 Microsoft, M.G. Bryan Pioneers First-of-its-Kind Cloud Computing Performance Asset Management -
http://www.microsoft.com/en-us/news/Press/2012/Jun12/06-12RockwellPR.aspx
35
design a simple, user-friendly application that can be accessed across multiple devices from the
cloud in order to improve access to business information.61
M.G. Bryan focused on its hydraulic fracturing vehicles in the first release of its cloud-based asset
management system. Leveraging their new platform, the company can remotely track the vehicle’s
performance and maintenance schedule—oil filters need changed every 200 hours and engines
need rebuilt ever 4,000 to 5,000 hours—and optimize and increase their fleet’s uptime.
Die-Tech, Inc. - using digital simulation and analysis to improve tool and die development62 Based in York Haven, Pennsylvania, Die-Tech is a 50-person precision metal stamper for a
variety of industries. In a recent interview, Director Ronay Wolaver described the productivity
gains in tool and die development (historically the costliest—in terms of time and money—
process for the business) from the use of digital simulation and analysis. In the past year, Die-
Tech has invested in four PCs (total hardware investment of about $32,000) running high-
performance technical computing software (total software investment of about $15,000) in order
to be able to digitally design a new tool or die and digitally test its performance over an expected
lifetime. Before the addition of the PCs and simulation and analysis software, Wolaver
estimated that the time to design, test and create a tool or die took about 18 to 20 months -
mostly due to costly and time-consuming physical prototyping and destructive testing. In
February 2013, Die-Tech began development of four new dies and had completed two of them at
the time of the interview (June 2013). She estimates that because of the strategic advantage
created by shorter time-to-market and the money saved in tool and die development, Die-Tech
has saved “hundreds of thousands of dollars.”63
Jeco Plastic Products - using remote high-performance computing resources to test innovative product designs Based in Plainfield, Indiana, Jeco Plastic Products is a 25-person custom-mold manufacturer of
large, complex and high-tolerance products for large OEMs in the automotive, aerospace,
printing and defense industries. The company uses rotational molding and twin-sheet pressure-
forming processes and employs materials ranging from commodity thermoplastic resins to highly
complex resins with continuous unidirectional carbon fibers.
Recently, Jeco received a last-minute design change for a custom pallet that it was designing for
a large German automobile manufacturer—part of a multimillion dollar export contract. Jeco
was able to access high-performance computing resources through a partnership between Purdue
University’s Manufacturing Extension Program and the Ohio Supercomputer Center through the
National Digital Engineering and Manufacturing Consortium (NDEMC). Using an instance of
Ohio Supercomputer Center’s SIMULIA Abaqus Unified Finite Element Analysis software suite
from Dassault Systèmes and the knowledge, expertise and training from Purdue University, Jeco
performed rigorous simulation and analysis and was able to quickly validate the last-minute
design changes.
61 Rockwell Automation, M.G. Bryan Pioneers First-of-its-Kind Cloud Computing Performance Asset Management
- http://oilandgas.rockwellautomation.com/mg-bryan-pioneers-first-of-its-kind-cloud-computing-asset-performance-
management 62 Derived from one-on-one interviews as part of this study. 63 Ronay Wolaver, personal interview, June 2013
36
Because of the success of Jeco’s custom pallet, the client has signed an additional contract worth
$2.5 million annually for the next five to ten years. Along with the increased revenue, Jeco plans
to hire 15 additional employees for these new advanced manufacturing capabilities. Jeco also
plans to spend an additional $500,000 on building out their simulation and analysis competency
after their success with the NDEMC helped the company secure additional projects with major
aerospace and automobile clientele.64
Rosenboom Machine and Tool, Inc. - using remote high-performance computing resources to radically improve product quality Based in Sheldon, Iowa and with plants in Spirit Lake, Iowa and Bowling Green, Ohio,
Rosenboom Machine and Tool is a designer and manufacturer of custom hydraulic cylinders.
Across these three locations, Rosenboom produces about 2,500 hydraulic cylinders each day. As
part of a partnership with NDEMC and global agricultural machine manufacturer Deere and
Company, Rosenboom would leverage Deere’s high-performance computing resources and
engineering expertise to solve complex design and engineering problems.65
In its current operations and given its current technical computing capacity, if simulations took
more than a week to complete, Rosenboom opted for the more expensive and time-consuming
physical prototyping and testing. Rosenboom’s optimal design cycle is between three and seven
days. If a project cannot be completed in this timeframe, Rosenboom must move on to other
projects.
The first problem Deere experts helped Rosenboom solve was with a high-pressure weld joint on
a cylinder product that had been experiencing root cracks and failure that could not be reliably or
consistently explained by Rosenboom’s engineers. Using Deere’s resources and expertise,
Rosenboom engineers could use finer meshes to reliably solve the problem and correct the
design. The knowledge obtained in this exercise was also quickly applied to another cylinder in
an entirely different product line that was also experiencing premature failure. After redesigning
and optimizing the joint, the product’s lifetime expectancy grew 20-fold.
The second problem Rosenboom was interested in solving was testing large hydraulic shock
absorbers, a problem plaguing Rosenboom engineers because without sufficient in-house
computing capacity, engineers were forced to build physical prototypes, test and iterate—not
only an expensive and time-consuming process but also extremely challenging as each cylinder
is about 30 feet long. Deere’s engineers trained and assisted Rosenboom engineers in creating a
digital model of the prototype that engineers could then simulate, test and validate before
building a physical prototype. Based on these successes, Rosenboom’s next step is leveraging
more powerful systems and more complex software to run full assembly simulation of its
cylinders and move away from its current practice of physical assembly tests.66
64 NDEMC, Case Study: NDEMC Helps Jeco to Exceed Growth and Financial Expectations,
http://www.compete.org/publications/detail/2485/case-study-ndemc-helps-jeco-to-exceed-growth-and-financial-
expectations/ 65 McIntyre, Cynthia, How a New Partnership Can Help Smaller Firms Win, Harvard Business Review Blog
Network, http://blogs.hbr.org/2012/03/how-a-new-partnership-can-help/ 66 SC12 Panel Session, HPC's Role In The Future of American Manufacturing,
http://sc12.supercomputing.org/schedule/event_detail.php?evid=pan110
37
1.5 Summary
The programs and manufacturers included in this section demonstrate the breadth of impact that
broadband can and has had in improving competitive advantage. Broadband connectivity has
proven to be a draw for companies seeking new locations for facilities, has enabled existing
companies to expand their operations, enhance their offerings and establish themselves as key
partners in their supply chains. But all of these uses require new ways of thinking. Successfully
leveraging broadband often results in new business models and an expanded view of digitally
enhanced production, sales and services.
38
APPENDIX 2: Web-based Survey Content
Question Format Options
Information Technology Use
In your company, what types of
information technology do you
use?
Select all that apply o We don’t use any information technology
o We use information technology for general
business support
o We use information technology in our
manufacturing planning or operations
o We use information technology for internet
sales or support
In what ways do you use
information technology for general
business support?
Select all that apply,
but only presented if
respondent indicated
general business
support in an earlier
question
o E-mail
o Accounting
o Human resources
o Word processing (documents)
o Customer Relationship Management (CRM)
o Sales and marketing
o Other:
In what ways do you use
information technology in
manufacturing planning or
operations?
Select all that apply,
but only presented if
respondent indicated
manufacturing
planning or
operations in an
earlier question
o Computer Aided Design (CAD)
o Computer Aided Manufacturing (CAM)
o Computer Aided Engineering (CAE)
o Material handling
o Purchasing (supply chain management)
o Inventory management/warehouse
management (WMS)
o Shop floor data collection of materials and
labor hours
o Scheduling
o Simulation
o 3D manufacturing design
o 3d manufacturing production
o Other:
In what ways do you use
information technology for internet
sales or support?
Select all that apply,
but only if presented
if respondent
indicated internet
sales or support in an
earlier question
o Website
o Internet catalog
o Online ordering
o Online product customization
o Online product/sales tracing of shipping and
delivery
o Social media (Facebook, Twitter, LinkedIn,
Blogs, etc.)
o Other:
Motivation
What motivates your company to
use information technology?
Select one o We are motivated by internal people and/or
needs
o We have adopted IT to support our customers
and suppliers
39
Question Format Options
You indicated that internal people
and/or needs have motivated your
company’s use of information
technology.
Select all that apply o We wanted to reduce costs
o We wanted to reduce headcount
o Information technology is a strategic resource
that promotes internal collaboration and
coordination
o Information technology is a strategic research
that supports external collaboration and
coordination
o We are using IT to expand to new, often
global markets
o Other:
You indicated that you adopted
information technology to support
your company’s customers and
suppliers.
Select all that apply o One or more customers required us to adopt
information technology solutions to
participate in bids or sales opportunities
o One or more customers required us to adopt
information technology solutions to develop
designs, co-design/innovate, test or simulate
o One or more suppliers required us to adopt
information technology
o Other:
Internet Connection, Broadband Familiarity & Effective Use
What type of internet connection do
you currently use?
Select all that apply o ADSL (Asymmetrical Digital Subscriber
Line)
o Cable (e.g. Comcast, Time Warner, Blue
Ridge Communications, etc.)
o Satellite
o Wireless broadband
o High speed leased line
o 3G/4G/LTE mobile phone
Is your company familiar with
Broadband?
Select one o No, I don’t know why broadband would be
useful
o Yes, my company is aware of broadband, but
we’ve chosen not to use it
o Yes, my company tried broadband, but has
since stopped using it
o Yes, my company is using broadband for
some or all of our internet communication
needs
Your company has chosen not to
use broadband. Why?
Open ended question presented only if respondent indicated this answer in
a previous question
Your company tried using
broadband, but has since stopped
using it. Why?
Open ended question presented only if respondent indicated this answer in
a previous question
Opinion Questions Five point scale Strongly Disagree to Strongly Agree (including a
neutral position)
My company has been able to more effectively serve existing customers’ needs due to broadband connectivity
My company has been able to add new customers due to broadband connectivity
My company has been able to more effectively serve existing suppliers’ needs or find new suppliers due to
broadband connectivity
My company has realized cost savings due to broadband connectivity
Effective use of broadband requires specialized IT experts
Broadband has enabled my company to more effectively use the internet for sales and support
Broadband has enabled my company to design, develop and/or test new products for customers
Broadband is critical for my business to succeed
40
Question Format Options
Perceived Benefits of Broadband & Future Expectations
What, if any, do you perceive to be
the benefits of a broadband internet
connection for your business?
Select all that apply o Increased sales
o Reduced operational costs
o More efficient procurement process
o Improved business productivity
o Better access to e-learning
o Other:
Within the next 5 years, do you think your business will be
pressured to conduct business that requires a fast internet
connection such as Broadband?
Yes/No
Where do you think that pressure
will come from
Select one o Customers
o Suppliers
o Engineering/design staff
o Purchasing/sourcing staff
o Sales staff for lead generation
Company & Respondent Demographics
Approximately how many
employees does your company
have?
Select one o 1-50
o 50-250
o 250-500
o 500+
What is the approximate gross revenue of your company? Open ended
What type of manufacturing industry is your company in? Open ended
What is your position/title within the company Open ended
Willingness to participate in a face-
to-face interview as a follow-up to
this web-based survey
Yes/No Open ended name and contact information