Getting Real With Real Time

Dec. 21, 2004
Manufacturers achieve real-time goal by focusing on slices of key data, not the entire enterprise.

As manufacturers respond to increasingly volatile demand for a greater variety of products, the need for real-time business information continues to grow. And while few manufacturers actually need to know everything about their operations minute-by-minute, the ability to track certain business measures during or at the close of each day is looking more and more like a competitive necessity. For some manufacturers, of course, the need for so-called real-time data -- information that is updated at least hourly, and sometimes more often -- is questionable at best. For most companies, in fact, a simple daily report on certain key measures -- sales, costs, plant throughput, cycle time, and if possible, profitability -- would be just dandy. Unfortunately, many manufacturers can't even do that. "A lot of people are talking about real-time performance management now, but it's not as easy to accomplish it," says Barbara Brahmstedt, vice president for services at BPM Partners, a consulting firm specializing in business performance management based in Stamford, Conn. "We don't see it happening enterprise-wide." One reason for this is that it's just plain hard to pull off. "The technology behind putting together a real-time enterprise system can be pretty daunting," Brahmstedt observes. "If you have multiple ERP and MES systems across different divisions or plants, it can be difficult to pull the information from these systems together." Brahmstedt says her firm assists businesses in setting up systems to monitor and improve specific business processes. "We help companies understand where they are going and how they can get there, and then we help them set targets and adjust their processes," she says. "The key to business performance management is software, but it's also how you're monitoring and measuring your processes." The supply chain is a prime target for smart use of a real-time system to detect problems and plan more effectively, Brahmstedt says. "We were struggling with our legacy systems to support a highly volatile demand picture," says Brent Hunter, materials manager at the California Semiconductor Test Division of Agilent in Loveland, Colo. Now, Strategic Planner Darlene Atwood uses a recently installed system from Ottawa-based Webplan Corp. to run literally hundreds of MRP simulations in a matter of hours to determine the company's exposure based on different supply-chain scenarios. "It gives us a true picture of our inventory efficiency," she says. Before using the Webplan package, Agilent's planners used Microsoft Corp.'s ubiquitous Excel spreadsheet to develop supply-chain options. "We manually ran the data through Excel and tried to come up with a best estimate of where we thought we were at," Atwood explains. By contrast, she says, "Webplan gives us a true picture of our inventory efficiency." Agilent is one of a growing number of manufacturers that have found the need and were willing to invest in real-time supply-chain planning systems. "Due to the highly volatile nature of our designs, it was difficult to turn our systems over to a contract manufacturer," Hunter explains. "Webplan allowed us to literally split our bill of materials." Standard parts were farmed out to a contract maker, while Agilent continued to make or purchase the rest on its own. In this way, the company was able to keep costs low while ensuring quality. For some companies, the ability to locate a customer's order -- in production or in shipment -- is valuable. Norfolk Southern, for instance, is using Hyperion Solutions' software to provide some 2,000 line managers with timely reports on where each railcar is in its system. "They are using RFID technology to scan and read each car's location, and they also know how full that car is," says John O'Rourke, senior director of product marketing at Hyperion. The data is then used to support Hyperion's reports for freight managers. "It helps them run the business and decide what to put in their railcars," O'Rourke adds. In a somewhat different application, Hyperion Solutions also is being used by pharmaceutical firm Abbott Laboratories to track costs associated with some 1,500 products. "Abbott is able to understand the profitability of its products at a very granular level," O'Rourke points out. "These tools allow companies to get very accurate information on which to base decisions about how to allocate resources and price their products and services." Agilent also is harnessing Webplan to check key business metrics each day. "We use the software's 'Live Scorecard' feature, which is a dashboard that allows us to monitor certain performance metrics daily and to set certain scenarios to evaluate risk," says Agilent's Hunter. Monitoring costs and profitability, in fact, is a key driver of real-time data at some companies. At New Zealand-based Fonterra Dairy Cooperative, systems manager Andrew Gavriel reports that the company is currently rolling out Hyperion's Business Modeling package with the goal of tracking daily costs at each of its plants. "In terms of sales performance, it is intended to be able to monitor profitability on a daily basis," Gavriel says. Aspect Medical Systems, a manufacturer of brain monitoring systems, uses Cognos to develop current business performance reports within two days of a business user's request. "We used to spend hours each week mining data for alignment of actual shipments versus forecast and build plan requirements," says John Coolidge, vice president of manufacturing. "Cognos has enabled us to completely eliminate this process. Within two days of the request, we have a working report that is current and used by all users." Aspect Medical's goal is to give all its employees a real-time view of the company's operations and performance. Using Cognos DecisionStream, Aspect Medical is able to tie together disparate sources of data from throughout the company. "We have given our users real-time visibility into business operations," adds George Papamitrou, director of information services at the Burlington, Mass.-based firm. "The powerful analytical capabilities in Cognos' PowerPlay provide an entirely new way of viewing and working with data, allowing Aspect to maximize investments we have already made in our data warehousing." Once again, Aspect Medical's application of a real-time system is useful to planning its supply chain. The company's supply-chain planners can see what products are in demand and make sure that production to serve that need is sufficient. This also helps the company to schedule specific locations and product lines. "Users can see not only what is going on, but also the business driver behind it," says Jeff Barrett, vice president of corporate operations. "The bottom line is better decision making." Another manufacturer, Delta Apparel Inc., is taking data from its ERP system to support a real-time look at sales, inventories, and order backlogs. A producer of high-quality knit apparel garments, the company uses an online analytical processing (OLAP) system from Applix. "Applix's TM1 enabled us to capture real-time data from our ERP system to understand the interdependencies and 'hidden' information among and between inventory, sales, and order backlog," says Charles Sutlief, vice president of marketing at the Duluth, Ga., manufacturer, which has offices and plants in the U.S., Mexico and Central America. "The solution has empowered us to make strategic business decisions based on up-to-date information." Novamex, a distributor of imported Mexican foods based in El Paso, Texas, is moving from depending on Excel for simple business reports to utilizing Cognos' high-powered business intelligence system, which the company is installing. "Our CEO said we should have stronger technology in budgeting and reporting," says Karla Legaspy, Novamex team leader. "We saw the potential, and realized how important it could be to Novamex." The company, with 400 employees, will start with budgeting and reporting and later add data consolidation and automated balanced scorecards to monitor key business data. Novamex wanted a system that would not only automate the consolidation of data companywide, but also put it into a meaningful report format, while also being scalable to accommodate growth "Today, reports for our C-level team have to wait until the end of the month," Legaspy says. "And while we do have something of a balanced scorecard with some indicators, it's posted on a bulletin board in our building and not always updated," she says. "Today our analytic system is 'walk around and ask everybody.' Once we have all this in real-time, we can branch down from our strategic goals, all the way down to key performance indicators."

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!