ERP : THE GREAT EQUALIZER- by David Blanchard

    Manufacturing used to be a much simpler process than the convoluted melange of hardware and software choices that confrontmanufacturers today. Once upon     a time craftsmen built things for local customers, with quality and price being the primary concerns of the buyer. As more products became available,     convenience was added to the mix. If a local craftsman had good quality and a reasonable price, that person usually got the job over someone far away who     might have a better price.Increased mobility changed the situation somewhat, but the differentials had to be high to warrant traveling any significant distance for a     commodity product. Given a unique product, available in limited locations, a buyer might justify a long trip or high shipping costs. COMPUTING POWER and the     ability to effectively manage and integrate information turns mid-sized manufacturers into international powerhouses.

    The traveling peddler attempted to circumvent this logic by bringing the products to the consumer, but often had to battle the image of a fly-by-night competitor.     Buyers wanted to be able to call on the maker in case of trouble.Being aware of unusual products wasn't easy in the days before advertising. A person might see     a product carried by a foreigner and inquire as to its origins but not have the resources to contact the maker and order a similar product. Due to the time     necessary to move information, an order could take years to be fulfilled. The "supply chain" began with obtaining an address for the manufacturer, sending a letter     of order and waiting for a response.

    Nowadays, speed of information flow has made manufacturing a global, not a regional or local business. Coupled with advertising, the ability to move information     at the speed of light has opened up all corners of the globe to makers of all products. When a Japanese company develops a new "virtual" pet toy, children in     Europe and the United States clamor for it before the tooling is delivered. Internet sites that have replaced EDI as a medium for processing orders light up with     traffic. Television news features these giga-pets, talk show hosts make fun of them, educators belittle them and kids grow tired of them in record time. The pet     rock of the '90s comes and goes within months.

    Blame it on information. The computer has, in the words of one prophet, made making mistakes so much easier and faster, what did we do without them? It has     also allowed small companies to become giants in their industries by giving them the greatest equalizer since the Colt pistol arrived in the Old West. Where only     the upper reaches of the Fortune 500 could afford computing power in the 1950s and 1960s, starving students have equal power on their desks in the 1990s.Mid     -sized companies have access to the same quality of information as General Motors. The question is no longer, where can I get the information I need? The     question is now, what do I do with all the information I have?

    The Answer Is... ERP

    We would argue that the answer is much more complex than the question. Information must first be defined, separate from the delivery mechanism, data. Data     does nothing but fill computer drives until it is presented in an intelligent form to people. Then it becomes information. There are many computer programs     designed to convert data into information, usually for a specific purpose or function. Shop floor workers need one level of information, in real-time, about the     process or production; executives need a different view of that data for long-range planning and short-term deployment. Same data, different information.In     many situations, data are available but uncollected. This could require manual entry, bar code scanning or sensor monitoring to correct. In other cases, the data     are collected but stored awaiting a request. Data mining and data warehousing applications involve this aspect of information development. Databases are     becoming larger and larger as companies find more and more data to store. But all those bytes are still just data.Answering that call, software developers have     looked for ways to bring many divergent requirements under a single, if huge, umbrella program called enterprise resource planning or ERP. What ERP strives to     do is combine the needed functions of every application a company requires to do its job and integrate them all together.

    "ERP allows organizations to balance customer demands impacted by multiple interrelated items and multiple plant locations," explains Chip Robie, practice     general manager, manufacturing, with Tompkins Associates (Raleigh, N.C.). "ERP adds applications for financials, supply chain, and distribution and requirements     planning for multiple sites. It facilitates intelligent resource planning in the face of rapidly changing constraints such as materials availability, market readiness,     plant capacities, personnel certification and business costs per location." In short, Robie emphasizes, ERP systems will allow decision makers to champion "an     intelligent, agile and responsive organization in the global marketplace of the next century."

    ERP is a hot trend in manufacturing/information technology circles right now, and all indications point to it getting even hotter. Advanced Manufacturing Research     (AMR) estimates that the worldwide ERP software market grew from $7.2 billion in 1996 to $9.6 billion in 1997. "Much of ERP's market growth is driven by an     increasingly global business focus," observes Gisela Wilson, AMR's director of primary research. "Manufacturers are scrambling to replace MRPII systems with     software that will ease the integration of business processes and support multi-national and multi-site business environments."

    In modern manufacturing operations, information starts at the top and the bottom simultaneously. Data originates at the machines, the process and the workers. It     is collected by sensors, controls and operators. It indicates what is being made, how and where, when it will be done, and why it won't be on time. Programs such     as manufacturing execution systems (MES) and shop floor control take the data and create the information, passing it up the chain to the planners and product     developers. Here the data are integrated with other bytes from advanced scheduling and planning systems to produce a report and forecast.Entire forests have     been leveled addressing the problems of process control, but what about the problem of information control? Columbia Contech (Vancouver, Wash.), a     manufacturer of electric equipment, control systems and regulators, was confronted with just such a problem, and found its solution in an ERP system provided by     DataWorks (San Diego, Calif.), a leading vendor of ERP software and solutions.

    "Before we got our ERP system from DataWorks, we manually costed our jobs when they were completed," says John Jansen, Columbia Contech's vice     president of administration. "Now we do it through the system. Overall control, as far as control of information, has gotten much better. We enter our bills of     material (BOM) once, whereas under the old system we had to enter it three times. The BOM under the old system didn't have any linkage to the inventory     system. We had to go out there and manually look at the bill, see what we had on hand, and then order after the fact. This is, in my mind, the biggest benefit of     our DataWorks ERP system to date. Our previous inventory system was, I'd guess, 50-60 percent accurate despite everything possible we did to make it     accurate. Right now it's probably close to 100 percent accurate."ERP also can make a difference at the shipping and distribution end of a company. According to     Ashley Mills of the British controls company Eurotherm, which also has implemented a DataWorks solution, "Our ERP system has cut out duplications, delays     and mistakes on delivery times, and manufacturing has become more flexible. Shipments can go direct, and are therefore smaller and cheaper. In addition, there's     no need to stock materials or finished units, so stocks don't become obsolete and have to be written off."

    Even before the manufacturing operation gets involved, information is necessary, such as in the sales effort. Steve Cobb, IS manager at Action Instruments (San     Diego, Calif.), a manufacturer of computer peripherals including networked input/output products, explains, "As the pace of the typical sales cycle increases and     the ability to access more information increases, information systems must be able to keep pace and even improve the process. The most valuable information to     our overseas people is product and customer information. It is exceedingly important for all sales people to have a complete view of all activity that occurs with a     customer. This would typically include sales history, but now must include trouble calls, service requests, repairs and any other activity from general questions to     product inquiries."

    This comprehensive access to information is now possible at Action Instruments thanks to a solution embracing both DataWorks' ERP software and Pivotal     Relationship software from Pivotal Software (Vancouver, B.C., Canada), a supplier of mid-range customer interaction applications. DataWorks recently signed     an agreement allowing it to package Pivotal's sales force automation technology with its ERP solutions for mid-range manufacturers. "The Pivotal Relationship     Software provides a complete view of customer relations, and is a natural complement and front-end to the DataWorks system," Cobb notes.

    Data is Flowing Like a River Systems in executive offices develop long-range plans and product specifications, marketing programs and quality initiatives. Plans     are formulated, orders are taken and products are configured somewhere between the process and the president. The supply chain is evoked to bring purchasing     requirements and material requirements into harmony, on time and on the spot where it is needed. Invoices are issued and paid, and business proceeds at its own     pace, limited only by the speed of the computers orchestrating it all.

    We have become accustomed to more of everything at every stage of our lives, and we get testy when systems don't produce. Fifteen years ago, microprocessor     speed was measured in single digits (the 8088 in the original IBM PC clocked in at 5 MHz); today, 200 MHz is comparable to a compact car on the Autobahn --     nice, but not fast enough to keep up with traffic. MIPS have been replaced by GigaFlops as a test of value. Faster means more, more means better and better     means whipping the competition. To handle the capabilities of the hardware, we insist that the fastest, best-mannered software be available at every level of the     company. The data must flow to where it is needed, immediately.

    Again, we are seeing the difference between data and information. Data flows throughout the ERP system, entered once and available everywhere. But until it is     needed, it is not information. Once it is called for, the application creates information from the data and presents it in the best possible manner for the user     operator, executive, order taker, maintenance worker, systems analyst or whomever -- or the equipment -- machine, control, monitor, sensor, computer, EDI     system or whatever. We are now seeing the advantages of using this concept of data flowing to produce additional productivity in other areas through the use of     the technique called work flow. Logically, work flow can be embedded in data flow so the computer can determine the best flow of both. The computer     augments the system designer by allowing immediate simulation of work flows to prove -- or disprove -- the concepts. Work flow and demand flow work     together, one from the inside out, the other from the outside in.

    Steve Maynard, CIO and vice president, information technology, at Wiremold Corp. (West Hartford, Conn.), a manufacturer of current-carrying and noncurrent-     carrying wiring devices, explains WiremoldÕs approach to demand flow: "Our goal from a systems perspective is to be able to instantaneously drop an order onto     the warehouse floor, pull the product and ship it that day. When the order is filled, a signal is generated to the upstream process, creating a demand on the     appropriate manufacturing cell for the Kanban quantity -- the replenishment of exactly what was shipped. As products are manufactured, naturally raw materials     are consumed. This also releases appropriate Kanbans to our suppliers who work on a blanket purchase order. The Kanban notices, which represent releases to     those purchase orders, take the form of a ticket moved via fax or picked up by the supplier during daily deliveries."

    Using DataWorks ERP software, Wiremold hopes to reduce its order-processing time from 24 hours to two hours, which will allow the company to better     leverage its manufacturing flow system. No more wall charts showing the flow of material, available capacity or labor. It is all there now on the ubiquitous PC     screen. And information is there, too, converted from data and presented to the user or the operation in the most appropriate form. The human-machine interface     has become the graphical user interface; productivity has increased as information is not just available but understandable.

    ERP is not confined within the walls of a single entity. Its data flows go out to suppliers and vendors, customers and prospects. Information is presented on     Internet sites and transferred to other computers on a network at the speed of light, or around the world via cable and radio beams bounced off satellites. Nothing     equals the computer for making the world a much smaller place. What you find out can be shared with another person or even millions of people at the same time     you learn it yourself. Design and product development can be a collaborative process without barriers of space and time. Groupware, data management and     communications combine to allow everyone to sit in the same office, regardless of where they are physically located.

    "E-mail and the World Wide Web have exploded onto the scene as mandatory business requirements," observes Action Instruments' Steve Cobb. "They have     helped even the playing field to a point where the size of a company is far less apparent and in some cases unimportant. The Web offers a great resource and     network capability that allows us to put more product information and customer service information in the hands of our customer base. We can also offer direct     ordering of products and services and traditional order management services through the Web and improve our customer interaction. This should ultimately lessen     our cost per order and allow us to focus more on customer 'wow' and less on traditional tasks."The drawback to all this speed and capability is the drive for even     more. Humans are fickle creatures. People who years ago couldn't share files with the next workstation are now complaining about the time it takes to download     a Web page from the Asia office. And software companies are listening. The functions are being developed, the concepts are being incorporated, the changes in     work methods and reengineered business processes are being accommodated. Thanks to the emergence of cutting-edge global IT solutions such as ERP,     manufacturers have a better-than-even chance of keeping up with the increasing demands their customers are putting on them.

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