May 1996 € Volume 6 € Number 5

Resource Management:
Tools for the 21st Century --
A roundtable discussion



By Gregory A. Farley, Editor



For the second of two focus groups conducted at the APICS International Conference last October, APICS -- The Performance Advantage invited six resource management software professionals to gather and discuss the future of information systems. The conversation focused largely on how trends in software development and trends in resource management overlap, and how, in some cases, they do not.

The participants were Julie Fraser, Berclain; Monte Zweben, Red Pepper Software; Dick Brown, JD Edwards; Himanshu Kumar, Deloitte & Touche; Gary Landis, Gary Landis Associates; and Ben Schlussel, BMS Associates. The discussion was moderated by Steven Melnyk.


This focus group addressed the following specific questions:
Defining the terms
Before the discussion even commenced, Gary Landis suggested it might be useful to define some of the key terms that would undoubtedly crop up in conversation. At the top of his list was "supply chain management."

"The supply chain management concept," suggested Monte Zweben, "represents a move toward the next generation of operations management, where rather than optimally managing one element of your enterprise, you are essentially integrating all the elements -- distribution, manufacturing, inventory control -- and optimizing the entire enterprise.

"Moreover," he continued, "we can not only manage manufacturing and distribution as one entity, but we can even control multiple divisions of an enterprise, where one plant is supplying another. It can even extend outside the enterprise to include very close business partners. Your company will be able to look at its suppliers' inventories and capacities, and you'll be able to control its production schedule to meet your demands. In the future, it won't be companies that compete -- it will be supply chains that compete."

"One thing that manufacturing, through technology, has been good at is managing expectations within an enterprise," added Himanshu Kumar. "But now we have to grow beyond that. This is critical to making advances in manufacturing management work. One big deterrent to translating Just-in-Time into a totally effective tool is the failure to manage customer expectations on the one hand, and supplier expectations on the other."

"In that light," said Julie Fraser, "we are seeing movement in that direction among those who provide the enabling technologies. As a group, software vendors are learning to partner with each other and investigate new ways of sharing information and conducting business.

"To have a supply chain strategy that works," Fraser continued, "businesses have to think globally and act locally. Unfortunately, both from a management standpoint and a systems standpoint, the system used to manage toward a global optimum is not the same system used to manage the local optima. But we're all moving in that direction."


Too much technology?
"How do you know if a technology is obsolete?" asked moderator Steve Melnyk.

His answer? "It's available."

The rate at which technology advances can be problematic for those selling, specifying and implementing resource management software tools. "It's a serious management issue," said Dick Brown. "Software vendors are far outstripping the capabilities of management. We provide solutions for which the resource manager sometimes has no known use."

Ben Schlussel said that managing within (or despite) an environment where the rate of change is breathtaking is the critical challenge for resource management professionals. "The change comes so rapidly that managers can't grab on. By the time they've become familiar with a technology, the next level is already here and they're a step behind."

Landis, looking a few years into the future, wondered how manufacturers will manage to forecast demand in a Toffler-esque world where 250 million prospective customers all provide input to a system through their home television/computer setup. "It's difficult enough now to come up with a good forecast," he said. "A quarter billion potential inputs to a forecast will introduce a degree of complexity we haven't begun to imagine."


No head starts
Mastery of manufacturing information systems alone is no guarantee of success. Despite the resources required to select, purchase and implement a system, that effort only puts competitive companies on an even footing. "How does information technology provide a competitive advantage?" asked Kumar. "What is strategic about these systems? How does a company go about achieving a sustainable competitive advantage by using this system?"

"You have to have it to be in the game," said Schlussel. "How well you use it can make you a winner."

"Sometimes you have to reengineer before you can use a tool to gain a competitive advantage," said Zweben. "Enterprises are inherently distributed. There are little pockets of power all over the place filled with people making decisions that affect other people down the supply chain. And these people don't talk to each other and they don't have access to each other's data. If you put technology in place that enables them to see each other and share data, and allows them to make decisions that affect each other in an informed way, then you have to empower them to work together and provide the incentive that encourages them to do so."

Melnyk noted that much of the discussion of information systems had focused solely on managing capacities. "How good are we," he asked, "at managing capabilities?" How do systems relate to a company's core competencies?

"You need to manage capabilities -- the business rules specific to what a company considers its core competencies-as well as capacity. You certainly need to have within your toolset a mechanism that allows you to look at the business issues as an underlying foundation for how you make decisions. Many software vendors have focused on capacities, but more and more specific business rules are being built in. That's the difference between data management capabilities and decision support capabilities."


The human factor
"The enabler for competitive companies is software, but the real secret is the people behind the software and the practices they put in place," said Zweben.

So, to meet the demand for these types of workers, what management skills should the educational process instill in managers?

Zweben noted that the want ads in his local newspaper, the San Jose Mercury News, includes numerous ads placed by Silicon Valley manufacturing concerns seeking planners and schedulers. Among the requirements generally listed are analytical skills, modeling skills, and reasoning skills. "These are technologically oriented manufacturers," he explained, "usually considered visionary in the types of information systems they deploy. These new requirements for analytically oriented workers are a harbinger of what's coming."

"So," Melnyk asked, "what skillsets should candidates for these positions possess?"

"It's not a skillset," answered Schlussel. "It's an attitude."

Brown concurred. "Knowing how to use an executive information system is a skillset. Understanding that knowledge of executive information systems can make me a better business person, which can improve the competitive posture of my company, is an attitude."

Because the technology available to industry changes so rapidly, it is important that businesses identify, hire and nurture managers with a "gung ho" attitude toward technology. "You cannot earn certification in modern technology, such as the Internet or Microsoft Office," Brown continued. "So you gain the knowledge in how to use those technology tools because they give you and your company a competitive advantage. Your company has to possess that mindset that says 'We're ready to go out and acquire that new technology.'"

Is the manufacturing sector, in general terms, slow to capitalize on technological innovation? According to Zweben, that perception is regarded as fact in venture capital circles. "The investment community is far more interested in companies with nice CAD systems than in companies with manufacturing planning systems. They contend that the manufacturing community is very conservative, that they have no interest in technology. That's not true among engineering-oriented companies. Engineers are trained to think about the future and to be visionary."


When does it get easier?
So if software capabilities have exceeded management wherewithal and the rate of change has left many resource managers sitting and scratching their heads, what's next? Well, things may indeed get easier, thanks in part to object-oriented technology -- a new way of writing software.

"Objects represent a real-world 'thing' that people can relate to," said Fraser. "Certainly it's true in some cases that systems have exceeded management capability, but object orientation brings the promise that systems will return to a realm within which they can be handled and managed by most manufacturers."

Zweben characterized objects as analogous to a child's Lego building blocks. Each is a whole unto itself. An object is a piece of programming code that can transport data, and the behavior of the data, to subsequent blocks within which it can be incorporated.

Objects can be written that can extract data from legacy systems. This enables companies that may be reluctant to adopt a new technology an upgrade path that protects them from throwing the baby out with the bath water. Companies using their legacy systems with new object-oriented systems are likely to see the folly in adhering to long-obsolete equipment and the business processes that go along with it.

"There is no doubt that every competitive company is going to change radically over the coming years," said Zweben. "And because change is inevitable, the software had better not be an impediment to change. Software systems that aid business in a flexible marketplace have to be flexible as well.


Everybody else is doing it
"New information systems and the changing competitive climate are changing the roles traditional production and inventory control personnel fill in their daily jobs," said Fraser. "Because the data end of the operation is going to be handled more easily by the computer systems, their responsibilities are expanding to include issues such as 'What is best practice?' and 'How do I make the right decisions?'

"The Internet provides an important forum for people to exchanges ideas, to trade answers to common questions, and to unique questions, as well. It's an always up-to-date source for information on how to proceed in a world that never stops changing."

Zweben sees much promise in the Internet for savvy companies, too. "There is a role for the Internet in decision-making systems, for sharing information within enterprises and across enterprise boundaries."

But Brown contends that the Internet will never replace or supersede electronic data interchange. "It's a tried-and-true technology with standards already defined to govern the exchange of data between organizations."
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