Manufacturing industry is the poor relation among corporate IT users.
Manufacturers are less imaginative, less dynamic and down-right behind when it comes to use of technology compared to other sectors such as finance, retail and even local government. And the severe pain traditional manufacturing software companies such as SSA have gone through over the past three years is further evidence that manufacturers have ignored the PC-driven client-server trend to the extent that it has almost passed them by.
This is the considered view of many IT observers in the manufacturing sector. But it seems the PC offers factories untold benefits that, as client-server technologies make way for Web technologies, manufacturers are beginning to discover. Companies like the agrochemicals division of Zeneca, packaging giant Lawson Mardon Packaging and electronics manufacturer Densitron may not be introducing modern PC-based systems on the shop floor, but they are using such systems in other parts of the business to bring efficiency gains and to identify new markets (see boxes).
Dave Bennett, independent manufacturing consultant and former factory boss at McDonnell Information Systems (MDIS) in the days when it manufactured hardware, claims manufacturing industry in the UK has "just sat back" from the development of client-server software "and they're missing out".
Although some UK manufacturers have adopted such software, such as that from the likes of SAP, Baan and Marcam, many more could benefit from the way client-server software allows greater and more flexible access to information about the manufacturing process. Bennett claims: "The more information you can see, the more changes you can make to improve the manufacturing process."
Bennett's view is all very well in the world of big IT budgets, but manufacturing is often a high-risk, low-margin game with only medium-term returns. Basic systems have survived on the shop floor, the so-called process control systems, because they are simple and easy to manage. And in the rough environment of a factory, the standard dumb terminal is quite sufficient for data entry and feeding-back basic information for machine operators.
These factors have made the shop floor the almost exclusive domain of the terminal, with the PC sporting features unnecessary for such an environment.
Sony, which makes TV screens in the UK, is a classic example of the manufacturing industry's approach to IT. Instead of adding bells and whistles to its eight-year-old Unix-based process control systems, which was developed in-house, the company has concentrated on areas where PCs can make a bigger difference.
In the past year it has adopted Tropos version 2 enterprise resource planning (ERP) software from Strategic Systems International - which enables companies to communicate with suppliers, customers and subsidiaries electronically - and a financial package from Coda. Both systems are client-server, using all the potential of modern Windows PCs, and the company is also at the early stages of building an intranet to allow staff to share information using Web browsers.
Sony left its ageing process control system alone, except for upgrading the back-end database to Oracle. Although Sony's MIS manager Hal Morioka admits his team will develop a PC-based front-end for his process control system next year so that office staff will be able to access data from it more easily, it is clear that IT priorities for manufacturers are more likely to be in areas off the shop floor.
Morioka claims the PC comes into its own in the office, where administrative staff and managers use Email, the ERP system and Microsoft Office to run the business.
It may be that manufacturing industry's reluctance to launch themselves head-long into sophisticated companywide client-server applications is one of the reasons why some software suppliers have struggled in recent years. SSA, which has a large manufacturing-sector user base of its software for IBM's AS/400 mid-range machine, began losing money soon after attempting to move its software to Unix and switch to client-server techniques. The company struggled to complete the move as German competitor SAP, which doesn't depend on manufacturing customers as SSA does, developed a package, that while costly to install, has gained respect for its functionality.
The manufacturing sector also suffers from being made up of a wide range of niches, with, at one extreme specialist suppliers of large custom-build products such as power station turbines, through to batch production of discrete components such as car parts and, at the other extreme, non-stop mass production of powders and liquids, such as pharmaceuticals and petrochemicals.
Although the basic concepts behind good manufacturing - referred to as materials resource planning (MRP) or manufacturing resource planning II (MRP II) and largely unchanged over the past 10 years - are fundamentally the same for any type of factory, process control systems vary enormously in complexity and style depending on whether the product being made is a one-off, a discrete component or something that is stored in barrels or shoved down a pipeline.
This results in a large number of very specific suppliers of process control software - all experts in a certain field. As such, many manufacturers are like Sony in that they will mix and match their systems depending on "best-of-breed", rather than go for a complete system from a single supplier.
Baan has responded to this by getting other companies to set up the latest version 4 of its software to suit certain industries and to cut some of the pain from installing a client-server system.
Systems integrator Origin, which has 500 people supporting Baan software in the UK, is developing the version for electronics manufacturers. Peter Neal, manager of Baan implementation for Origin UK, says the initiative means that 80% of the functionality required by an electronics manufacturer will be in the standard set-up. "We've developed a template for the make-to-order or make-to-stock environment, to cut down the amount of work needed to set up the system for an electronics manufacturer," Neal says.
He adds that this, combined with Baan's ability to automatically generate client software to suit particular users - called Dynamic Enterprise Modelling - allows swift installation of the system. "It allows the rapid generation of desktops for users. You define what the user needs to do and the system automatically generates a desktop which only shows the elements that user needs."
Bennett insists that manufacturers are not making the most of the PC.
Despite the logic behind keeping terminals on the shop floor, Bennett believes many companies are losing out. "I'd like to see every manufacturing company, large or small, using PCs in the workshop. They don't need a fully-functional system, but would benefit from up-to-date information on the manufacturing process, like defect-rates and throughput-time, that will allow decisions to be made at the right time."
PCs could revolutionise one particular part of the manufacturing sector, Bennett claims. That part is the small factory, of which there are thousands up and down the country who are currently ignorant to the high-cost benefit of monitoring the manufacturing process with PC systems. "Companies that are fairly small, with less than 100 staff, and that don't have a complex manufacturing process, could run their whole manufacturing process on a single PC," Bennett says.
Densitron: undisturbed view of the company
Electronics manufacturer Densitron International was so successful in introducing PC-based decision-support software that it was able to wipe-out a whole layer of management.
Densitron IT director Charlie Lugosi says the company was faced with some managers with nothing to do after he installed a system based on Information Builders' software to allow senior managers to view business data generated by existing systems. "Some middle managers were employed just to create reports for senior managers, but this tool replaced them," Lugosi says. He adds that it wasn't just that the system allowed the management structure to be flattened, but it also improved the way the company was run. "The traditional way was that middle managers were asked to make a report, but they would want to paint themselves in a certain way or have their own view. With the new system, top managers have an undiluted view of the company. They have learned a lot."
After the system was installed there were "one or two casualties", Lugosi says, and two other middle managers were found jobs in different parts of the company. He explained that after senior managers began using the system, they saw some conflict in what the system was showing them and the picture of the company provided by middle managers. Lugosi says: "I didn't like it, I was blamed because I put the system in." He adds that he staff savings were a by-product of the system which was designed simply to improve management's access to data, and therefore help them make decisions.
Lugosi chose Information Builders' EDA/SQL middleware and FOCUS Six reporting tool to get at the wealth of information contained it the company's in-house-developed accounting, stock control and manufacturing software running on a Digital Alpha machine.
Lugosi says the decision to use Information Builders was because most other reporting tool suppliers offer middleware from a third party, but as this was an important part of the mix Lugosi wanted both parts to be supported by a single supplier. "There was a requirement from the top for any given system to have a push-button-and-see type of approach. High-level managers hate entering commands. They want to press a button and see a result. You can only provide this with a PC and a graphical interface.
And we needed middleware that would transfer data out of the existing database and put it locally on the PC," Lugosi explains.
The result was a system that allowed managers to easily view such information as sales figures by product, area or customer, overheads associated with each product and details about where each product is manufactured. "In the past, this level of reporting and analysis could not be achieved," Lugosi says.
Such information would have previously taken at least two days to pull from the database and present in a report. The system has opened the eyes of top managers to the capabilities of modern software, Lugosi believes.
He is now under pressure to develop the tools to give a greater variety of reports. He says: "When you have good transactional software, the managers don't appreciate it. Now they can see it, they appreciate it much more.
They now have an undisturbed view of the company." The u50,000 system, that has three users in the UK and two in the company's US operation, has already benefited the company by allowing it to alter sales techniques after it found that the sales of many of its products reached a peak then dropped off suddenly. "Managers don't want to see results, they want to see trends," Lugosi says.
Zeneca: planning future production
There is more to IT in manufacturing companies than systems for monitoring the production process and keeping control of the finances, as the agrochemical division of Zeneca proves.
The company is installing a sophisticated PC-based system that will operate at the leading edge of its business and help the company plan production for the future.
Zeneca Agrochemicals, which makes products to help farmers combat insects, weeds and plant diseases, decided it needed to build a system to automate the way it gathers market information. In such a big company, with u1.5 billion turnover representing over a quarter of Zeneca Group's business and operating world-wide, the collection of marketing information is a diverse process that would benefit from automation. Data had to be extracted and put into reports manually to give Zeneca an overall picture, which the company described as an inefficient and time-consuming process.
Zeneca was under pressure in a market that was becoming increasingly competitive and where legislation was becoming ever more complicated.
Added to this, the ability to see trends is crucial in an industry where product development times average 12 years.
David Scott, herbicides product manager for Zeneca Agrochemicals, says: "Information is the key to success in the agrochemicals market. We need focused and quality information to enable us to react quickly to change and, more importantly, predict change." The company awarded the project to Origin. The system, based on Oracle databases running on LAN servers and accessed by Windows NT clients, has been installed in the UK, France, Italy, Spain and Germany. Over the next year 11 more countries will be rolled out covering Latin America, the Asia Pacific, South Africa and the US.
The result will be a manufacturer that is able to react more quickly to change and that is able to share marketing information between divisions and the companies UK headquarters.
Lawson Mardon: electronic communications
Lawson Mardon Packaging has invested over u3 million in a system to help it communicate electronically with customers, suppliers and between the company's own sites.
Strategic Systems International is supplying LMP, which makes packaging for consumer goods in food, tobacco, healthcare and cosmetics industries, with its Tropos 2 software which is designed to allow the company to create direct links with factories and provide electronic data interchange (EDI) with suppliers and customers. The system is also designed to control the manufacturing process, from ordering materials to optimising production.
The system is what is known as an enterprise resource planning (ERP) system, a phrase which has taken over from manufacturing resource planning (MRP II) as the manufacturing software suppliers buzz-word. In a nutshell, ERP is about tying together multiple sites with customers and suppliers in a sort of virtual organisation, with benefits of reduced administration and more streamlined production.Independent manufacturing consultant Manufacturing consultant Dave Bennett claims ERP is often just technology for technology's sake and simply a technique for software suppliers to sell manufacturing companies something new. "With ERP, I have to ask the question: 'What the hell is it?'," Bennett says. But, he does admit that in companies with multiple sites, such as LMP which is installing its ERP system in five sites including France Germany, Switzerland and the UK, ERP does have a place.
This ability to communicate effectively between sites was crucial to LMP. Rudi Lepomme, LMP's information systems director, explains: "For example, when buying printing inks, the purchase order could be raised at the UK's Newcastle site, printed in Switzerland, obtained from a supplier in Germany and delivered to an LMP site in France." The system is based on a central Oracle database and customised Windows clients depending on job function and language - either English, French or German. Once the software is fully installed, the company should be able to gain the information benefits of working together at a single site with a single IT system, despite being spread over five sites.
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