Posted by Randy Flamm on Wed, Sep 01, 2010 @ 07:50 PM
Single Database – Single Source ERP for Manufacturing
A Little History - Lessons Learned
From the beginning of my career in manufacturing I saw the need for a comprehensive system to control the whole process from start to finish. It was clear to me that a single database was the way to go. One version of the truth was very illusive when it came to manufacturing information - how to make a product or even how many to make and when. There were many places to look for answers and sometimes none of them were correct.
Microcomputers were just coming out and I was really interested in them. My friend Dewayne Clinton and I attended the Home Brew Computer Club meetings held in an auditorium at the Stanford Linear Accelerator Center. I thought it would really be cool to create such a system using a microcomputer.
I started programming around 1982 on 8 bit machines using CPM/dBase II while working at a custom manufacturing company in the San Francisco Bay Area. I was a production foreman and my future wife worked in the office. We had to take orders, purchase raw materials, and manually schedule the shop resources including machines and labor. Our boss was very demanding when it came to production performance and reporting. He insisted on have a detailed production report including profit contribution on a daily basis. Performing these tasks manually was very time consuming and prone to error since everything could change overnight. The manufacturing control system I developed was infinitely more capable and user friendly than their current IBM System 36 RPG punch card-input based system in use at the time. This is when I developed many of the same demand-driven concepts in use today in the EnterpriseIQ ERP products.
With the new system all we had to do was make sure the sales orders were entered and the finished goods/raw material perpetual inventory was kept up by doing all packing slips and receivers from the software. We would start the MRP engine (we called it IRV) and go to lunch. When we returned the output told us the parts to run and the materials to order. Time-phased calculations that had taken two or three days were completed in an hour. Ok, sometimes we took an hour and a half for lunch but we got more done with much better accuracy than any other time in the history of that company.
In 1986 I went to work for GE Plastics as a tech service rep based in the LA area. With this job I didn't need to worry about scheduling production or dealing with employees. Through that job I met many owners and managers of manufacturing companies who were struggling with the same problems my wife and I able to handle via computers and software when we worked in the Bay Area. I would mention (brag about) this at customer dinners and lunches. Soon I got called on it by a husband and wife who owned a custom injection molding company in the LA area. The conversation went like this: "Wow! That system sounds great. Why don't you write the same thing for me?" I responded that I couldn't possibly because it was a lot of work and I really liked my job at GE. After a few more conversations I let them know that I would write a system which would do the basics including a MRP engine, with the understanding that I would sell the same system to other companies as it was developed. I started programming in August of 1988 on nights and weekends.
Back then DOS was the operating system of choice. Hardware was cheap and local area networks were making their debut. The Clipper programming language offered a familiar dBase syntax and .dbf file storage system. CPU clock speeds and storage capability were increasing all the time so I figured that if I wrote a comprehensive system, the hardware would come.
In 1989 my wife and I quit our jobs, mortgaged the house and started IQMS (then known as IQ Management Systems). My objective was to develop an all encompassing manufacturing software system (long before the term ERP was coined). I envisioned a software system which provided the tools and automation necessary to enable the smartest manufacturing operations possible.
We found ourselves with over 100 customer installations by 1996. By then, I was no longer programming but took on the architecture and design of the manufacturing modules of our product named IQ/Genesis. We had complete Accounting, Inventory, MRP, Finite Scheduling, RealTime Machine Monitoring, Preventative Maintenance, Payroll and Time and Attendance modules. File based data storage systems are inherently weak when run in a multi-user network environment. "Re-indexing" data files became a way of life when the network wasn't stable. It was always hard to explain to your customer that the problem was their hardware - not your product. In spite of the weak foundation the product was a hit with our customers - most of which we still have today. Service had a lot to do with our customer retention (as it does today). Coming up with software solutions to customer problems is one of the reasons the product had so much depth. Software updates came fast and furious and were always at no extra cost.
At this time it was evident that DOS was dead. We were starting to get hammered in the market place by systems with far less functionality that were Windows-based. Going to a demo with a DOS based system was like going to a gun fight with a knife. IQMS as a company had to decide if we were going to continue to grow or just survive on loyal customer maintenance contracts until they went away. It would have been a slow death to my vision of the single-source/single-database all-encompassing manufacturing software system.
It was decided that we would "burn the ships" and go forward. We made the decision to abandon the millions of lines of IQ/Genesis code. We threw everything away except the concepts developed and the lessons learned over the prior 7 to 8 years. It was time to pull out the stops and come up with a bullet proof foundation to build the next generation of IQMS ERP products.....
(I’ll continue the story of how IQMS got where it is today in my next blog.)
Posted by Glenn Nowak on Thu, Aug 12, 2010 @ 12:23 PM
In times of economic uncertainty, everyone naturally looks for ways to save money and cut costs. As some annual manufacturing ERP system maintenance programs come up for renewal one might question the validity of expense. What happens when you don't continue to pay maintenance? For most ERP users, be prepared to be shut-off from technical support as well as any current or future software upgrades. In some cases, continuing to operate without technical support is not reason enough to justify the cost. So that leaves the upgrades as the main driver for continuing to pay your maintenance fees. So, are ERP software updates a big enough reason for paying maintenance? It all depends on your system!
Let's look at what happens if you don't renew. If you are, as noted above, on a relatively new or "stable" version of the manufacturing ERP software, and you don't have a very active marketplace that changes dynamically, then you might feel pretty comfortable hopping off the maintenance train. Your thought is that you will just maintain yourself with your current system and its current capabilities. You might even get your ERP provider to discount maintenance if you don't take upgrades. This may be fine for the time being but what if one of the dynamics of your world changes - like new customer growth with different demands, business upgrades that require new technology, obsolete hardware and operating systems, or new business expansion opportunities offshore.
The most significant of these is the changing dynamic of your customer base. Because, in today's ever changing business world, even keeping your existing customers requires you to change and adapt to their needs - regardless of whether they have been with you 20 years or 20 minutes. How will you keep up year-after-year when your core technology infrastructure does not keep pace? How will you implement new technologies when they don't mesh with your existing outdated systems? The answer is that you will eventually fall farther and farther behind the curve against your competitors - who are keeping current with their technology - and this will then require you to eventually take one of two actions: start from scratch with a brand new ERP system or upgrade your existing system (and depending on how far behind you are it may seem like a new system anyway!). Either option is likely to be more costly than having continued on maintenance in the first place.
But its not just all about getting updates. It's about the quality of the updates. You need to look at this closely and see whether your manufacturing ERP software company is providing you a consistent path of development. With the consolidation of ERP systems in recent years many packages are being developed to fit certain niches within a company's product offerings and not necessarily the original direction of the ERP system. Ask yourself whether the updates that are being provided fit the direction that your business is going and whether your ERP provider allows you input on the development for the update? You should ask yourself these questions when you think about shelling out the maintenance fees because it is important that your ERP system evenly grow with both the industry and the technology.
So once you have bitten the bullet and decided that maintenance is worth the money (and to be worth the money it must include frequent and useful updates!), how do you ensure that you get value for your maintenance dollars? You can bargain with your ERP provider for a lower maintenance rate as an option. But that will likely lead to cost cutting on the ERP provider side and a reduction in services and update quality. The answer is to find a manufacturing ERP provider with a reasonable maintenance rate where the updates are frequent, useful and relevant to your business needs. Those manufacturing ERP software packages are out there and I would be happy to offer my top choice!
Posted by Glenn Nowak on Fri, Jun 18, 2010 @ 11:45 AM
Most companies today are looking for an industry specific ERP system that handles their requirements and meets more than just the basic ERP needs like inventory control, financial management, and sales and distribution. Many companies today want Quality, SPC, CRM, MES, Maintenance, Bar Code Scanning, EDI and more and realize the value of all of these components residing in one, nice package.
The ERP system vetting process used in most cases entails sending out long generic vendor questionnaires, selecting a few suppliers for short presentations, and scheduling day long, scripted demos. At the end of the day all the systems begin to look the same. Not only that, but often the software sales people were convincing in the illusion that any system can handle all the customer's unique needs and any required third party interface to a another system would be invisible and seamless. So how has the research process changed and most importantly how do you make the right decision?
The first step in the process is to look at other companies in your industry. Ask colleagues, trade organizations, social network sites, and yes, even competitors. Find out what systems they are using. Ask them how they truly like the system. Does it handle the specific process or industry needs? How easy is it to use? How long did it take to implement? What is the software support like? How are software changes handled? Go back to that 5 year-old in us all and ask every question you can think of and then really listen to the answers.
The next step is to bring in some selected companies for a day of discovery and plant tour at your facility. This allows ERP vendors to see your unique needs. Show them your pain points and your detailed requirements. Let them ask questions on your processes and what is driving your search for an ERP system - whether it is your first one or your last one. Make the suppliers fully aware of the specific topics they need to cover and gauge their confidence. Be as specific as possible and ask for the same in return - don't be generic where specificity is best.
The detailed demos are the next step in the process. To best determine whether the vendor can meet your needs and requirements you should consider providing the vendor, in advance, with some of your data for utilization during this demo stage. Have the supplier present your data and show in detail how they would handle your process, needs, and issues. If they have multiple systems that are required to be linked or interfaced together have them not only indicate those disparate systems but also walk you through the connectivity process and data sharing process. Is it easy or cumbersome? Is there a batch transfer or real-time data? These factors will be extremely important when utilizing the system.
Once the top suppliers are selected it often comes down to evaluating the price. Some systems may seem less expensive on paper but they are often less expensive for a reason that you will pay for later. Make sure you are looking at all the hidden costs and comparing apples to apples not apples to oranges. This often works best by putting all the details side by side in a spreadsheet to make sure you aren't missing anything. One system might be less but support isn't included. No one thinks they will need support, but inevitably everyone does. Scalability might not be a factor now but what about in 3 -5 years? The cost for having to buy another system is significantly more than that of being able to enhance the system you already bought. By reviewing all these details as well as pros and cons, you can get the value of the system and not just the price.
So if you are at the beginning stages of an ERP selection, I encourage you to follow these steps in helping guide your search. Being thorough, objective, and detailed will yield great results. Because when you look at all the details is when you are most likely to know which is the best and most cost effective solution.