Despite delays, Web-based applications satisfy manufacturers
THREE COMPANIES' EXPERIENCES:
At a recent talk, I introduced my audience to the study, "The Intranet: Slashing the Cost of Business" by Ian Campbell of International Data Corporation (Framingham, MA). Campbell profiles seven companies--five of which are manufacturers--that were among the first to implement significant Web-based applications. The rates of return on investment are impressive. The average ROI is 1,400%! Equally impressive are the investments required--between $833,000 and $4.2 million.
When I polled the hundred people in my audience I found that all of them would be happy to undertake a project with that sort of return on investment. However, all but four of them felt that a project with that level of investment would never get off the ground in their companies.
I was reminded of Sir Isaac Newton's comment, "If I have seen further, it is by standing upon the shoulders of giants." Clearly, what my audience wanted was an opportunity to stand on the shoulders of some mere mortals like themselves.
Many companies have mounted successful intranet application efforts--all with more modest investment requirements and more modest expected returns. I have chosen to profile three of those companies. Those of you who are contemplating an intranet or Internet project to solve a business problem or service customers can see a bit further by standing on their shoulders.
All three companies' projects are up and running. Users are getting the value that was anticipated. The companies view their systems as successful. They all plan to add capabilities and expand their user base. But success did not come automatically or as quickly as they would have liked it to.
Harris Corporation, Farinon Division (Redwood Shores, CA) produces cellular telephone transmission systems at five manufacturing locations in the United States, Canada, Brazil and China. Since 1996, the engineering departments in Canada and California have used a client-server-based engineering document management system from Workgroup Technology (Lexington, MA) to manage their 60,000 drawings, procedures and engineering change orders that are under IS0 9001 control. In late 1997, Neil Watts and Yves Plante put into production an add-on application to make those documents available to people in their manufacturing, field service and sales offices via their Web browser and the company's intranet. Now, more than 300 people in manufacturing, sales and field service facilities are taking advantage of view and print access to those documents.
Mott's North America (Stamford, CT) manufactures fruit juices and processed fruit products that it sells through a network of independent food brokers in the United States. Those brokers sell the products to their customers--the stores where you and I buy them. During 1997, a Mott's project team led by Catherine Riordan implemented a Web-based service to its broker community that allows the brokers to get online real-time information from the company's SAP (Philadelphia) R/3 database about the status of orders. By December 1997, the system was in use by 225 brokers and 100 members of the Mott's sales force.
SEH America (Vancouver, WA) manufactures the silicon wafers that are the raw material for semiconductor chips. In October 1997, a project team led by Pauline Rule of the Quality Assurance Department brought online a Web-based document management system using software from PC Docs (Burlington, MA), which allows SEH employees to have view-and-print access to the company's ISO 9002 manufacturing procedures from more than 1,500 PC workstations on the manufacturing campus. This month the team is rolling out a Web-based workflow system to handle the review and approval process of revisions.
Scope of the effort
All three companies' efforts are modest when compared to the companies in the IDC study. That is primarily because of their reliance on intranet software tools and applications provided by their document management and enterprise resource management (ERP) software vendors.
All the companies had small project teams--one or two internal staff members who were assisted by experts supplied by their document management and ERP vendors. Mott's seems to have enjoyed the most straightforward implementation.
"We began implementing our Web-based broker information system in June 1997," said Catherine Riordan. "Our team consisted of a full-time, in-house programmer who knows her way around ABAP, SAP's customizing language, and a half-time, in-house Web applications programmer. During the project we had the full-time, on-site help of an SAP systems engineer who showed us how to use SAP's new ITS Internet software.
"Since this was our first experience with Internet applications, learning curve issues took up about three weeks of our project time," Riordan continued. "Out of naiveté we assumed that if the application worked with one browser, it would work with another. We knew that brokers would use our application with several Web browsers. However, we tested the pilot system with only one vendor's browser. We were wrong. Fortunately we caught this early on, well before we went into full deployment. Since then we have made sure we used several different Web browsers in our test suite. Still, we had our pilot set of brokers using the system in August and full deployment to our entire broker community by the end of 1997."
Both Harris Farinon and SEH incurred about a nine-month delay in their projects because the document management vendor's supplied software was not "ready for prime time when we got it," as one person put it. For Harris Farinon, problems persisted until its vendor delivered Version 2 of the Web-based software. According to Yves Plante, "In November 1997 I went to a one-week class on the Version 2 software. I came back and installed the new software with no difficulties. It's been very reliable ever since. We now have a full complement of satisfied users in our U.S. and Canada manufacturing facilities."
At SEH, success came not from new software but from dogged persistence. "This was our first serious intranet application and we had lots to learn," said Pauline Rule. "We underestimated the level of difficulty involved. Simple things like getting the correct hardware and software configuration for the intranet server caused us 12 weeks of delay. Then there were problems caused by the lack of documentation and plain old bugs in the Version 1 software. It took lots of tech support phone calls, on-site visits from vendor-supplied experts and software patches from the vendor to isolate and correct these problems. Next time around I will make sure that I budget and build into my implementation plan support from the vendor and, if appropriate, from third-party consultants to supplement the efforts of our in-house IS department. Our in-house staff had the experience and the ability to do the entire job. What they didn't have was the extra time that this project turned out to require."
Why a Web platform?
For Mott's it was the only way that made sense. "We had done some prototyping with a client-server-based architecture," said Riordan. "It worked OK, but we didn't see how we could get our independent broker community to accept it. As one broker put it, 'I handle some 20 different lines. No way I am going to install 20 different PCs, call 20 different central computers and learn 20 different user interfaces.' A Web browser-based Internet application addresses all of our brokers' objections. In addition, we could do a good job of making the user interface attractive to the casual user. The heart of this system is real-time order status information out of our SAP R/3 database. Anyone who has used the regular SAP client-server GUI knows that it is not designed for the casual user. When our director of customer service saw our Web interface for the first time, he asked if he could use this for all of his R/3 work."
Jeffrey Nolan, a marketing manager for SAP's Internet initiatives, agreed, "SAP R/3 is not designed for the casual user who only makes use of a small subset of the most common transactions. We built our Web-enabled self-service applications to make the power of R/3 available to that group of casual users. Mott's North America is proof that we have been successful."
SEH saw the intranet as the best way to make its documents available to its more than 1,500 users on the manufacturing campus and in field sales offices. As Tom Miller of SEH's IS Department said, "Deploying this application using a client-server model would have required us to install and maintain application specific software on each of the user's PCs. We know that this was impossible. Any solution had to rely on only the standard client software, which for us at SEH is Microsoft Office including Internet Explorer."
Harris Farinon came to the same conclusion. Interestingly, both Harris Farinon and SEH have standardized on Adobe Acrobat PDF for the display format of all documents. "The documents that our engineers work with are in a great many formats," said Plante. "We use several CAD systems. Our Canada facility uses Framemaker. We use several word processors. All of our old engineering change orders and some source documents were only available on paper, so we had to scan them into the electronic document vault. Making all of these documents available for viewing and printing in their native format would have required us to purchase and install at least one document viewer on each desktop. For some of our 3-D CAD formats, there just isn't any viewer software available.
"By rendering the documents into PDF format, the view on the screen is exactly how it appears when it is printed from the native application. I built into the EDM system an application procedure that automatically creates a companion PDF rendition whenever a document is released for publication. We added the free Adobe Acrobat Viewer to Microsoft Internet Explorer. That's all the software a user needs to get view and print access to our engineering controlled document vault."
What about security?
Only one company, Mott's, makes its system available via the Internet. "Our system was designed for use on the Internet by people who do not work for Mott's," said Riordan. "We obviously had to focus on security. Each broker has his own log-in and password. Our application ensures that a broker only has access to information concerning his own customers. While this system sits inside of the company's firewall, its only link back inside the company is through the tightly controlled transaction server, which can issue a limited subset of queries against R/3's Sales and Distribution module."
For Harris Farinon the promise of access via the Internet offers a lot of advantages, particularly to remote locations. Plante said, "Our China manufacturing facility is our only one that does not have online access to our controlled documents. We still have to send them periodic batch updates. It's too expensive to increase the bandwidth of our WAN connection to this China facility."
So far the system can only be accessed on the company's intranet. The U.S. and Canadian manufacturing facilities access the system over the WAN. Field service people dial into the WAN via a RAS server. Plante explained, "We don't feel that the security is adequate if we allowed access to the system through the Internet. I want to do this as soon as we can become comfortable with the security issue."
All three companies began talking about implementing a system years before their Web-based implementation was completed.
Harris Farinon had deployed several proof-of-concept document management systems in the United States and Canada before 1995. In their Montreal facility engineering department in 1994, Neil Watts and Yves Plante purchased and deployed a robust client-server engineering document management system. In 1996, the same system was adopted in the California engineering department. In mid-1996, Plante became aware of a third-party provider of a Web interface to the system. He was all set to purchase it when his document management vendor offered its own Web interface software. He opted for the vendor-provided software solution. "It took our vendor most of 1997 to make this Web-based software useful to us," said Plante.
Penny Shepherd in SEH's Quality Assurance Department started in 1995. "We spent $30,000 putting up a pilot system in 1995. We delayed deploying the system because of budget constraints and the fact that it just didn't have the capabilities that we needed to justify going forward. This was fortunate for us because the technology that is available today is much better than a few years ago. In 1996 we took another look and selected a document management software vendor. It had a good client-server system and told a good story about its soon-to-be-released Web-based access software. We decided to deploy a small client-server pilot within the Quality Assurance Department to handle the administrative tasks, but to delay deployment to the larger community until we could use the Web browser interface. We went to training on the EDM system in August 1996. It wasn't until October 1997 that we were fully operational."
Like Harris Farinon, SEH's document vendor had rushed its initial Web offering to market to plug a hole in its product line.
Mott's IS people attended events in 1996 where they saw SAP and several third parties demonstrate Web-based applications coupled with SAP R/3. Riordan said, "We knew that this was the best way to offer a superior service to our brokers. However, we had to wait until August 1997 for the final pieces of SAP's Internet integration enabling software pieces to be available."
Timing had much to do with the amount of effort required to implement the systems. As 1997 progressed, more and more software vendors came out with Web-based software that was robust and full featured--a far cry from the demoware placeholder software that first appeared in late 1996.
If Harris Farinon had waited until autumn 1997 when its document management software vendor began shipping Release 2 of its Web-based software, it would have avoided nine months of false starts and user frustration.
Same goes for SEH. As Pauline Rule said, "Just about when we went into full production, our document management vendor began shipping Version 2 of its Internet product. It's much improved. Better search capabilities. Easier to customize. I am sure that we would have avoided a lot of headaches had we waited. We are testing this new version now."
Mott's waited until June 1997 to begin work and its implementation has been the quickest
Justifying the expense
"At SEH, we have a sprawling manufacturing campus," said Penny Shepherd. "We in Quality Assurance spent a lot of time and resources maintaining our many paper documentation stations ensuring they were correct and current to the latest revision. We easily identified $70,000 a year in hard dollar savings that we would enjoy by eliminating paper."
Adding the intranet interface to Harris Farinon's existing client-server document management system was easy to justify. As Plante said, "The cost of the additional software licenses was reasonable. We expected deployment and maintenance for Web-based applications to be simple. It was the only way we were going to be able to afford the cost and effort to make these documents available to our user community outside of the engineering department."
When Riordan's group at Mott's was told to proceed in mid 1997, they went through an informal investment justification. "We knew that our brokers would appreciate the ability to get real-time order status information," said Riordan. "We OK'd spending the money on an improved customer service and improved access to information basis. As for cost savings, it's the brokers who are the real beneficiaries. Recently one of our brokers calculated that using our Web-based system saves him $2,500 per year."
"At SEH, we are at the tail end of our rollout of a Web- and E-mail-based review and approval process for procedure revisions," said Rule. "We have coupled a Web-based workflow software product with our EDM electronic vault."
"In 1998 at Harris Farinon we will implement a Web-based engineering change order review and approval process. This will require our extending to our Web-based users the ability to redline markup documents and to check documents in and out of our electronic vault," Plante said.
"At Mott's we are discussing the idea of letting our brokers have real-time access to information on the available-to-promise inventory (ATP)," said Riordan. "Technically it's easy. We have to make sure that the broker understands that another broker could place an order in the next 30 seconds that could greatly reduce the available-to-promise inventory. That's a problem if, based on the real-time information, the broker tells his customer that he could have 7,000 cases of product and suddenly, before he can put in his EDI order, an EDI order from another broker takes the inventory. Right now we are riding a wave of tremendous customer satisfaction. I am reluctant to do anything that tampers with our approval ratings."