A global market economy – what is means for U.S. manufacturers and IT providers
Global competition is making it more difficult for American manufacturing companies to make a profit. Manufacturers need to become more agile to compete globally with economies where the cost of labor is an almost insignificant part of the cost of goods and they have access to the same high tech manufacturing equipment. It is time for forward thinking, competitively focused comanies to move to the next generation of IT tools, and strengthen their manufacturing and management information systems. Technology providers need to provide manufacturers with cost effective, highly mobile, highly adaptable, thin-client competitive capabilities. These capabilities will come in the form of software which is web-based (or web-native), object-oriented, model-driven, thin-client, configurable and offered as a service (SaaS).
Old ERP technology – the first generation
The truth is that first generation ERP applications lack the flexibility to add or change functionality and they just aren’t capable of full web funtionality. Because of their age and code foundations, most existing ERP vendors just can’t provide the full range of functionality made possible by the internet-native technologies. The ability of the native browser-based applications to interact with any device that can run a browser i.e. PDAs, cell phones and various data capture devices makes them intrinsically more valuable than the old ERP systems. These old legacy systems are difficult to expand and modify to make use of these wireless devices, or to change and add any new functionality to the system. It is also costly and laborious. Some vendors try to present the old systems in a browser and shareit for laptop call the applications “web-enabled”, using a technique known as “screen-scraping”. But don’t be fooled. Web-enabled does not mean web-browser native. These applications lack all of the abilities and advantages of a truly browser-native application. These first generation ERP vendors are racing to convert their aging, first generation offerings to the new, object-oriented, browser- based model of software. This is a difficult task, since the internal source code for these older packages is fundamentally unsuited for the web and cannot make use of the native functionality of the web browser. The total cost of owernship (TCO) for first generation systems is high, due to the legacy code burden, thick-client server setup and heavy support infrastructure. Much more IT workforce is needed to support a first generation ERP application.
A new vision for information technology – next generation software
The ultimate goal for any manufacturing organization is graphic, actionable, timely information when ever and where ever it’s needed to support performance. Next generation software makes that goal attainable. Every manufacturer wants supply side and finished goods inventory reductions, energy use reductions, operational efficiency improvements and increased overall efficiency. Browser-based software applications which are easily configured are allowing manufacturers to become lean. A lean organization is one which can quickly and effectively adapt and make changes which lead to better productivity. The success of any software implementation needs to be measured by the achievement of benefits such as a reduction in manufacturing operational costs, a reduction of administrative costs, improved complete and on-time shipments, improved customer satisfaction and improved manufacturing schedule compliance. Next generation software, which is fundamentally different in design, function and form from legacy applications, is the beginning of the software revolution. Although the first generation systems have had their place and time, business practices of the new millennia, wireless technology, and the need for flexible systems is more than these aging systems were designed to deliver. The time has come to move on to a new generation of browser-based, object-oriented, model-driven toolsets which have the flexibility and functionality needed to carry us to the next level. The ultimate goal, real-time availability of information, is now attainable