Dustin S. Klein
Want to improve your manufacturing processes without bringing in high-priced consultants to tell you how to change everything? WINOC-the Work in Northeast Ohio Council-offers four hands-on programs designed to help manufacturers modify their processes. All it takes is three daylong sessions.
The programs include direct participation in the manufacturing process-in the areas of quick setup, error-proofing techniques, total productive equipment and visual factory methods.
Sessions are divided into three parts: The first explains the tools and techniques needed for each process; the second involves visiting a host site for hands-on learning; the third is a forum for discussion and review on how that direct participation can be applied to each individual manufacturer's home shop.
For more information on WINOC's programs, call (216) 520-0770.
Think you're safe? Think again.
According to Mo Osman, executive vice president of Cleveland-based Mega Solutions Inc., most businesses don't even know they might be facilitating their own disaster. Here are a few things you can do to help prevent a crisis.
As your network grows, there's a tendency to give it continuous face lifts. That means new parts-often from different manufacturers-and often several pieces at a time. But if there's a problem, how do you know what's caused it? Osman suggests installing new hardware in phases, so that if the system crashes, the problem is more easily traced and corrected.
Software installation without testing
Installing new software packages often leads to problems. Waiting until the software is up and running on the network isn't the place to work out the bugs, says Osman. Destroying the network this way can be easily avoided. Try installing the software on an isolated workstation and testing its functionality first, he suggests.
No virus protection software
"It used to be that your office stopped where the walls stopped," says Osman. "But now there's this gray area because of modems and Internet connectivity. That type of interaction with the network introduces viruses."
Businesses that do research on the Net or whose employees have remote access to the network should install virus-protection software to ensure nothing harmful is introduced into the network.
Shoddy electrical wiring
Have you ever seen some of the rooms where IS directors store the network computers? Those tangled wires, cords and underpowered sockets are crashes waiting to happen, says Osman. Avoid this problem by enclosing the cords, tying up the wires and plugging them into adequately powered sockets.
No separate power supply
"If your lifeblood is hooked into a power supply on the same line as the rest of your office, if any weather issues occur, the system will be blown out of the water," warns Osman. Try an uninterruptible power supply instead. That will ensure if the lights go out, the network won't follow.
Unfiltered access to the network
As your office pushes outward into cyberspace, a gate of unaccountability opens. Do you know who is accessing your network from the outside? How much information can they get their cyberhands on? Osman says if you can't answer those questions, then you need a firewall or other protection to keep your files private.
How to reach: Mega Solutions Inc (216) 781-1551.
Did you know your company doesn't own the software you purchase, but just licenses it for use? Do you know the difference between single-user and multiuser licenses? Improper use of software by a company's employees can lead to hefty fines-even if no harm was intended.
With software, it's what you don't know that can hurt your business.
Here are some of the most common software-related mistakes companies make:
Ignorance of copyright laws
"Most people think of software piracy as pirated copies sold at flea markets or on the Internet," says Jung Pyun, communications manager of the Business Software Alliance based in Washington, D.C. "In reality, the most pervasive form of piracy is the relatively pedestrian practice of copying software in the workplace."
Failure to regularly check software needs
Software manufacturers are continuously updating their products. Install the new versions on every computer that runs the programs-licensed of course. If you don't, employees running version 3.0 will not be able to open files written in version 4.0. To avoid this, Pyun suggests scheduling times each year to audit each computer.
Poor documentation of purchases
If you don't know what you have-or how many computers it's supposed to be installed on-it's impossible to be in compliance with your software licenses. Appoint a software manager, says Pyun, and have the person coordinate needs and purchases. Then, after installing software, in line with the licenses, document what was bought and who's using it.
Failure to register software with manufacturers
All software purchases should be registered with the manufacturer, says Pyun. Nearly all manufacturers have technical-assistance hotlines. If employees need help, the software must be registered-or your employees are on their own.
Failure to prevent installation of unchecked software
Does your company have a policy against downloading software from the Internet? What about receiving files attached to e-mail?
Companies that don't take the proper precautions or don't have written rules against letting employees introduce software on their own may be inviting disaster-in the form of computer viruses.
Pyun says while there's no panacea to solving all your software problems. If you're careful to document every program your company runs, that effort will go a long way toward saving you headaches later.
How to reach: Business Software Alliance (202) 530-5136
One list is external-tasks to be completed and materials to be brought to the machine before it can be shut down. The other list is internal-procedures that must be done to restart the machine.
While the machine operator executes the tasks on the internal list, a helper completes a second list of internal jobs. When both finish, the machine is turned on and the next production batch begins.
- Process sheet envelope
- Die and screen
- Labels and staple gun
- Skids and packaging
- 10-to-1 drawing
- 10-to-1 comparator works
- Template and tools
- Opening die and air die
- Set zones
- Die placement
- Feed stock
- Heat die
- Sizing conveyor speed
- Change/review cutter
- Change length on cutter
- Set puller speed
- Put in opening die and air die
- Weight scale
- 12-inch cut fixture
But what if there's a major disaster-a flood or tornado-that wipes out not just your power, but the office itself, including the backup tapes and Zip disks? What then?
Insurance may replace the computers, desks and filing cabinets, but it can't re-create your client lists and business files. That information would be gone forever.
There is, however, another way to back up information-off-site.
Remote backup adds one more level of protection to your invaluable business information, says Graeme Patey, owner of Back-Up Data Inc.
"It's similar to conventional backups, except that you transfer the information over the phone lines into a backup server where it's stored in a safe, off-site location," says Patey. "Then, when you want to retrieve it, you can call the off-site storage server and retrieve the information 24 hours a day, seven days a week."
How to reach: Back-Up Data Inc. (440) 895-8050
When a local dairy distributor started imposing service charges on customers placing small orders in early 1997, the phones at Mitch Kroll's Weisberg Meats began ringing. They wanted to know if the Solon meat distributor could provide the dairy products they needed.
Kroll, who bought Weisberg in 1996, turned those queries into an opportunity. He shed the company's 40-year-old image as solely a meat distributor, without losing his focus on serving his base clientele or having to inject large sums of money into the business.
With a few quick phone calls, Kroll lined up a supplier. Within a week, Weisberg Meats was in the dairy business. A week after that, Kroll was delivering dairy products, along with regular meat orders, to nearly one-third of his customers.
That opportunistic expansion allowed Kroll to begin a systematic change at Weisberg-one reflecting the company he believed it could become when he left a high profile job at Matrix Essentials to run his own company.
Today, Kroll has expanded his customer base, from 150 to 350 accounts; increased his workforce, from eight to 20 employees; and boosted revenues to nearly $10 million a year. He's also changed the name from Weisberg to The Food Co., to reflect its new focus. But Kroll's plans for growth didn't develop overnight. Like a package of beef which thaws slowly before it becomes dinner, Kroll changed Weisberg gradually-one step at a time.
When Kroll bought Weisberg, he wanted to take a small, established company with a solid customer base to the next level, much in the way he'd watched Matrix grow. He'd spent nine years with the hair care products company-from 1987 to 1996-and worked his way up to become director of operations.
When he joined Matrix, it was a $30 million company with 300 employees. When he left, Matrix had more than 1,000 employees and revenue in excess of $200 million.
"I was tremendously caught up with the entrepreneurial fervor of Arnie and Cidell Miller (who owned Matrix)," says Kroll. "I saw how they took a small company and expanded it."
In 1994, Bristol-Myers bought Matrix from the Millers. Kroll realized he didn't want to work for a large corporation and under "the necessary controls they put in place," so he began looking for a company he could call his own. Two years later he found it. An old family friend, Dave Weisberg, was interested in selling the meat company that his family had founded in 1956.
Immediately after buying it, Kroll thought about ways to enhance the company's image, even though he knew nothing about the food business. Says Kroll, "That was OK. I didn't know anything about the hair care business before I worked at Matrix. The key was that it was an entrepreneurial company marketing to other entrepreneurial companies-restaurants. So I looked at it from that standpoint and said, 'How can I market to these people?'"
His goal was to take current customers who bought meat and offer them different product lines.
"I knew it was a competitive business," he says. "There's nothing really more competitive than the restaurant business."
But he also needed a way to do that without pulling away too many financial and personnel resources from the core business. He decided to move slowly and convince his employees that the moves could work before implementing them.
When the dairy situation arose, Kroll was able to show his employees that the customers would accept Weisberg as more than a meat company.
"That was our first real critical point," he says. "When the market accepted that, we could change. When our customers said, 'Yeah, we'll give you a shot.' It also gave the entire company confidence that we could do this, so we looked to expand into other products."
Less than a month later, in February 1997, Weisberg rolled out fresh produce. In the first week, 20 of the company's 200 customers added produce to their orders. A few weeks later, that number more than tripled. Today, more than 60 percent of The Food Co.'s 350 customers order produce.
"The employees were so excited that they were ready to sell everything our customers needed," says Kroll. "It was like a rocket ship, ready to take off. But I wanted to do it right, and that meant to keep doing it one step at a time and do justice to each line."
But there was still another caveat-Kroll didn't want to tie up money in inventory while he expanded Weisberg's product line. So he sought out suppliers willing to make more frequent deliveries without charging him a higher price. In return, he made a commitment to use their services for the long haul. "They gave us a chance," he says. "That strategy allowed us to devote resources to our infrastructure-adding employees and equipment."
So Kroll sat on meat, dairy and produce for a few months and focused his efforts on marketing those products to his current customers and drumming up new business. He also brought three of his former Matrix co-workers into the fold to help acclimate the Weisberg staff in how to handle major expansion.
Then, in May 1997, Kroll added dry goods-such as canned vegetables and hot sauces-to Weisberg's fare. A month after that, he added frozen foods. Finally, in late summer, Kroll put the last product lines in place-paper goods and chemical products.
"That made us a full-service distributor," he says.
But the changes-while improving the company's bottom line-created a new problem. Neither its name, Weisberg Meats, nor its image-still largely as a meat distributor-reflected the new focus.
So Kroll drew on his Matrix experience, and in early 1998 embarked on a marketing campaign to change the company's name. He also hired designers to create flashy advertising materials which promoted the company's new, expanded line of products and services. Says Kroll, "I had seen the impact of style and image on a company that could provide good products. Restaurants seem to be very creative and image conscious, so we decided to try to relate to them the best we could."
Then in September, Kroll put the final pieces in place. He renamed Weisberg as The Food Co., complete with a '90s-style logo and tagline: "Weisberg meets its future..."
"We wanted to recognize who we are, with a new image," he says. "We're a different company than we were two years ago. But we also wanted to reflect where we've come from and let our customers know that we are still proud of our past."
Even in this slowed-down economy, it's no secret that people are working longer hours than ever before. Overtime, especially in manufacturing facilities, is the norm, not the exception. Solon-based Kennametal Inc. is no different.
But what distinguishes Kennametal from other companies, says human resources manager Ed Boeing, is that Kennametal doesn't make overtime mandatory for its workers, and there is no pressure to work more than 40 hours a week and no penalties for those who don't.
Instead, the company holds meetings year-round to keep everyone informed about the business and its needs. "We've had a nice increase in business, and we're trying to meet our customers demands in a timely way," says Boeing.
To meet those demands, Kennametal runs three shifts a day, Monday through Friday, and sprinkles in the occasional Saturday and Sunday shifts, whenever possible.
Each week, supervisors ask employees if they plan to work overtime so they can gauge whether they'll be running machines over the weekends or extending the eight-hour shifts to 10 hours. "We encourage people to help out when they can," says Boeing. "And the employees have responded nicely."
Which leads back to the old question-which works better, the carrot or the stick? For Kennametal, it's the carrot.
At 36 years old, Clevelander Matt Ghaffari, the reigning Olympic silver medalist in Greco-Roman wrestling, can look back on a spectacular wrestling career. There's been just one insurmountable snag: reigning gold medalist Alexander Karelin.
Their matches tend to be the close and hard-fought battles of titans. But like Sisyphus of Greek mythology-condemned to roll a boulder up a mountain only to watch it roll back down as he neared the summit-Ghaffari has never defeated his rival. The Russian has held off Ghaffari 20 times, most recently pinning him at the World Championships in late August. Ghaffari is already talking about their next meeting.
With that in mind, it's easy to imagine Ghaffari's first rejection by a business prospect early this year didn't slow him down very much. To him, such disappointments are the basis for the next goal, whether it's in wrestling or his fledgling career in financial planning.
"I don't consider anything a failure or a loss," says Ghaffari. "There's nothing bad about losing. If you don't make mistakes, you can't fix them. When I make a mistake in wrestling ... I either took an opponent too lightly or didn't hit a move hard enough.
"In business ... (it) means that after a hard week you have nothing to show to the boss. But with every client I could have closed and didn't, I learned some valuable lesson that will help me close the next one. That's priceless."
Call him the master of positive mental attitude. But if that's all Ghaffari brings to the world of business, he figures he's already ahead of most competitors.
In fact, he's bringing other disciplines that translate easily from the gym to his role as an associate at Cleveland-based Brennan Financial Group, and a registered representative of New England Financial.
What can you learn from a guy who's been in business for only the better part of a year?
Eighteen years competing against the world's best wrestlers ought to be good for something; Ghaffari is certain his athletic career has prepared him to compete in the pin-or-be-pinned world of business.
Rejection isn't defeat
Financial planning isn't a career for the weak-of-spirit; it's a competitive business of hard handshaking, relationship development and continuous product training. Most prospects already own the products Ghaffari sells (life insurance, annuities and mutual funds), and they're contacted by Ghaffari's competitors every day.
As the wrestler aptly describes it: "I am in the rejection business."
But every day, Ghaffari reinforces in his own mind that each 'no' brings him a step closer to the next 'yes.'
He repeats a simple mantra that has characterized his wrestling career: "Never give up."
Born in Iran, Ghaffari moved to the United States in 1977. As a seven-time U.S. national wrestling champion, he developed his resolute attitude while struggling at the highest international levels of an ancient and primal game.
"That's the lesson in the sport," he says. "With the Russian (Karelin), I lost to him 20 times. But I can live with that. In my business life, never give up means staying after clients and telling myself that I'm going to make this big company my client. I might have to work on it for two years and move slow, but I'm going to do it."
Perhaps more important is the lesson he learned from the media attention he received after his silver medal performance at the 1996 Olympics in Atlanta: The winner isn't always the guy everyone wants to meet.
"Sometimes it's the guy who never gives up and comes back again, only to try harder."
Big successes are the sum of a series of small ones
At 6'4'' and 300 pounds, Ghaffari is an imposing figure in a suit and tie. But his warmth and sincerity must make him seem like a gentle giant to prospects.
Right now, he's trying not to think about the big deal that might move him up the corporate ladder; he's concentrating on the fundamentals-building a career one sale at a time.
"It doesn't matter how big or small a client is; once you close a deal and get a check, even if it's a dollar, it feels good," he says. "Small sales build confidence."
This is a lesson he has already learned. At his first Olympic trials in 1980, Ghaffari didn't make the U.S. team. Same with his second and third tries. In his fourth attempt, in 1992, he finally earned a spot on the team. But he didn't win a medal.
The Atlanta Olympics was his fifth try. He won the silver after losing 1-0 in a marathon, extra-rounds match against Karelin.
"The sixth one's going to be a charm," he predicts. "Building confidence with each step gives you the courage to go out there and stick your neck out to get chopped off. Every day you test yourself ... and it's always a new test."
Everyone needs a coach
Ghaffari draws parallels between his wrestling coach, Anatoly Petrosyan, and his boss/mentor, Dan Brennan-owner of Brennan Financial Group. "Get a coach who wants to teach you," says Ghaffari. "Then listen to whatever he says."
And, according to both mentors, Ghaffari isn't just talking.
"So far, in the past seven years, Matt's my best student," boasts Petrosyan. "Anything I say to him, he does."
Brennan adds that Ghaffari's wrestling background seems to have helped him identify and tune in to the people who are best able to help him.
"He's very coachable," says Brennan. "If we say to him, 'this is what you need to learn, this is what you need to do,' he doesn't question it. He has confidence that we're coaching him properly, and then he works to develop and strengthen that skill."
Like that annoying kid on the high-school football team who enjoyed wind sprints, Ghaffari says he looks forward to Wednesday training classes at Brennan Financial. "That's where we go over mistakes we make," he says, "and learn how to improve on them for the next time."
Never treat anyone as a lightweight
Not long ago, Ghaffari met with a woman who had just been through a difficult divorce. She had no money and made it clear that she thought the process of developing a financial plan was a waste of time.
"She said, I'm not a doctor. Can poorer people have financial planners too?"
Ghaffari spent time to help design an appropriate plan. It's the kind of thing young financial planners do. So perhaps Ghaffari is just being young and idealistic when he says: "It's great to help people with millions of dollars, but you also have to help people accumulate wealth over 20 years. Just because they're not rich doesn't mean they shouldn't have the same opportunities."
But the lessons he's learned on the mat may, in fact, have instilled the discipline to take even the small challenges seriously.
"If I can beat a guy really easily there's no challenge to it," explains Ghaffari. "But if you beat the guy you're not supposed to beat, that's a great victory. I hadn't wrestled in two years, since Atlanta. But I stepped onto a mat August 31 (at the World Champion-ship), and beat the guy who took second last year. Everybody thought he would beat me. They figured that I wasn't ready. But I found I'm still the best challenger."
If you can't improve on the last performance, at least improve the effort
Even when Ghaffari closes a deal, his training as a wrestler doesn't allow him to sit back and enjoy it for very long.
He and his partner, Jonathan DeMell, set weekly goals and push each other to meet them.
"We can't go home for the week unless we do it. It's real easy to say we tried our best and go home on Friday at 5 p.m., but there are always ways to improve."
His goal this year is to greatly surpass the level of revenue needed to make his company's Hall of Fame-a major feat for a first-year associate.
"If I fall short, I'll be the best this company has," says Ghaffari."
Brennan says Ghaffari is "a better than average" representative. "Matt has a passion," he says. "I think people recognize that and see that he's there for the right reasons when he talks to them."
It's the same work ethic that impresses Petrosyan, who considers Ghaffari the most disciplined student he's ever coached.
"Actually, he's not very talented (as a wrestler)," Petrosyan says. "But, he has a very strong heart and is a very hard worker. That's why he's so successful. It's because of his discipline."
"I'm very hard on myself," Ghaffari explains. "It comes from wanting to be better than the best. If I win the Olympics I want to dominate my opponent and pin him. Winning ... is not good enough anymore. I want everything. That's what drives me. Twelve-hour work days are normal because I want my business to be successful."
How to reach: Matt Ghaffari and Brennan Financial Group, (216) 621-6000
In mid-1997, Atlas Steel Products Co. president and CEO Lawrence Burr had a problem. His Chicago processing and warehousing facility's second five-year lease would soon expire, and because the plant was underutilized, it didn't pay to renew the lease.
But the decision was about more than simply trimming costs. The company-which processes aluminized steel-had spent 12 years establishing its Chicago market and wanted to keep a presence there. "It was part of that year's strategic agenda to resolve the issue," recalls Burr. "But we didn't want to abandon Chicago, because it's an important region for the steel industry."
So Burr explored other options, including building a new facility. Each option had its own problem, and all were nixed. Then Burr called an old friend, Gary Hamity, to discuss his dilemma. Hamity, owner of Mapes and Sprowl-a Chicago steel company with which Burr had done business for years-had his own problems, stemming from oversupply in the steel industry.
It was a timely call, says Burr. "Coincidentally, they (Mapes) were looking to enter into an alliance. We'd known each other a long time and trusted each other implicitly. It was a good match."
In November 1997, the two steel companies formed a strategic alliance which allowed Atlas to phase out of Chicago Heights (and consolidate operations at its Twinsburg site) and use Mapes & Sprowl's Chicago facility to depot steel for local customers. In return, Mapes & Sprowl depots its steel at Atlas' Twinsburg facility.
The arrangement was so beneficial that in August 1998, Burr initiated another alliance, this time with Sumitomo Corp. of America, a New York-based steel distributor. Sumitomo and Atlas had also worked together, and the ensuing agreement was similar to the Mapes deal-Atlas would depot its steel at Sumitomo's four Midwest service centers-Detroit, Columbus, Cincinnati and Nashville-and Sumitomo would use Atlas' facilities to depot steel for its regional customers.
For manufacturers who need to slash costs and keep their competitive advantage, a strategic alliance may be an effective solution. Here's how Atlas' two alliances allow the company to save money while maximizing facility use and increasing its customer base.
By shutting the Chicago Heights facility, Atlas removed that building's lease and its associated expenses from the company's budget. And while all 13 Chicago employees were offered positions in Twinsburg, only one accepted the move. That further cut costs. Burr then sold one of the two steel slitting machines based in Chicago and moved the other to Twinsburg, which increased Atlas' processing capacity.
"That pulled an enormous cost of that second facility out of our business," says Burr. "And with changes we'd made in our workforce here, we were able to do more with the existing workforce (in Twinsburg)."
Steel previously cut in Chicago was now slit in Twinsburg, then shipped to Mapes' Chicago operations for regional distribution.
Better use of space
Because Atlas no longer needed to store steel for its Chicago, Detroit, Columbus, Cincinnati or Tennessee customers in Twinsburg, it freed up space in the company's existing 65,000-square-foot plant.
Before the alliances, the Twinsburg facility was filled to capacity, and Burr was considering expansion. Now, however, even with Sumitomo's and Mapes' products stored in Atlas' facility, expansion plans have been put off.
"We'll grow intelligently now instead of for the sake of growing," says Burr. "I believe in smart growth."
And when it does become necessary, Atlas won't need to move. The facility sits on 15 acres, where Burr says it will be possible to expand to 200,000 square feet.
Access to new markets
Neither Sumitomo nor Mapes competes directly with Atlas-their steel products are drastically different from those produced by Atlas. Sumitomo deals in hot-rolled and cold-rolled steel while Mapes specializes in enameling and silicon steels. That, says Burr, creates the opportunity to tap into the others' existing customer bases. "We currently share two customers (with Mapes)," he says. "This gives us the opportunity to pursue customers who use both products."
That works both ways. As Atlas reaches Sumitomo customers who need aluminized and heat-reflective steel, Sumitomo is able to market its products to Atlas' customers.
It's an arrangement that's especially convenient considering where the companies are located. "Because of the geographical spread, we broaden their market as they broaden ours," explains Burr. "We're all able to serve our customers more efficiently."
All of this has given Atlas a suitable alternative to consolidation. Burr admits that in recent years, his company has been pursued by large consolidators looking to expand their product lines and gobble up Atlas' customer base. Now the alliances have helped Burr create a one-stop shop for steel products.
Innovation, though, isn't a new concept for Burr. He's bucked conventional wisdom regularly since he bought Atlas in 1983. Back then, the company was a $3 million aluminized steel supplier, with barely a dozen employees. But the tough-nosed former journalist envisioned ways to make it grow. He instituted a team approach to the company and empowered his employees with major decision-making abilities covering how the operations were run. "They had wisdom," Burr says. "They knew there were ways to do it better." That type of approach was basically unheard of in the 1980s.
Now, 15 years after he began streamlining his company's processes and utilizing his employees' skills and talents, Atlas is one of the leading providers of aluminized steel in the nation. It has 64 associates and revenue in excess of $50 million. Burr says these alliances provide an opportunity to quadruple those figures in the next few years.
Joint development of new products
As one of the benefits of the agreements, Atlas will place equipment in both Mapes' and Sumitomo's facilities. That enables the companies to process small batches of Atlas' products for just-in-time delivery.
Atlas, maintains Burr, is just taking advantage of its niche market strength and parlaying what it can do for both Sumitomo and Mapes. "It's a more effective use of resources," he says.
By understanding each company's processes, it's possible to develop new products from which everyone benefits. But it's not something any company can do. "As long as you can do it with people you trust, you can maximize your opportunities," he says.
Burr says he expects to duplicate the model created by these two alliances and forge new alliances. And he's considering turning the tables on those pesky consolidators he's worked so hard to avoid. "We're also looking at acquisition strategies."
When President Tom Sincharge spent some real time with the three proposals to move Yesterday Corp. into e-commerce, he found that each addressed the companys needs from a different perspective.
All three warned against simply throwing money at technology for technologys sake and recommended that any solution must be able to grow as the company grows.
But thats where the similarities ended. Heres how Sincharge categorized the differences.
One piece at a time
Arif Cubukcu, president of Beachwood-based Innovative Organization Systems Ltd. (IOS), suggests that Yesterday Corp. design a sophisticated system one piece at a time, eventually tying them all together.
That would include a first phase investment in hardware, such as the main and back-up serversto run all computer operations and handle the Web site. That would coincide with development of a Local Area Network so Yesterdays employees could share data and software, and installation of a dedicated Internet connection to support the company Web site and carry EDI (electronic data interchange) transactions.
After that, Yesterday could add operational and e-commerce softwareCubukcu cites specific off-the-shelf products that handle general business functions, such as Gentran, Maccola, Solomon, UA Accounting and Microsoft Back Officewhich would be shared through the network.
You want to be able to enter data once and make it available to anybody who needs it, explains Cubukcu. The last thing you should do is duplicate your efforts.
A main concern with this approach, warns Cubukcu, is that when you begin writing code to tie software together, you increase the chance of problems. I believe in buying components that are already designed, he says. But its a big puzzle and you have to find a way to put everything together.
Based on data provided to Cubukcu about Yesterday Corp., he believes it would also have to invest in about 20 PCs for its three locations16 for the main offices and two each for the manufacturing facilities. Eventually, each of its 10 inside salespeople would need a laptop computer, too.
The main component of the approach Cubukcu recommends is a comprehensive Web site that would:
- provide customers and prospects with information about Yesterday Corp. products;
- accept orders;
- accept payment or generate an invoice for established clients such as Grande (see previous article: The Ultimatum).
Eventually, Cubukcu says, the entire operation could be integrated, so a new order on the Web site generates a shipping label in the warehouse, an entry in the inventory system, a receivable in the main office and a detailed report to the sales team. But he considers those to be second phase.
The first phasebasic hardware, software and setting up the Web sitewould cost $125,000 to $175,000, based on Cubukcus estimates.
Putting the catalog online is something that can be done immediately, he says. But you haveto leave it open in its design so that you can expand it to become part of an accounting or inventory system later.
To demonstrate the capabilities that Yesterday Corp. would have, Cubukcus team at IOS Ltd. designed a model Web site, which you can find at yesterdaycorp.cyberorg.com.
The turnkey solution
Mark Geyman, director of marketing for NetForce Development, in Woodmere Village on Clevelands East Side, prefers to reduce the risk that comes with tying together varied computer applications. To do that, he recommends installation of a turnkey system that satisfies Yesterday Corp.s short-term needs and long-range goals.
After a series of meetings with key management to determine exactly what those needs and goals are, the first decision is whether to use a PC-based (Windows) network server or a substantially more costly Unix-based platform, says NetForce President Lauren Patrick.
Patrick suspects a Unix-based server is probably more powerful than what Yesterday needs.
A second issue in the turnkey approach is whether to write custom softwaremore costly than off-the-shelf products, Geyman says. He figures Yesterday would be best served in its Internet needs with a product from Microsoft or Netscapeboth affordable and capable of being customized to a degree.
Next, the company would need to establish a LAN for each of its locations and connect the LANs with a virtual private networkan Internet-based means of connecting remote locations. Patrick would recommend using a national Internet Service Provider such as UUNet or Digex rather than a local provider for the simple reason that sales people or executives who are traveling will find it easier to connect with the office.
However, with all of its operations anchored in Northeast Ohio, there are local providers that could do the job.
Because of Yesterday Corp.s four-month deadline, the heart of the turnkey approach would focus on the infrastructure first, then make EDI and e-commerce the top priorities.
After that, the other applications can be phased in, with the companys existing database being converted to fit those packages.
The best option would be to start with accounting and inventory now, then bring in sales in six months, says Patrick That type of phased-in approach would allow Yesterday to grow.
Such a solution would cost between $125,000 and $200,000.
One project and one goal at a time
Its difficult to anticipate changes or problems that might pop up in the future, says Joseph LaMantia, vice president of DeCarlo, Paternite & Associates Inc. in Independence. Thats why he favors tackling the challenge as a series of small projects.
LaMantia says a quick evaluation of Yesterdays situation showed the company was in dire need of information system planning, hardware infrastructure, networking, data communication, business systems software (e.g., ERP), EDI, e-commerce and technology integration.
When we came in and looked at them, we saw they didnt have a strong MIS staff. No one understood technology, no one understood how to leverage technology for a solution, there was no consistent IS budget and no strategic plan, he says. The company was reactive, not proactive and considered Information Services a less important area in the company.
Yesterdays executive management, he continues, had no understanding between EDI and e-commerce.
In a typical project-by-project approach, the company starts with an extensive self-analysis (with help from consultants) to determine short- and long-term needsnot just what a CEO or board of directors thinks the company needs. Thats a two- to-four week process, followed by joint development sessions between consultants and management to write a long-range plan, or Information Systems Strategy Plan (ISSP).
According to DPAI Senior Consultant Brett Rabung, the resulting document contains many smaller projects over a period of one to three years. In a case like Yesterdays, those individual projects eventually add up to satisfy a companys larger goals.
Explains Maher Atwah, DPAIs technical manager, As an entire project, its too hard, but once you break it down project by project and goal by goal, its easy to accomplish.
This approach also calls for a Web site, which becomes the center of all communications. DPAI general manager Don Snyder says that probably means starting with a basic Web site that advertises Yesterdays products, tells a bit about the company and allows customers to place and pay for orders. Over time, a private portion o f the site could be developed for use by only those with access codes, to share private and timely information between locations, with traveling employees, and with customers and the external sales force.
Operations could be tied together gradually by implementing a phased modular ERP system, starting with a manufacturing module, says LaMantia. While this could result in a very expensive solution, it allows a company to add other modulessuch as accounting and sales packagesas it can afford to make that type of investment.
An immediate goal, explains LaMantia, is to integrate EDI capabilities into current infrastructure. In Yesterdays case, that allows the company to retain Grande as a customer. Such a project includes training Yesterdays work force about the differences between EDI and e-commerce.
The final part of a phased-in approach is to plot the next stage of technology integration, and consider any changes in the way a company may do business to satisfy its customers technological needs.
Such an approach, according to LaMantias estimate, would cost between $50,000 and $125,000 for the first stageEDI and e-commerceplus another $10,000 to $20,000 for development of a comprehensive Information Systems Strategic Plan.
The board decides
After Sincharge finished his presentation, two board members suggested Yesterday scrap the entire project and take its chances by losing Grande as a customer. Another demanded Yesterday choose the least expensive plan and build a skeleton system that only satisfied Grande.
There was agreement all around that Sincharges original plan was simply too large and expensive to implement all at once. We looked at the hard figures and realized that we couldnt just jump headfirst into this, Sincharge says. It wasnt cost effective.
Instead, the board decided the company needed to analyze its complete needs, develop an ISSP and move forward with the project in stages, beginning with Grandes EDI demands and installing a new network system and Web site. After that, says Sincharge, Yesterday would integrate software with greater interconnectability and develop an intranet.
We really wanted an efficient long-term solution, even if it cost more money up front. We didnt want to put all our efforts into a short-term solution only to find that we had to start from scratch the next time we had a new idea, he explains. We figured if we did it this way, as we grew wed save money on the back end as we started to see a return on our investment. Bottom line, we went with a plan we could swallow.
The company also called a recruiting firm to help hire an MIS director to oversee the companys network needs.
In early January, Yesterday took its EDI capabilities live, satisfying Grande and keeping it as a customer.
EDI vs. e-commerce
EDI is a method of ordering and payment through dedicated software programs specific to each customer. It is the favored means of exchanging money among large corporations, because it is secure and the ultimate in customer focused: Its customized to fit each companys own operating needs.
E-commerce, on the other hand, provides a one-stop electronic commercial outlet for multiple customers who log on and conduct business through a Web site. While security is no longer an issue, perception of security remains a barrier for some. While e-commerce aims for convenience to customers, its a one-size-fits-all solution designed by the seller rather than the buyer.
- Don't get overwhelmed; it starts with a phone call.
- Prepare to make an investment. It costs money, but returns are easy to come by.
- Staff up. You'll need to hire a dedicated in-house information systems specialist or pay an outside firm for ongoing help. Don't try sneak responsibility for information systems into the job description of an employee in another department.
- Plan for the long-term before buying for the short-term.
- Consider what technology might be used for:
- Exchange of money
- Customer service
- Inventory control
- Data collection and analysis
- Increased internal communication
- Joint venturing
- Sales and marketing
- Training and staff development
- Prioritize needs and address them in order.
- Let the business needs drive technology decisions-not the other way around.