Tired of all the attention lavished on the Internet? If it's any consolation (and it should be) the Second Annual IndustryWeek Census of Manufacturers offers overwhelming evidence that the 'Net is more than just hype. Companies of all sizes, in all industries, have made Internet connectivity and related forms of networking their top priorities. Both at the plant-floor level and in executive suites, survey respondents indicate that Internet and intranet connections either are or soon will be implemented at most companies. This rush to connect is taking place even as the overall implementation of process equipment/technologies and information technology (IT) show signs of mild retrenchment. In fact, there is evidence that the rush to the Internet is affecting enterprise resource planning (ERP), which has been one of the most talked-about forms of IT in the manufacturing sector. Offered a list of 19 common forms of IT from which to choose, client/server ERP placed almost dead last in terms of current implementation; at the corporate level, 25.9% of respondents indicated the technology has been implemented, while at the plant level the figure drops to 13.2%. In fact, more than half of the plant-level respondents said they believed there were no plans to implement ERP. That places this stalwart technology in sharp contrast with the Internet and related forms of networking. Connectivity via the Internet, intranets, and electronic data interchange (EDI) placed second through fourth, respectively, on the list of information technologies that have been implemented at responding plants. Computer-aided design remains the most common form of IT in use at manufacturing plants, implemented at 71.5% of plants in this year's survey, compared to being used extensively at 75.8% of responding plants in the inaugural IW Census (the wording of the Second Annual IW Census question changed slightly). Assuming that the plant-survey respondents who say they plan to implement a given technology do so, Internet connectivity will become the single most prevalent aspect of IT, present in slightly less than 90% of responding firms. This rush to connect has resulted not only from a greater awareness of and preparedness for the Internet, but from a logical migration in technology needs, says PricewaterhouseCoopers LLP principal consultant Paul Accordino. "The big push that ERP has enjoyed for several years," he says, "has helped foster intraorganizational communication. The next phase is to branch forward and backward to customers and suppliers, and the Internet is becoming a viable way to do that." But there also is reason to believe that the Internet is not merely a next step, but in many cases a potential substitute for ERP, or at least some of its components. Although ERP enjoys a strong presence among IndustryWeek 1000-level manufacturers, particularly in discrete manufacturing, small and midsized companies that have not adopted the technology may tap the Internet as a cheaper, simpler way to accommodate their needs. "ERP is burdensome for many companies," says PricewaterhouseCoopers principal, Frank Dolynka. "It requires resources, time, and money. Companies may be more ready to consider some limited point solutions that offer more bang for the buck in a shorter time period." That certainly would help explain the enthusiasm for advanced planning and scheduling (APS) that the Second Annual IW Census of Manufacturers encountered. "APS has been viewed as a point solution," Accordino says. "In the past many companies bolted it onto their ERP systems and used it to address limited aspects of the factory floor. But this has proved ineffective and limited. Now many vendors have come into the market, functionality has improved, and companies are eager to deploy APS in its own right, rather than seeing it as an add-on to an ERP system." Particularly notable about the priority given to the Internet is that it comes at a time when, overall, there are signs of a certain retrenchment regarding new technologies. For example, only 18% of plants indicated extensive implementation of new process equipment or technologies in the Second Annual IW Census, compared with 23.4% in the inaugural IW Census (the presentation of the question changed slightly). A similar trend was evident with IT: 15.5% indicated extensive implementation this year, compared with 22.7% previously. At the same time, plants that indicated no implementation of IT showed a marked increase. In the case of new process equipment or technologies, 15.8% took a pass in this year's IW Census, compared with just 9.2% previously, while those not implementing IT rose to 22.7% from 14.3%. In fact, the percentage of companies in the inaugural IW Census that planned extensive implementation of IT now is matched by the percentage that plan none. This may be a result in part of the significant time and expense being devoted to fixing the Y2K problem. "It's not uncommon for a large company to have budgeted millions for this," Accordino says. "That money has to come from somewhere, and it's not surprising that under the circumstances the shopping list for new technologies may be shorter." Does that mean a buying binge when the calendar crosses Jan. 1, 2000? "I doubt it," Accordino says. "The Y2K concerns won't all disappear then. The emphasis will simply shift from heading off problems to fixing the ones that come up." The IW Census revealed that even if companies have no immediate plans to implement a given technology, they nonetheless view technology as critical to their overall goals. That's evident in the marked difference between implementation plans and the overall regard in which technologies are held. For example, the IW Census surveys asked whether IT and new-process equipment/technologies are extremely critical, somewhat critical, or not critical. Although only 18% of plants had extensive implementation of new-process equipment or technologies, 43.1% said this was something they viewed as extremely critical. The situation repeated itself in the IT area, where 38.7% said they consider IT extremely critical, yet only 15.5% engaged in extensive implementation. Some of this, of course, has to do with manufacturers being very reliant on what they already have, whether they aggressively are adding more or not. But it also suggests that there is a gap between what plant managers feel they want to do and what they're actually doing. This is reinforced when the focus shifts to planning and scheduling strategies or technologies: 51.2% rate this area as extremely critical, yet only 14.2% engage in extensive implementation. Advanced planning and scheduling, however, was the area of technology most often cited when survey respondents indicated what they are planning to implement. In fact, this was an area cited by 47.6% of plant-level respondents and was well ahead of the second-most-often cited item on the to-do list, adding EDI links to suppliers (39.7%). Like ERP, EDI seems to be at a crossroads. As a form of network communications with a long-established presence at many companies, it would seem to be fully in line with the overall rush to embrace intercompany networking. But it is more expensive and less flexible than Internet-based communication, and Accordino believes that "EDI may phase out slowly, since it's far less accessible than Internet solutions, which can be tapped from almost any PC." Do technology expenditures reap benefits? Given that executives today are more likely to need to justify technology expenditures in terms of return-on-investment, as opposed to the leap-of-faith view that better technology must somehow produce better results, it's heartening to note that there is evidence that those who implement technology extensively do reap benefits. Almost 50% of the plants that said they have implemented IT extensively, for example, said they have made significant progress toward or fully achieved world-class manufacturing status, compared with 35.3% of plants overall. And 7.2% of those implementing IT extensively said that they have fully achieved such status, compared with 4.2% of the total plant respondent base. Results were even stronger for those manufacturing facilities extensively implementing new-process equipment or technologies: 56.3% of them said they have made significant progress toward world-class manufacturing status, and 10.2% said they have fully achieved such status. Manufacturers that have extensively implemented planning and scheduling strategies or technologies were similarly likely to be ahead of the game in world-class manufacturing status, and in other areas as well. For example, while only 10.7% of plant-survey respondents said that they have extensively implemented supply-chain optimization, that figure jumped to 29.3% among those who also have extensively implemented planning and scheduling strategies or technologies. And while only 8.5% of respondents said they have extensively implemented agile-manufacturing strategies, the figure was 24.7% for those that also have extensively implemented planning and scheduling strategies or technologies. But as is often the case with IT, data sometimes can paint a confusing picture of return on investment. Turn rates, productivity, and most measures of quality were all higher at companies that have implemented IT and/or new process technologies than those that haven't. But the typical manufacturing cycle time wasn't affected. In fact, when examining the impact on cycle times of specific technologies, including such stalwarts as computer-aided design and computer-integrated manufacturing, cycle times were actually higher at firms that had implemented these versus firms that have not. This certainly seems counterintuitive, but may have less to do with these technologies failing to deliver than with technology overall having a stronger presence in larger, more complex operations where cycle times run longer. Expect future technology investments to be influenced strongly by what boosts business results, particularly in the form of meeting customer needs. "I think this emphasis on networking, on the Internet, will continue," Dolynka says, "because it is an invaluable tool for managing customer relationships. When you communicate across the supply chain and reach your customers electronically, you can boost on-time delivery rates, customize and configure your products more efficiently, and usher in the many emerging forms of collaboration that seem likely to shape business for years to come." Expect to see many forms of IT modified to run in an Internet-centric world, with costs and complexities dropping and security measures and performance levels improving rapidly. To a greater extent than ever before, a company and its network may be indistinguishable.