December 20, 2000, 4:05 PM — WHAT WITH ALL the headlines -- E-this, @-that, cyber-whatever -- it's easy to forget that somebody, somewhere, still has to make stuff.
Manufacturing, though, is alive and well, stock market multiples notwithstanding. But it is also harder than ever to do. In addition to the constant pressure for maximum efficiency in their plant operations, manufacturers face growing demands to hit web velocity in their responsiveness to customers. Take the concept of "available to promise" (ATP). ATP information is at the heart of e-business: A customer needs 400,000 widgets, and she needs them by Wednesday. She doesn't want promises from your sales rep; she simply wants to log on to your website to see if you can deliver. Can she find the answer? "In the old days, available to promise meant your customer service rep looked into the warehouse, and if the product was there, he allocated the order and printed a pick slip. Now, the product may [be available to promise but may] not be in the warehouse; it may not even be on the shop floor yet -- you're trying to model whether you can do it on time. It's much more complicated," says Jim Forquer, a director at management consultancy Pittiglio Rabin Todd & McGrath.
The only way to build those models and answer the customer's inquiry is to have lots and lots of information available about what's happening on the shop floor. Are the lathes, bar-code scanners and conveyor belts running? Or is line two waiting for a replacement part that won't arrive until Tuesday? You might think your enterprise resource planning (ERP) system would know, but -- surprise -- it doesn't. Increasingly CIOs are being called on to build bridges from the factory to the corporate enterprise systems that employees and customers go to for information.
Tread lightly, though. Building those bridges -- as always -- is more complicated than throwing a piece of software into the breach and calling on all the manufacturing facilities to standardize. Manufacturing has been honed for a century; software has been honed for only a couple of decades. "The manufacturing people have gone to incredible lengths to make their operations very lean," says Bill Swanton, vice president and director of the manufacturing strategies group at AMR Research in Boston. "Very few of the software packages really support that [efficient operation]. You can break your manufacturing process and set it back 30 years" by ramrodding your manufacturing operations onto the wrong software standards, he says. CIOs must work closely with factory leaders and make sure the business is driving the software decisions, and not vice versa.