Benefiting From The Boom

Since the start of the 1990s, there certainly hasn't been any shortage of software for manufacturing. Over the last dozen years software companies have come and gone, but the overall market for systems designed for the needs of industry has boomed. For manufacturers, the end result is greater choice and expanded functionality. While only a limited number of basic application types were popular back then, today there are a multitude of offerings. Supply chain. Internet-based training modules. Customer-relations management. Web-based product-design collaboration. Asset management. You name it, there's a software package that will track it, slice and dice it, and alert you in a hurry when it's going south. In general, these applications promise to boost efficiency by automating processes, improve decision-making by providing greater visibility into operations, and promote collaboration via information sharing. In most cases, these software "packages" or "solutions" as they are called, delivered at least in part on their promises. But for some companies, the installations have been troublesome. Integration with existing systems has been difficult, tedious and expensive. Manufacturers that weren't prepared for these hurdles stumbled. One of the highest hurdles has been integration, or the lack thereof. Almost every company has several different software packages, which in and of itself, leads to confusion if pains aren't taken to ensure that they are meshed with technological elan. The alternative, of course, is the shrill grinding of gears that is so common in business today as software packages fail to communicate, bringing daily business to a thundering halt. Today, however, most software companies are revising their packages to meet common standards such as XML. "Vendors are moving more aggressively to base their technology on widely accepted industry platforms," observes Eric Berg, managing director of technology forecast publications at PwC Global Technology Center in Menlo Park, Calif. Berg is the co-author, along with Terry Retter, of the just-released volume, "Technology Forecast: 2002-2004, Navigating the Future of Software," published by PwC. Some businesses, too, found that the payoffs to be had from ERP turned out to be less than promised. Many manufacturers realized that they needed still more software -- supply chain management and customer-relationship management, for instance -- to do the things they thought they should have been able to do with their expensive, supposedly all-encompassing ERP. Of course, in the midst of all this, looming gargantuan like the mythical Scylla and Charybdis, stood the dual challenges of people and process. No software package, no matter how good or how easy to install, is worth a hoot if the people the company is asking to use it aren't first sold on its value to them and then carefully trained in its idiosyncrasies. Likewise with the need to attend first to process, then to the technology. Any consultant worth his or her MBA will advise against "automating the cowpath." In other words, the smart manufacturer will first revise the process, eliminating unnecessary effort and reducing wasted materials, and then add the software. In a very real sense, that's exactly how SAP AG, the ERP software leader worldwide, derived much of its success. The company's software, first R/2 for the mainframe and later R/3 for networks, literally forced companies to revamp their business processes before they could get to square one of the installation. While some manufacturers found this tedious, many, such as Dow Chemical Co., used the exercise as a way to improve their processes, consolidating repetitive activities and information systems along the way. When done right, ERP proved a blessing for multinational manufacturers with far-flung operations and disparate systems around the globe. Even so, many manufacturers have reached beyond ERP to implement software packages that meet specific business issues. While it would be difficult to compile an all-encompassing list of applications, what follows is a taxonomy of sorts for enterprise software for manufacturing. The list is generic, rather than industry-specific, so that these software packages have fairly broad applicability to manufacturers in different industries. Enterprise Resource Planning (ERP): The granddaddy of enterprise software, ERP grew out of the old manufacturing resource planning (MRP II) and material requirements planning (MRP). While MRP and MRPII were primarily planning applications, ERP went further, including applications for accounting, human resources and distribution management. In recent years, ERP software packages have been expanded to include supply-chain functions, customer-relationship systems and a host of other specific applications not initially viewed as part of the traditional ERP. Today, most of the various applications a company needs can be obtained through a single ERP vendor, such as SAP, Oracle Corp., JD Edwards or PeopleSoft Inc. Once the purview of the big manufacturer, ERP today is accessible -- both price-wise and in terms of functionality -- to not only the midsize manufacturer but smaller manufacturers as well. "We were surprised at how many vendors there are selling ERP solutions," says Retter, director of programs and outreach at the PwC Global Technology Center. "We found a range of software solutions that address the different market segments." Supply-Chain Management: Of course manufacturers always did collaborate with one another, it's just that software packages that enable this capability made it that much easier to do. Among the leaders in this category are i2 Technologies and Manugistics Inc., but ERP providers SAP, PeopleSoft, and JD Edwards have made major inroads into this market. Before supply chain and collaboration became buzzwords, most manufacturers had their hands full simply scheduling production and the flow of inventory with a plant or among multi-plant operations. Again, the market for advanced planning and scheduling (APS) software was led by such software firms as i2 and Manugistics. E-Procurement: Once known as purchasing, e-procurement is the automated version of this business function. What's really different, though, is that e-procurement includes online tools such as Web-based reverse auctions, e-exchanges and online catalogs of products. Another new wrinkle the technology offers is that it is commonly used by non-purchasing professionals. A leader in this area is RosettaNet, a consortium of high-tech firms that has had success in standardizing various business processes so that companies can truly conduct business over the Web. The idea is to make sure that the underlying business processes behind a transaction between companies speak the same language. Product-Life-Cycle Management: Computer aided design (CAD) is used to create visual representations of products, while product-data management (PDM) is a system that manages engineering drawings and engineering change orders. Product-life-cycle management (PLM) software embraces a broader concept, addressing all the activities related to managing a product, from introduction to obsolescence and recycling. In the latest offering, some vendors are equipping manufacturers with master control consoles -- in effect, a computer-screen view allowing management to track several products as they proceed through the various steps of development. Some leading vendors of PLM applications include PTC, EDS, Centric Software and Tecnomatix. Customer-Relationship Management: Although Siebel Systems Inc. virtually created this market (IW, February 2002), the ability to track customer leads, follow up on sales, and manage customer service from a comprehensive viewpoint is offered by other software makers, including PeopleSoft, SAP and Oracle. What manufacturing executive wouldn't want to know more about current and prospective customers and be able to act on that information in a timely manner? Some important CRM functions for manufacturers are contact management, sales force automation and customer service. Many large manufacturers depend on mobile sales-force automation software to enable their sales staff to stay in close touch with managers and vice versa. Business Intelligence, Analysis and Reporting: Business reports aren't going away anytime soon. But software that does away with much of the unnecessary proliferation of written reports is making deep inroads into the way executives receive key information. Also relatively new is the ease with which, using these new analytical systems, information can be presented in a meaningful fashion. Among the leaders in this market are Cognos, SAS Institute, Oracle and Hyperion Software. Most of the leading relational database vendors such as Oracle, IBM and Microsoft have embedded online analytical processing (OLAP) capabilities into their database products. In fact, some vendors now offer packaged data-warehouse technology that comes with built-in analytical functions. Knowledge Management: While it may sound like a buzzword, knowledge management (KM) addresses a basic need of most companies: the ability to locate accurate, timely and relevant information that can be used to solve business problems. KM software promises to do that and more by ensuring that all the information that went into establishing the company's products and services is protected and saved for reuse by others. While knowledge management deals with less structured information including problem-solving know-how, some analysts predict that the management of content in the form of documents will merge with KM under the new moniker, enterprise content management (ECM). The idea is that employees would have access to multiple knowledge and data sources through a single enterprise portal. Enterprise Asset Management: The value of this little-known software application stands in reverse proportion to the amount of hype it receives. Yet smart manufacturers and industrial firms continue to employ enterprise asset management (EAM) systems to track the uptime and maintenance needs of key pieces of equipment employed in their operations. The idea is that a few bucks spent now on smart, software-specified maintenance can yield big payoffs down the road in the form of exceptional uptime for production. Typical users of asset management software are utilities, construction and energy firms, but manufacturers such as Volvo Car Corp. also employ it to ensure uptime of equipment and maintain output levels. Online Marketing: Many manufacturers have found the Web to be an ideal vehicle for communicating with their customers. Large consumer-product-goods manufacturers have begun to engage their customers in an interactive relationship using their Web sites. Others are using the Internet to gauge consumer tastes regarding new products. A particularly hot area is what is known as personalization, the ability to selectively deliver content and services to specific customers and prospective customers. The ability to target specific customer groups is very attractive to some companies. Many software vendors offer personalization capabilities, including Digital River, E.piphany, Blue Martini Software, BroadVision, Firepond Inc., Vignette and Siebel. Online Training: Software companies are doing it. Universities are doing it. Manufacturers are doing it. Online training, also known as e-learning, is big. Years ago SAP found that each time it rolled out a new version of R/3, it could offer the best and most economical training via the computer. Today, e-learning has progressed so far, the only things it lacks are ivy walls and a few more ounces of prestige. Many manufacturers are offering online training to both employees and customers. Online courses for employees have the benefit of saving the travel time and cost of in-classroom training. Web-based training also is becoming popular for companies with complex products that want to explain their use and servicing details to customers and dealers. Manufacturers can even take advantage of e-learning application service providers (ASPs) such as Knowledge Planet, DigitalThink and SmartForce, which offer online training on a hosted basis. Web Content: Web-content software enables companies to manage the review process for information that appears on their Web sites, intranets and extranets for business partners. Instead of dealing with the presentation or how users will interact with the content, this software tackles the process of how content is developed, revised and approved. A chief component of Web content packages is workflow. The idea is to ensure that the appropriate sequence of approval has been followed during content creation and editing. The software contains version-control capabilities, so that each edition of a document is monitored as changes are made by different employees.