By Gregory Quinn
Manager of Business Development, IIS Raytheon - HRB Systems

I was asked this question shortly before my company, HRB Systems, submitted a proposal to a Pittsburgh company for additional work revolving around a joint venture in glass manufacturing. The question pointed to the success we have had in diversifying the company from its traditional defense-only base to its current defense and commercial business base. This journey began almost five years ago and APICS has played a significant role in our successful diversification.

HRB Systems, a wholly owned subsidiary of Raytheon, is a 50-year-old information processing company with connections to almost all parts of the defense establishment. As the Cold War wound down, we were faced with the problems of a declining defense market. While our market segment, arguably, declined more slowly than other segments, the only good news was that we had a little more time to plan for the build-down.

Enter APICS, in particular the Certified in Production and Inventory Management (CPIM) program. After culling through the overblown language of other organizations, it became clear that APICS was the educational resource that would facilitate our transition from a Department of Defense (DoD), large-project, engineer-to-order mind-set to commercial manufacturing. The need to make the transition is paramount if a company is to grow, as the Rutgers study also found that those defense firms that did not increase "civilian" sales eliminated staff. But those companies that had increased "civilian" sales increased employment at a rate that nearly tracked the 13 percent overall employment growth in the United States. For a systems company such as HRB Systems, retention of staff is a critical issue because it is the skill of the engineers that produces the value-added for our customers.

The return on investment in the CPIM courses was impressive. The immediate result from this new knowledge was our ability to navigate between the familiar complex industries of aerospace and defense and our new customers in the process industries of glass and metals. The benefit for our customers was a manufacturing execution solution assembler who was focused on customer needs and had the people and technology to solve a large variety of problems.

CPIM also gave us the flexibility to successfully serve other areas. For example, our general manager, Dave Woodle, then a vice president, moved HRB Systems toward the transportation industry. Leveraging our systems and wireless communications expertise, he began a marketing and acquisition campaign that vaulted HRB to a leadership role in the transportation management industry.

We had begun the move from a reliance on federal funds to now competing in the more difficult market of state and local funds. The transportation experience served as a catalyst that evolved a more focused approach to new business. We would remain with our traditional DoD customers and continue to expand our transportation business, but what we needed was a private sector market that matched our experience in real-time information systems to balance the business in federal, state and municipal markets.

Woodle then overhauled our company's planning process to reflect the lessons learned from our expansion into transportation. The new process improved the focus and action of the business managers into realizing strategic objectives. The company goal remained focused on selling real-time information systems to a new market, so we needed to find both a technology and marketing niche that was compatible with our goal. The 1996 Strategic Assessment by the National Defense University forecasted a demand that fit our capabilities: the steady growth in manufacturing coupled with the rise in information technology. Clearly, there was a need for cost-effective, easily maintained manufacturing information technology (IT) systems, not a bunch of guys with clipboards wandering around the factory floor.

During this period, a small group of engineers had begun to make inroads into manufacturing IT, in both systems and proprietary software. In time, this group would become the core of the Industrial Information Systems group. It became clear that while we are well-qualified in IT (recently ranked number 182 in PC Week's top 500 innovative IT companies), we were having trouble crossing the bridge from DoD-style manufacturing to the commercial realm. CPIM got us across that bridge quickly.

The engineers who were involved in the early stages of the IIS group were all systems and hardware engineers familiar with material requirements planning and discrete electronics manufacturing through years of work with the government. The need was to convert that knowledge into a broader context so we could deliver manufacturing execution systems to regional industries.

We began educating the staff using all the resources available from APICS: taking CPIM courses in Pittsburgh, purchasing most of the source material for the CPIM and self-study courses, and attending SIG technical conferences and other regional and national conferences co-sponsored by APICS. Several of the senior staff are now working to achieve CPIM. We then put the senior software engineers through the same regimen, and the merging of our technology with the needs of manufacturing accelerated beyond our expectations. In less than four months we developed one of the few truly enterprisewide client/server models in the country.

With this model we can simulate the customer's operations, and then develop and stage solutions at our facility, demonstrating the benefits produced by our systems without affecting operations at the manufacturer's site. In addition, we now have the development environment to push the limits of object and telecommunications technology for use on the shop floor.

CPIM also was helpful in another area. We found that we were cost-competitive to the extent that we could service the middle- and small-sized manufacturers who had been underserved by the manufacturing execution systems vendor community. Our software and systems engineers have become very flexible in addressing different vertical industries by applying their general CPIM knowledge. Consequently, the possibilities for HRB Systems have become nearly unlimited.

The aftermath of the defense build-down has left three major defense contractors, down from the 10 major contractors during the Cold War. Along the way, a number of smaller companies have either been acquired by the majors or are no longer in business. For the survivors, the goal is to stay in business and prosper. In a time of flat DoD budgets, growth must come from either increasing market share or diversification. If a company chooses diversification, education may be the single most important factor to success. Investment in education is an investment in employees — the real strength of a company.

Like pioneers heading west, combining the sense of purpose with the right body of knowledge will take you across the great divide into a future of unlimited possibilities.

Copyright © 2020 by APICS — The Educational Society for Resource Management. All rights reserved.

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