Powerful information technologies, dynamic markets, and changing production economics have set the stage for a major transition in manufacturing practices in the fiercely competitive international electronics industry. For U.S. firms, these developments present opportunities to build flexible manufacturing capabilities that complement their flair for innovation and capitalize on the nation's strengths in software engineering.

Capabilities enabled by truly computer-integrated manufacturing operations -- the ultimate objective of the Advanced Technology Program's focus on Computer-Integrated Manufacturing (CIM) for Electronics -- can dramatically reduce lead times, trim production costs, and greatly increase versatility in production. These performance improvements will enable U.S. electronics companies to accelerate product development, quickly diversify product lines in response to changing customer demands, and efficiently produce small batches of products.

Many companies in the $310 billion U.S. electronics industry have developed their own CIM systems. These one-of-a-kind systems have been built principally with customized software, which typically accounts for more than half of a company's CIM investment. While a number of these firms have realized significant operational and business benefits, CIM systems require considerable expenditures of money and time, and they are not easily changed, a liability in the volatile electronics market. Moreover, modifications and enhancements necessitate sizable additional investments in integration software.

In 1993, U.S. electronics firms spent an estimated $222 million on software for integrating shop-floor production. About 70 percent of that amount went for internally developed software customized to their operations. The remainder, about $66 million, went for independently developed software products, which are limited largely to a few general applications with sufficiently large markets.

Manufacturing improvements achievable with CIM could be realized much more rapidly and cheaply if the electronics industry had a common framework, or architecture, for integrating databases, communications networks, and software-based production applications. The critical linking, coordinating, and controlling elements of integrated-manufacturing operations, these software components could be designed as interoperable, modular units, supplied by independent software developers.

A successful industry-led effort to develop and implement a flexible software-based CIM framework will deliver several significant economic benefits. First, a widely adopted framework would increase the base of suppliers of electronics-manufacturing software. If manufacturers buy 80 percent of their integrated-production software commercially -- as compared with about 30 percent today -- the market for these products would grow to about $1 billion by the year 2000, given the double-digit annual growth in electronics industry spending for shop-floor production software.

Second, the availability of interoperable software applications should improve the manufacturing performance of U.S. electronics firms, while reducing the risk of investing in new CIM systems. By enabling efficient re-engineering of manufacturing operations, a widely adopted integration framework can reduce factory start-up times by 30 percent and halve the time and cost now required to bring new electronics products to market. Industry-wide, these improvements would translate into significant increases in market share and total sales. Even if only 10 percent of U.S. electronics firms adopted the CIM framework, gains in sales revenues could exceed $200 billion after seven years.

Finally, most elements of the CIM framework, as well as the associated technologies developed as a result of this program, will be directly applicable to the automobile, aerospace, and other domestic manufacturing industries. Representatives of major automotive and electronic firms agree that there is significant overlap of technical issues to be addressed in building CIM frameworks for their respective industries.

The next phase of efforts will focus on configurability the ability to fashion new combinations of existing and future manufacturing-system components and processes to make new products, enhance existing ones, or improve manufacturing performance. Composed of interchangeable components, factories would achieve the equivalent of the "plug and play" compatibility of personal computers, which permit users to build their own tailor-made systems.

Work in the final phase will aim to increase the intelligence of manufacturing operations, enabling factories to adjust operations automatically to accommodate changing workloads, optimize use of equipment and resources, and reconfigure operations in response to machine breakdowns.

After five years, the effort will yield a robust, fully operational architecture for integrating and reconfiguring production functions in electronics manufacturing facilities.

Some of the companies that have expressed interest in this area already are members of industrial consortia, including SEMATECH, the http://www.ncms.org/">National Center for Manufacturing Sciences, Computer-Aided Manufacturing-International, and the Manufacturing Execution Systems Association. In addition, the American Electronics Association has identified systems integration as one of four strategically important research areas warranting increased emphasis.

Current and prospective suppliers of software for manufacturing applications also are at an impasse. Understandably, they are reluctant to invest in research and develop products for a market that might not materialize because they bet on the wrong integration approach.

The new ATP program can bring an end to this stalemate. By helping industry to focus its attention on a critical need, it will help to define the path toward a solution. Complementary and reinforcing research efforts supported by cost-shared ATP funding will give industry the momentum to overcome technical barriers and to proceed toward full integration.

Only scattered efforts are addressing integrated-production issues in electronics manufacturing. The new ATP program will build on the handful of past efforts in this area, and it will be coordinated with the few other complementary activities. For example, the Defense Department's Advanced Research Projects Agency has several ongoing and planned activities with aims relevant to the broader goals of the ATP program.

Concentrating on the needs of a specific, but very large industry will help to ensure that ATP-funded research is useful to companies in that sector. Results also will be directly applicable to other manufacturing industries confronting similar obstacles to integrated manufacturing.