The following samples are all copyrighted by Putman Media, Inc., and are reprinted with permission.

October 2001 - e-Business:
Ebusiness--Incoming! Give Suppliers a Closer View
of What's in the Pipeline

Info you can use:

Why you should share transactional information with suppliers, and
What it takes to make it actually happen

By Jeff Berger
September 21, 2001

Most manufacturing companies have long since concluded that supply chain automation vastly improves the efficiency of relationships between companies and their business-to-business (B2B) suppliers and customers.

What would happen, however, if they took that relationship to the next level: giving suppliers visibility into their sales transactions, so suppliers gained an instantaneous heads up about what's coming next? The question has particular merit in this tumultuous economy, where conditions seem to change hourly.

While many companies agree that transactional information-sharing with B2B suppliers would be an extremely productive and efficient way to do business, most companies don't do it and don't plan on doing it any time soon (although their plans appear to be moving in that general direction). Those that do do it, though, are even more enthusiastic about the results than those that are still mulling it over.

An Idea Whose Time Has Come
As part of what he calls his Supply Chain Collaboration Enablement Model, Tom Ryan, director of systems integration services for eSYNC International (www.exsync.com), a consultancy and systems integrator, offers a how-to for tightening the elements of the supply chain, including integrating transactional information.

He warns, however, that "the road to collaboration is filled with potholes, confusing intersections, bridges under construction, and poorly marked detours." The reason: Collaboration is built on relationships in which each party would like to look deep inside the other's corporate closet.

That said, Ryan's model describes the process as a four-tier structure that includes: information integration, events monitoring, visibility, and process management.

Because parts of an enterprise's internal application suite often don't talk to each other, the first step is to solve that "foundational" issue, he says. Hence, information integration should be the starting tier.

Is it a huge hurdle to move from there to the point where applications can be integrated between totally distinct enterprises? "Technologically," Ryan says, "there's no difference between integrating internal applications versus integrating information with trading partners," a point which perhaps doesn't occur to many business owners. "What is different is who owns which ends of the pipe you want to construct, and what negotiations are entailed in building it," he says.

In those negotiations, endless detail questions must be resolved, concerning such basic issues as how often the partners talk, how they talk, and what kicks talks off: events, time, or other factors.

"It's like developing an industrial park. No matter what the final park will look like, you still have to start by clearing the trees, building the roads, and laying the wires and plumbing," Ryan explains.

Once information has been integrated, the next step in Ryan's structure is event management and alarming. Here, company officials arrange mechanisms under which they are warned when anomalies occur. They are alerted to events or non-events, such as a drayage carrier in Thailand failing to pick up a shipment in time to get it to the docks before the ship leaves.

In the third tier, visibility, Ryan describes only two current forms: shipment and inventory. "Either way, if Fred short-ships you for a major promotion, you have a problem that requires resolution," he says. "Visibility lets you find where the stock is that you need for that promotion."

The fourth layer is intelligent response, which examines typical anomalies and resolves them by using the same solution set that managers routinely use in analogous situations.

"Technology exists today that allows companies to do all of this," Ryan says, "to respond to rapid changes in order levels in scattered geographies. webMethods (www.webmethods.com) is a big player in the information integration space, and they have relationships with players in the three other tiers. In the top two tiers, Solarix is a key player. They use webMethods for integration. Descartes plays very well in all four tiers, and Viewlocity plays all four layers as well."

The bad news, according to Ryan's estimates: Less than 20 percent of companies share transactional information today. "It's very practical for companies to do this," he adds, "and the pricing today is very reasonable; licensing may be under $50,000. You can get it going in 90 days. You take a deep breath and you do it."

Once set up, systems that are capable of responding to variations in transaction levels can be threshold-tweaked with no human staffing required. "There's a lot of press about the collaboration relationship between Procter & Gamble and Wal-Mart," Ryan recounts. "What they don't tell you most of the time is that they took 15 years to get there ... and there was a lot of finger-pointing. Technologically, we can do all this stuff today. Relationship-wise, we can't."

Besides being concerned about intrusive access into each other's closets, what else constitutes a weak link in transactional information-sharing technology?

"Carriers' ability to communicate with shippers is a weak link," Ryan says. "Ocean and air freight companies are reasonable at communications, but bottom-feeder trucking companies you buy because they give you commodity pricing don't have good communications.

"Even the large carriers have a problem delivering timely transport event notification," he continues. "They've focused on proof of delivery, not in-between status. They know weight and quantity, but they have no idea what's in the boxes or on the pallets. That's a problem if your transactional information tells you that you need something on that truck to go to a revised destination."

Kevin Hume, formerly responsible for fulfillment at eToys, is eSYNC's director of consulting services. "The sophisticated eToys distribution system was designed around direct-to-consumer fulfillment," he says. "Electronic manifests sent to suppliers included tracking information for the carriers' labels-–FedEx, UPS, et cetera. Customers accessed shipping information both on the eToys' and on the carriers' sites."

Sometimes things went wrong on the supply side, however. For example, eToys had little technology in place that ensured that toys advertised on one coast were sourced there and not across the country. In one instance, eToys TV ads promoted toys that attracted lightning bugs. Many of the toys were in distribution centers on the West Coast where there are no lightning bugs.

Eight Miles High and Ready to Transact
With 180 core suppliers, some 800 suppliers overall, 43 global locations, and 17,000 customers, Aviall is the world's largest independent distributor of aircraft parts, as well as the largest independent provider of supply chain management services. Some 40 percent of Aviall's customers are airlines; the rest are in general aviation.

Aviall has created an ebusiness strategy to link its entire supply chain and provide sales and marketing services to its supply chain management services customers. When asked who their customers were, Aviall's suppliers in the past could only point to their distributors; they couldn't pinpoint customer types, aircraft types, or who owned or operated the aircraft.

"The first thing we started to record was fleet information," says Joe Lacik, Aviall's vice president of information services. "We share that with suppliers, so they at least know what aircraft their end users are operating and what parts they're buying.

"The whole game for us now," he continues, "is to gain as much information about the customers for the suppliers as possible. It's a bit of a risky strategy, since the fear is always: 'If you tell your suppliers everything about your customers, why don't they just bypass you and go direct?' We provide a full service to our suppliers and we think the risk is worth it."

Aviall uses the Web to help its customers interact with information. Customers logging into Aviall's customer-only site access future orders, back orders, storyboards, previous orders, invoices, manufacturers' specifications, Federal Aviation Administration certifications, and more. Suppliers can see what inventory is available and where it is, and what inventory is moving--currently without customer identification, although Aviall is debating adding that.

Aviall uses the Plan, Extend, and Link modules of a collaborative supply chain management program from Xelus (www.xelus.com), which display all of its forecasting models online for its suppliers to see.

The result is the kind of synergy for which manufacturers and distributors hope. "The idea," Lacik says, "is that our suppliers will come online collaboratively with us, look at these forecasting models, and together we'll develop and input the information that gives us the best possible prediction of what customers are actually going to buy and how much our suppliers should actually manufacture."

Supplier access also applies to transactions. Aviall is integrating its customer order entry function into its Siebel (www.siebel.com) system, which enables suppliers using BroadVision's (www.broadvision.com) ecommerce application suite on Aviall's Web site to securely see what's happening from the first customer touch to the final order.

"Any changes or anything else of significance can immediately become visible to suppliers," Lacik says. Xelus recently rolled out phase two, delivering automatic instantaneous messaging related to emergency/stocking situations of which suppliers should be aware. It can communicate fluctuations in orders, cancellations, and other events.

Demand for Aviall's supply chain management services came from its suppliers. "One of our core competencies is warehouse and inventory management," Lacik says. "Some suppliers are asking us to act as an ASP (application service provider) and put Catalyst [warehouse management system--www.catalyst.com] at their sites, so we can manage their inventory for them, provide all the reports, and link that information and all customer transactions directly into our forecasting and purchasing machines."

Lacik says distribution is "a tough game," squeezing distributors between buyers, who want lower prices, and suppliers, who want higher margins. He advises companies considering sharing transactional information to consider where they're taking the business.

It starts with strong leadership, Lacik notes--in Aviall's case, CEO Paul Fulchino. "Paul is a visionary," he says. "When you're going to completely transform a business, you have to believe that based on your knowledge of the customers, the suppliers, and the market, the ideas are really going to work--and you have to remain committed to them."

Give and Take
Customer and vendor relationships are typically give-and-take, says Todd Conrad, information technology manager for Powerex, a Youngwood, Pa., manufacturer of high-powered semiconductors used in automotive and military electronics.

Since early last year, Powerex has been collecting increased amounts of information from its customers and vendors via the Internet with MAPICS' (www.mapics.com) Point.Man enterprise system. "Once you start building those relationships," Conrad says, "you're getting more information on their cycles, so you can place or fulfill orders that better coincide with their cycles. The real payback is that you're able to drop things out of the process, saving time and money." On Powerex's "drop" list is a 40-percent reduction in support calls related to order-tracking.

"Everybody hesitates to move into these close relationships," Conrad says, "but very few resources were required to put it in place, and the payback is tremendous."

Clearly, one cause of hesitancy is concern about sharing confidential data. "It goes both ways," Conrad believes. "You open up to suppliers and customers, and they open up to you. For us, sales have increased, and supplier pricing has decreased. We keep supplier inventory here and don't pay for it until we use it. Suppliers know electronically when we use inventory. That's another benefit."

Making Ducks Line Up
Another significant benefit of real-time order tracking/transactional communications comes from customer order implementation in B2B situations.

"That's where you're trying to eliminate your expedite costs, cut rush orders, and exceed customer delivery expectations," says Chris Barnes, director of business development for Majure Data (www.majuredata.com), whose technology gathers data which can be fed to systems that can, in turn, share transactional information with customers and supplier. "Customers check orders seven times on average. Let them do that online, and your savings are huge."

Before offering supply chain visibility/transactional information to partners, however, businesses must ensure that their executions are correct, Barnes adds. "You have to ensure that all the elements are working fine," he notes. Otherwise, it won't work.

Tower of Babel Challenges
Cody Menard, chief technology officer for Covasoft (www.covasoft.com), a developer of ebusiness applications management software, says many challenges face companies seeking to track transactions from the time the order is received until it ships to the customer, from one application to another and across enterprise boundaries.

"The application is the first challenge," Menard explains, "since many don't provide all the information needed to track transactions. For example, there is no consistent way to represent a transaction across applications. 'Well-behaved' applications provide a consistent metric or attribute enabling the transaction to be traced across applications. In the securities world, transactions are at least time-stamped. But you don't have that in manufacturing."

Another challenge, Menard says, is that customers and suppliers are represented inconsistently across applications, although the Business Process Management Initiative (www.bpmi.org), a group that is defining ebusiness process standards, is trying to introduce consistency. To interact, different applications must recognize inconsistent supplier/customer data and translate it to ensure its usability within discrete applications.

After transactions pass through applications, they must go through process steps, each of which begins with results from the previous step. If those results are in a format the subsequent application can't process, nothing happens.

Data security is also an overriding concern to prospective users. Menard suggests using various authentication techniques and the Secure Sockets Layer to keep private data private. "Private exchanges work; bigger partners impose access requirements. But cooperation is required on all sides," he says.

How do you overcome these challenges? Menard offers these suggestions for application vendors and users:

· Vendors must ensure that distinct sets of data within applications contain consistent sets of attributes so management systems sitting outside the environment can recognize and extract specific types of data (for management reports and other uses); and
· Application vendors must provide consistency in data treatment so all applications used throughout the process can readily recognize and process transactional data generated by other applications.

Menard also suggests that companies perform impact analyses to help clearly identify problems which transactional systems uncover, enabling a more focused corporate response.

June 2000 -- Engineering & Automation
Product Design, Collaboration, and Communication

By Jeff Berger

Info you can use:

• Computer-aided design (CAD) moves beyond the pure engineering realm and into the supply chain

• Building a team of widely dispersed designers, engineers, managers, sales, and marketing personnel over the Internet

• The difference between synchronous and asynchronous collaboration

• Collaboration reduces time to market

When computer-aided design (CAD) first came on the scene in the 1970s, there was little interplay between corporate engineering departments and the rest of the world. Then, corporate executives simply told the engineering department what to do, and the engineers did it.

Fast-forward 25 years. Manufacturing in industrialized nations has changed dramatically. CAD is endemic, as much a part of everyday product design as bills of materials or drawings on the backs of stereotypical envelopes.

Furthermore, manufacturing today frequently involves geographically dispersed operations, sometimes on different continents, with each operation handling a small, but important part of a global project. But ultimately, all those parts must come together perfectly.

CAD's Huge Impact on Corporations
As a consequence of worldwide competitive pressures and the new global economy, no manufacturer hopes to survive today unless it sings a genuine time-to-market mantra. One widely revered strategy for achieving this involves globalizing product development and manufacturing to leverage the best available minds--and economies--in pursuit of central quality and technology objectives.

But pooling intellectual assets to achieve competitive results is a tricky business. Companies must overcome language barriers, conflicting time zones, and sometimes fuzzy Internet connections, not to mention differences of opinion.

Nowadays, medium to large-sized companies are achieving faster time-to-market and quality advantages in the extended enterprise through globalized, collaborative CAD. Smaller companies are accomplishing the same objectives with some innovative, low-cost, entry-level Web-based technologies.

"The sun rises and sets on faster time to market, figuratively and literally," says Jeff Simon, president and chief operating officer of Immersive Design (www.immdesign.com), a provider of 3D desktop product communication solutions for enterprises. "In turn, faster time to market is putting pressure on companies to exchange product information quickly, accurately, and seamlessly. It can be a daunting challenge.

"Today's globalized model of CAD hinges on the ability of both design and manufacturing partners and suppliers to access highly sensitive design and manufacturing data whenever they want it and wherever they need it," he adds.

But there's a problem: Many people in today's supply chain are not engineers. Not everyone needing information is comfortable reading 2D engineering drawings, and not everyone speaks perfect English. "Suppose you're trying to teach production line workers in China to assemble a complex mechanical device, and your only instructions are in English. Which is preferable: taking weeks to obtain and proof a translation, or taking only a few hours to create an exploded view which depicts step-by-step assembly visually?" asks Simon. In essence, that's what Immersive Design's Interactive Product Animator does: It provides assembly communications to manufacturing partners, enabling easier collaboration.

Lockheed-Martin: Trillions In The Balance
Sometimes the stakes are enormous. Aerospace manufacturer Lockheed-Martin, for example, is partnering with both Grumman-Northrop and BAE Systems (formerly British Aerospace) on a contract for the Joint Strike Fighter, which when in production, will be called the F-35. During the life of the project, contracts could be worth in excess of $1 trillion.

Here, timely, accurate, fast communications mean everything. "We're doing everything humanly possible to produce the best product," says Randy Schwemmin, manufacturing engineer in the Advanced Affordability Initiative for Lockheed-Martin Aeronautics Co.

"We are constantly exchanging data securely over the Internet as we research and achieve advances in cutting metal, saving time, reducing complexity, cutting costs, and increasing effectiveness. We share Monte Carlo simulations, we assemble parts electronically to test our designs and improve them, we predict and measure the gaps between assemblies on aircraft, and we innovate and compare the most effective assembly methods with our partners," Schwemmin says. Lockheed also leverages collaborative features of Tecnomatix Technology Ltd.'s (www.tecnomatix.com) eM-TolMate to test designs electronically without building physical prototypes.

Schwemmin is part of an IPT, or integrated product team, whose members are dispersed worldwide. "We are a team in every sense of the word, despite the physical separation," he says. "We can work together to get the required results. We interplay constantly and play off one another. The result is every bit as innovative as if we were in adjacent offices. Our collaboration yields decision drivers and accurately predicts assembly line flows."

Making Design Equal Reality
Companies are looking for something more, something different today, explains Tecnomatix North American Marketing Director Eli Dahan. "Users are not content to define products 'as designed.' Today they want to define them 'as built.' Anyone who has ever cut and assembled metal or other materials knows the difference well," he says.

Instead of single-user systems, CAD users today are opting for collaborative Web-enabled technology. "Sharing information enables users to benefit from synergy," Dahan says. "When collaborators see simulations, design engineers and manufacturing engineers and suppliers can work together to prevent problems and improve manufacturability. Every team member can see precisely the same picture, yet each has a slightly different perspective. The sum of those perspectives alters the project and makes it better."

The project is better in many respects, Dahan continues: Simulating production lines enables collaborators to efficiently place robots, ensure reachability, minimize the number of welds required to meet specs, and avoid collisions.

In aerospace, with high-stakes contracts in play, every tolerance must be as precise as possible. "Multi-continent collaborators must assign tolerances to parts since in manufacturing, the shape of each part is slightly different. Dimensions of manufactured parts must float within a range of tolerances," says Dahan.

He explained how Pratt & Whitney, which supplies engines for many advanced aircraft, uses 3D simulation to predict the viability of its designs and the acceptability of sets of manufacturing tolerances. Because all of the parts must work together when the aircraft is built, secure Web-based collaboration, including overnight downloads of key product information, keeps all contributors up-to-date.

Collaboration Trends: Access, Feedback, Insight, and Simplicity
"When CAD started, many people regarded it simplistically as electronic drawing," Simon notes. "Over the years, data was added to the point where today, animated 3D representations of power tools, such as drills, can do everything but drill real holes in your desk."

The virtual reality inherent in today's information-packed designs facilitates productive collaboration. "It makes outsourcing far easier," says Mark Pierson, vice president of product management at Framework Technologies Corp. (www.frametech.com). "The top-level objective is faster time to market. As product lifecycles shrink, the orientation altogether changes. It is not geometry. It is time."

Collaborators--not only in manufacturing, but in sales, marketing, and public relations--want to see the product before it becomes reality. "The keys are access, feedback, and insight," Pierson says. "Everyone who must make decisions needs access to product information. Feedback can be synchronous or asynchronous, but either way, it's essential to a company's ability to deliver an optimal finished product. And everyone who is in any way responsible for a product's success must know the timing and functionality of every deliverable along the critical path." Frameworks' ActiveProject 2000 enables this type of collaboration because it is a Web-enabled, browser-accessible, secure, access-controlled communications hub for business. Access is usually invited via e-mailed hyperlinks.

"Geographically dispersed teams can't necessarily work on the same object at exactly the same time," Pierson says, "especially if they're on different continents. But that's no excuse for any delay in resolving issues quickly. They can, when necessary, collaborate in real time," he notes, through live communications enabled by an enhanced version of Microsoft NetMeeting. "But e-mail Web access is usually more practical for sharing data. Users can mark up and share revised data at the end of the session. They can design products incrementally and archive information which has been settled upon along the way." ActiveProject provides JPEG images of models, not the models themselves, which speeds Internet file delivery.

Pierson adds that simplicity of presentation is essential for non-technical people. "They need to find their way around this information too," he says. "We give them 'smart in-box technology,' which delivers Web pages showing assembly breakdowns as JPEGs. Industrial designers, marketing people, purchasing people, doctors buying medical instruments, the FDA, lab managers seeking pictures to use for technician training, plastics mold designers, PR people; there is no point in having them cope with complex CAD programs. They need pictures that tell the story, so they can do their jobs."

Collaboration Encourages Supplier Input
Collaboration today exists on two levels, says Dave Shuey, manager of collaborative commerce for Unigraphics Solutions Inc. (www.ugsolutions.com). "Certain tools allow people to view, analyze, and modify designs separately, but at maximum speed--in parallel, but constantly in touch. That's asynchronous collaboration, involving people working on different elements of a single project.

"But when parts are interrelated, synchronous collaboration is key. For example, an automaker redesigns a car door. Will the window mechanism work, or must it be modified? Neither partner can go very far with that door until both know the entire door design will work."

But Shuey adds that input from suppliers is at least as important. "Companies aren't looking to collaborate just to cut costs," he says. "They are looking for the most talented partners they can find, regardless of location. That's what's driving multinational mergers and acquisitions, I think. It's qualitative collaboration--bringing innovators together. The Internet has changed the way companies regard other worldwide sources of technology and innovation. Borders don't matter. Good partners can be anywhere."

Christopher Clapp, vice president of the m2mEport Group at Made2Manage Systems (www.made2manage.com), agrees that collaboration is a good thing, but maintains that smaller businesses should benefit from it as much as larger companies.

"The benefits of collaboration are just as substantial for smaller businesses as they are for big companies," he says, citing a 200-employee Made2Manage customer that makes printed circuit boards (PCBs). With 1,400 customers, the manufacturer is successful, but feeling the pressure of competition as much as companies many times its size.

Through its Web portal, m2mEport.com enables companies such as the PCB manufacturer to collaborate in a secure Web environment for $79 per month per user. "The ability to use a portal and collaborate like or with the 'big guys' lets smaller companies distinguish themselves in project-based collaboration," Clapp says. The site takes both 2D and large 3D drawings and enables animation through Engineering Animation Inc., with whom m2mEport collaborates.

"We see more and more of our customers collaborating on parts that will ultimately fit together," Clapp explains. "We often find users on the site determining electronically whether parts fit together. For smaller companies, our site represents an easier entrée into collaborative product design." He says the m2mEport portal is currently experiencing about 600 unique weekly log-ins. The company is expanding its services to help smaller companies market their capabilities.

Enabling The Right Decisions: Two Views
"Making product design information available to a wider audience enables companies to make the right decisions earlier, which helps time to market," says David Pinski, senior product manager at Primavera Systems Inc. (www.primavera.com). "Strategic decisions are based on information: budget, ROI, resource requirements, what you and competitors are doing and plan to do in the market, and your intellectual assets." If you can assemble a corps of 100 mechanical engineers (MEs) on a team collaborating over the Internet, he notes, "you can take on far greater challenges than if you used only the 40 MEs you have in house."

Once projects are underway, Primavera's software tracks activities, so companies can keep an eye on the pulse of their time-to-market efforts. "Different team elements must know how the entire team is doing relative to production, construction, budget, and deadline performance of all the merging pieces of the puzzle," he says.

To keep up with its global competition, U.S.-based faucet designer and manufacturer Moen Inc. also uses teams from far-flung locations. "From the point at which we introduce something new, we have six to nine months until competition takes our idea and brings it to market. So it's vital that we compress the time we spend designing new products to an absolute minimum," says Product Development Director Todd Loschelder. "We take what marketing wants, expressed in a drawing, and make it real."

Moen sells primarily to distributors and large retailers such as The Home Depot, but it always focuses on end users to determine what the market wants. It uses Parametric Technology Corp.'s (www.ptc.com) ProENGINEER to create designs and derive cutting tools, and uses Frameworks to ensure that it's getting consistent and recordable product information.

"Half the business is making sure you have the right people co-located," Loschelder says, a bit at odds with the way some other managers think. "We believe in taking the best people and putting them into a room and not letting them out until 'the idea' is born." At that point, Moen behaves like other companies, moving into heavy collaborative mode.

"There was a time when we used FedEx or DHL to transport large design files between partners, but we use the Internet now to save time and money. Our teams break apart solid models to define manufacturing and assembly methods to establish toolpaths and the like. But we do outsource many details to outside experts where they are clearly most qualified to handle them," Loschelder notes.

Moen's original designs are still made in clay or foam by expert model makers and are scanned and entered into ProENGINEER parametrically. "Some designs used to take us 15 weeks," he says. "We've cut that down to 10 days, and the designs are better. Once you leverage the benefits of CAD across the extended enterprise, you can make real changes in time to market."

That's one point where agreement seems universal.

© 2000 Putman Media

February 2001 eBusiness
Reap What You Sow from eMarketplace Relationships

© 2001 Putman Media

July 2000--Customer Relationship Manangement
Navigating the Logistics Maze

Until the Web added huge impetus to the global economy in the mid-to-late 1990s, logistics seemed to be simple. Manufacturers put products on trucks, trains, planes, or ships, which were scheduled to arrive at their destination by some stated deadline--or some time close to it.

© 2000 Putman Media

November 1999
Customer-Managed Asset Maintenance

by Jeff Berger

Info you can use:

In the never-ending quest for efficiency and better overall productivity, companies are scrutinizing the extent to which costly machinery can be kept busy and productive, so as to maximize bottom-line productivity. Every manufacturer wants to keep the duration of planned downtime to an absolute minimum and, perhaps more important, completely prevent unplanned downtime.

To accomplish these objectives, companies are turning customer relationship management (CRM) information into data that can be leveraged to predict or plan demands on production equipment. Asset maintenance principles can then be applied to production forecasts to ensure that a manufacturer's equipment will be able to handle forecasted demand—and that when preventative maintenance is required, there's time built into production schedules for it.

CRM systems can also help predict product "stretch." If your company manufactures a product for which demand suddenly and unexpectedly rises, you must know how far you can "stretch" planned production until maintenance becomes essential—assuming you have access in the supply chain to ample raw materials. As every manufacturer knows all too well, stretched too far, equipment may break down, taking down critical production far longer than might otherwise have been the case.

Nominal Configurations

In an ideal enterprise resource planning (ERP) configuration, every element of the internal manufacturing process chain interacts seamlessly with every other element. In such a horizontal approach, knowledge of discrete actions moves in real time to every element of the supply chain. There are no islands; users have a single point of information access for tracking every aspect of the process, even if different companies are collaborating on complex outsourcing. They can track orders, track inventory, gauge the availability and order status of third-party raw materials, know when orders will be manufactured and shipped, when they'll arrive at a customer location, and how much they'll cost. In turn, retailers or distributors can plan promotions which accurately match orders and availability.

Richard Howells, director of industry initiatives at Marcam, Newton, Mass. (now part of Wonderware Corporation, Irvine, Calif.), a supplier of plant operation and maintenance management software principally for process manufacturers, says, "No one solution provides everything, which underscores the importance of having a solution which can take information from the CRM environment, measure it against capacity constraints, downtime schedules, and other information, and yield a plan which takes into account the availability of equipment, materials, and labor, and can tell you when the order can be delivered."

Marcam customer Kraft Foods is meticulous about scheduling preventative maintenance and working around maintenance schedules to fulfill production demands, so it doesn't have to shut down systems unexpectedly to perform reactive maintenance. "Their objective is to squeeze maintenance into hours when it makes the most sense—for example, during some night shifts or even during lunches," Howells notes.

"Customer order management sales and distribution systems generate orders either in the form of forecasts based on historical patterns or trends, or based on actual orders placed and confirmed. ERP systems take into account equipment availability and set patterns of plant operation and existing inventory or raw materials availability.

However, the materials requirements planning (MRP) logic underlying most ERP systems assumes infinite capacity. "So shift scheduling software modules should be used to apply finite capacity constraints to deliver real-world, capacity-based manufacturing planning," Howells says. "That scheduling module then takes into account planned work shifts, planned maintenance downtime, and other factors which are tailored to customer operations."

Planned monthly maintenance, or machine-hours-based maintenance, becomes a template or platform on which the manufacturing schedules are placed.

But there's more to it than that, particularly for food companies. Says Howells: "Unusually hot or cold weather in some parts of the country may increase the demand for outdoor cooking supplies or hot chocolate or soup or rock salt or windshield de-icer or other commodities. Manufacturers that don't yet have orders for those commodities know from historical trends that adjustments are coming, and they can change supply chain requirements and production plans accordingly." Regardless of established plans, there are times when customers demand products, and in those cases, "The customer always comes first, and you have to take the chance."

Committing intelligently to customer demands presupposes the availability of real-time machine performance information which can be used to analyze operating trends and ensure that it's appropriate to keep machines running, Howells notes. "Machines operate within a number of performance parameters. Should they start to deviate from those parameters, operators must know it so they can discriminate between deviations which are normal and those which indicate the machine needs immediate maintenance."

Many maintenance decisions today are made at the management level, but Howells asserts that manufacturing equipment data capture systems are accelerating the trend to push those key decisions to lower echelons. These systems enable operators to make correct, timely maintenance decisions. "Machine reliability is improving, as is the ability of programs like ours to accurately track system calibrations. Operators can often prevent failures by making minor preventative maintenance tweaks while systems continue to produce."

Starting at the Beginning

Before companies can establish CRM relationships and leverage data to plan asset utilization, they must analyze their current situation, develop "what-if" scenarios, and create and deploy an effective solution.

Primeon Inc., of Burlington, Mass., is a systems integration and consulting house which does application re-engineering and IT (information technology) infrastructure management; it both analyzes companies' current situations and recommends ERP solutions.

During the four-year-old company's extensive reengineering of customer installations for Y2K compliance, Primeon found that most of its clients had poor or nonexistent asset inventories.

"That led us to develop an infrastructure management solution," says Steve Karlson, Primeon's director of marketing. "We help companies discover where their assets lie and determine out-of-the-box uses for traditional tools and services for asset management."

Companies establish plans for deploying IT assets to realize the benefits of e-commerce. "IT asset management," Karlson says, "can be the basis for helping to predict the impact of new demands on the existing IT infrastructure. Our clients can use CRM data jointly with asset management information to predict how their IT assets will respond to any increase or decrease in work volume from their customers.

"Before companies can develop a program which enables them to launch into e-commerce, they must know how they already are delivering service. On the IT side of the house, we can't begin to predict how the performance of IT assets will change until we know what that performance is today."

In many cases, Primeon starts with a pilot program in a single group or department. "What clients think they have is often very different from what they actually have," Karlson says. "When you move onto predicting the impact of future IT strategies, you cannot misstep. Everything hinges on accuracy in every move.

"Every CIO is stepping back, looking at IT assets and looking at how their company can build an IT infrastructure that will support e-business. To succeed or continue to succeed going forward, every business will have to be an e-business to some extent, or what we call an 'e-structure.'"

End-to-End

Jay Taylor, executive director of professional services for ERP provider Macola Software, Marion, Ohio, says, "Current asset inventory occurs right at the point of sale. For example, a rep for a paper manufacturer sitting in the office of a buyer from a mass merchandiser can link to the manufacturer's network from his palmtop or his laptop, and gauge whether the availability of raw materials, capacity, and machinery are sufficient to take the order. Quickly, the customer will know if the order can be taken at all, and if so, when it will be delivered, where, and at what cost." The result is that reactivity has been replaced by proactivity: If a certain delivery date isn't available, sales reps can suggest an alternate which already has confirmed availability.

The same approach works in many industries, even heavy, long-lead time business like aircraft companies. One Macola customer builds commercial jet engines. If a leading aircraft manufacturer gets an airline order or a tentative order for "X" airplanes, the engine maker must be able to measure parts availability, machine availability, and other factors to enable a fast response to the airplane builder concerning engine availability, delivery date, and cost. "It allows companies to blow down to machine level," Taylor says, "and to the preventative maintenance level, which they haven't been able to do in the past."

Taylor is a great believer in virtual offices. "If a manufacturer's sales force doesn't carry a laptop to the customer and isn't able to get into the system to determine asset availability, that manufacturer is really at a disadvantage. It's very impressive, very customer-service focused, to open your laptop at a client or prospect site and say, 'Yes, we can take this $X-million order, and let me show you how we're going to do it for you, and when we'll be able to deliver it.' I don't know of too many industries today where sales people aren't carrying palmtops or laptops. Reaction time is critical. You can do a lot of 'what-ifs' to get orders delivered and still ensure that your required maintenance parameters are adhered to, and maintenance is performed on a timely basis."

"Enterprise asset management (EAM) enables companies to maintain a very high degree of equipment availability in the most effective manner possible—that is, the equipment is capable of executing the right work at the right time," says David Griffiths, vice president product management, for Datastream, Greenville, S.C. "This often requires companies to have SPC (statistical process control) applied to that equipment in terms of operational life, to have PM (preventative maintenance) running on that equipment, and to coordinate those with your overall production schedule.

"CRM software loads the shop floor. Equipment condition monitoring devices feed data to the EAM software, which yields maintenance plans based on a number of criteria, including when belts and pulleys need to be replaced, for example. Because CRM data is integrated into the process, you can effectively schedule maintenance with relation to your real production schedule. You can also use the CRM data to know when to replenish raw materials, components, and supplies."

Griffiths advocates "balanced scorecard" or "manager's cockpit" monitoring, which enable managers to detect excessive breakdowns or other anomalies and determine whether they need additional condition monitoring. "Performance indicators can alert you when your equipment exceeds certain thresholds, which lets you prevent problems. Obviously that's a key to maintaining uptime and productivity."

Says Griffiths: "More and more, machines are talking directly to software, as opposed to people wandering around collecting measurements and other system operational information. The software triggers shop floor control systems by Honeywell or ABB, and that creates an action. There are no more islands … everything is integrated."

Pervasiveness

Rolf Peter Westhues, a program director with SAP AG in Walldorf, Germany, is responsible for SAP's maintenance development and systems development for quality management, service management, maintenance systems, and CRM services. "This collaboration," he says, "is about seamlessly integrating information from the CRM world to the ERP world." He uses the example of specifying an order for a car on the Internet. "What the customer orders is very important to the customer, whether it's the proper color or the engine size or the options or accessories. It's equally important to ERP, where demands on capacities and resources must be resolved."

Customer orders, ERP, and asset maintenance forecasting all tie together to ensure that customers are satisfied, while at the same time guaranteeing that shop floor equipment receives needed maintenance, Westhues notes: "The functionality really goes hand-in-hand."

Sidebar:

you know it's time to change when … 15 reasons to migrate

1. You're trying to make decisions and can't get the information you need, no matter how hard you try.

2. Your organization is so disconnected that one department has no idea what others are doing and has no easy way to find out.

3. Your staff is growing older. "Legacy core experts are not immortal," says Jim Holstein of Rao Consulting in Chicago. "If they are nearing retirement, the time might be right to introduce a new system."

4. Your legacy programs need constant updates, and IT is spending more time on maintaining existing functionality than on improving future functionality.

5. Your data is so unreliable that you distrust the figures you are given.

6. Your staff is duplicating work. If the same form has to be re-keyed five times in order to distribute the data, it's time for a change.

7. You discover that the 'slight' change mandated by OSHA or accounting will require huge alterations to the legacy database.

8. It takes longer to generate a report than it does to walk around the plant and gather the data.

9. You're missing vital information. "If you can't track cost and profitability, it's probably time to put in a new financial application," says Roddy Martin of AMR Research.

10. Your department heads are always complaining about the IT backlog.

11. Your old system can no longer meet the general ledger needs of the company.

12. Your IT department panics at the thought of a merger.

13. Your shop floor staff still hates the system several years after the installation.

14. Your people don't trust the system. If "shop supervisors and clerks keep a stash of critical parts in their desks because they can't trust the computer inventory," it's time for a change, says Holstein.

15. You will spend more to bring the legacy system up to requirements than to purchase a whole new system.