Of course, the more they stay the same. I write this from Sweden where I am attending the Integration in Manufacturing (IiM) conference of the European Commission's Esprit Group. As you know, Esprit usually provides Evolving Enterprise with an update on its activities but this issue lacks that information. Why? For one reason, the directors are busy with this conference and their larger one in Vienna in November. In addition, they are preparing for their Fifth Framework initiative which starts in 1999. Instead, I came to their conference to see for myself what is going on in the European Union in regard to manufacturing, research and development.

Bror Salmelin, head of the IiM project at the European Commission in Brussels pointed out some issues in his opening remarks. For example, the Commission has defined what must seem like universal problems of manufacturing: It's changing rapidly, it's getting more complex, it's global in nature and it is no longer linear. Most managers can see that, regardless of their geographical location. The speed of change, the complexity of processes, the globalization of manufacturing and, equally important, the globalization of the supply chain, are issues that we all face, maker or consumer. The non-linearity of the business might be a bit more esoteric.

First, the linear approach that has been the standard for generations, was one where the research department came up with a great idea, defined the parameters and passed it to the engineering or development group to refine. The product took shape and was prepared for manufacturing when the marketing department was brought into the equation. In substance, the idea people were telling the marketing people, "Here is a great idea, find someone who will pay us to make it."

According to Salmelin, today European manufacturing is seeing a movement to parallel development where the departments all are involved at the earliest stages. The concept of concurrent engineering is in place, marketing and information systems are working in parallel with research and development, and manufacturing is no longer the last to know what is going on. In many ways, this is a refinement of the concurrancy we have been discussing for a decade or more in the United States.

But Salmelin added a slight twist to the concept by noting that "products," as we know them, are being replaced by "extended products." No longer are we making things for people to buy, we are making packages for purchase. And within those product packages must reside the true differentiation that gives a company a competitive edge — service.

He coined the term — at least he's the first I have heard use it — embedded services to explain the need to produce a tangible product bundled with services that make it more valuable to the buyer. Many software companies have followed this concept for years, although if you ask their users, you might get the idea that more have slipped away from the service side than have embraced it. After sale support, customer service, value-added combinations of products and support are the wave of the future, and the sooner the better. And a key differentiation might well be the use of a toll-free support number instead of a pay-per-minute-while-you-are-on-hold number. By considering the value of the embedded services you add to the tangible product, the quicker you can see the total cost of production and the more important figure, the total cost of ownership for the buyer. The marketplace is already becoming aware of that latter figure, and if your company can't compete in this new paradigm, better watch out.

And that is a universal, never-changing condition: compete or else.

—Tom Inglesby, Editor

Web Site © Copyright 2020 by Lionheart Publishing, Inc.
All rights reserved.


Lionheart Publishing, Inc.
2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA
Phone: +44 23 8110 3411 |
E-mail:
Web: www.lionheartpub.com


Web Design by Premier Web Designs
E-mail: [email protected]