VOLUME 1, NUMBER 3 | FALL 1998

INDUSTRY outlook

DataWorks and Platinum — Merger Ahead


Platinum Software and DataWorks Corporation will soon merge into a new, more formidable company that addresses the midrange market for enterprise resource planning (ERP) systems. While the announcement was a shock to many, including Wall Street — both companys' stock dropped the next day — a sobering look at the market in general resulted. George Klaus, Platinum CEO, explained that the combined company would be better able to meet the growth dynamics of the ERP and midrange manufacturing marketplace. He said, "Looking ahead to the new millennium, we see an opportunity to accelerate our growth and build critical mass right in our own backyard." Whether he meant the geographical backyard — both DataWorks and Platinum are located in southern California — or the market — both have ERP offerings, although Platinum is perhaps better known for its financial, human resource and "front office" applications.

Klaus' counterpart at DataWorks, CEO Stu Clifton, commented, "The combination allows us to meet the new requirements for customer functionality and increase our worldwide market penetration." Clifton will become the vice chairman at the combined company which will maintain the Platinum name.

In another Platinum announcement, the company noted it has begun expansion in the Asian market with an ERP solution targeted to midsized companies, especially those worried about the Year 2000 issue. This excursion is based on previously acquired products, not the DataWorks offerings. Platinum had bought Clientele Software and FocusSoft recently, adding the ERP suites from those companies to its line. Paul Han, Asian regional manager for Platinum commented that, "Many companies require software that covers the front office and back office. Platinum has developed a fully integrated software that meets this need."


Innovation and Creativity Celebrated


The Second Annual NAM Awards for Workforce Excellence were given out by the National Association of Manufacturers, a major trade association in the United States. Co-sponsored by Arthur Andersen and the Center for Workforce Success — the education arm of NAM — the award is presented to teams from three levels of companies as determined by the company's size.

The winner in the large company category was Coors Brewing Company's Continuous Safety Initiative team. In midsized companies, the winner was New United Motor Manufacturing Inc. (NUMMI), a joint venture of Toyota and General Motors started in the mid-1980s, while Midwest Industries of Ida Grove, Iowa, won in the small company category.

The Coors team dramatically helped reduce the number of on-the-job accidents, resulting in a drop in injuries from 18.4 per 100 employees in 1994 to 4.48 in 1998. The plant went nearly one million work hours without work time loss due to an accident.

At NUMMI, the winning team evaluated assembly operations to determine what production processes needed to be changed to transition the plant to produce the latest Chevrolet and Toyota models. In the process, it set strict targets for improved quality, cost and safety while training all assembly personnel before production began. The results were a 50 percent increase in quality and a 79 percent improvement in safety.

A team of employees at Midwest Industries helped design, market and produce a small utility trailer that works with snowmobiles, golf carts, all terrain vehicles, and lawn and garden equipment. The team researched potential markets, sought customer input, developed design specifications and created the trailer with minimal capital investment. The result will give Midwest Industries a year-round sales potential where previous products were more seasonal.



Success: A State of Mind


According to Vijay Govindarajan, professor of International Business, Amos Tuck School of Business Administration at Dartmouth College, becoming a successful manager in a global firm in the next century is going to take a global mind-set.

"For the past decade, companies talked about �going global' but their idea of being global only meant selling a product overseas," Govindarajan says. "Companies that really want to operate globally must cultivate a global mind-set, must open themselves to cultural diversity and be prepared to adopt successful practices and good ideas wherever they are found. To this end, senior management teams should be international in composition, experience and outlook."

Govindarajan uses the following test to see if executives have an international or global mind-set. To qualify, one must be able to answer "yes" to every question. Pencils ready?

  • When you interact with others, do assign them equal value regardless of national origin?

  • Do you regard your values to be a hybrid acquired from multiple cultures, as opposed to just one culture?

  • Do you consider yourself as open to ideas from other countries and cultures as you are to ideas from your own country or culture?

  • Does finding yourself in a new cultural setting cause excitement rather than fear and anxiety?

  • When visiting or living in another culture, are you sensitive to the cultural differences without becoming a prisoner of those differences?

To exhibit a global mind-set, Govindarajan thinks an organization's management team must have two important features: a deep understanding of the world's diversity and a strong ability to integrate diverse world views. Many companies do not have managers with the necessary outlook and that is an impediment to global growth.

"It's what keeps CEOs awake at night," Govindarajan says. "While it may seem obvious that a global firm needs managers with �global brains' there are almost no programs to train managers to have these global instincts. A central task of senior management, therefore, is to identify talented managers and prepare them for global positions and future leadership. More than ever, corporate survival and prosperity depend on developing a cadre of leaders who can operate effectively in a global marketplace. A truly global company moves knowledge, not just products, from one country to another. It's the key to capturing the global opportunities that exist."

To further explore this issue, Govindarajan prepared a short questionnaire for CEOs, too. Again, any "no" answers reflect the lack of a global mind-set for the company.

  • Is your company a leader rather than a laggard in discovering and pursuing emerging market opportunities in the world?

  • Do you consider every customer, regardless of country, to be as important as a customer in your domestic market?

  • Do you draw your employees from the worldwide talent pool?

  • Do employees of every nationality have the same opportunity to move up the career ladder to the top?

  • In scanning the horizon for potential competitors, do you examine all economic regions of the world?

  • In selecting a location for any activity, do you seek to optimize the choices on an international basis?

  • Do you view the global arena as a school, a source of ideas and technologies, instead of as a market to exploit?

  • Do you perceive your company as having a universal identity and many homes rather than a national identity?

Pencils down, time to check your global mind-set scores.


Pain in the Future?


Senior executives expect their companies to be significantly hit over the next year by the global economic crisis according to a poll of top human resource executives. The survey, conducted by The Conference Board during its 1998 Human Resources Conference, covered 155 HR executives from a broad cross-section of industries. Some 43 percent of those surveyed feel the world economic crisis will have significant impact on their firms with an additional 47 percent anticipating a moderate impact. Only 10 percent say that the issue won't matter.

Companies are continuing to have problems attracting and holding critical employees. Most are also struggling to get employees and managers to understand the overall business strategy of the company. Only 7 percent of those polled express no problems with employment issues. However, only 5 percent say their employees understand the company's business strategy, and the figure for managers — 17 percent — is not much better. Worse is the figure of 66 percent who believe that their company is sometimes, rarely or never interested in bringing HR along as a major part of that strategy. And remember, this comes from HR executives. And, perhaps as a result of this line of thinking, a small number — 16 percent — would stay in human resources if they could change careers. Two percent aspire to become CEOs. The rest are interested in career changes that range from teaching to becoming chefs.


AMR Research Introduces "REPAC"


AMR Research unveiled "REPAC," a new plant systems model for analyzing the business processes of a plant, at the Strategic Manufacturing Automation Conference.

Leading manufacturers are continually striving for improvements in their core plant business processes. AMR Research compiled three years of research and defined five business processes — Ready, Execute, Process, Analyze and Coordinate — necessary to achieve improved plant performance. The REPAC model is designed to assist manufacturers selecting new software technologies to improve new product production, order execution, process control and management, plant and product performance analysis, and supply chain coordination.

The concept is an evolution of AMR Research's three-layer model and its work on The Supply-Chain Council's SCOR Model. The REPAC model highlights glaring holes in enterprise resource planning (ERP), manufacturing execution systems (MES), product data management (PDM) and controls solutions, and reflects the new requirements necessary to fit into the supply chain.

More than 350 attendees — including information technology professionals responsible for manufacturing and automation systems for Fortune 1000 companies, as well as R&D; directors from manufacturing execution system, controls and automation software vendors — attended the conference which was held in Boston.

The conference theme — "Making Your Plants a Responsive Part of Your Supply Chain" — served as a backdrop for presentations about manufacturing strategies and the use of software in automation from senior information technology professionals. Also included were panel discussions, consisting of leaders from top maintenance software and ERP vendors, which addressed maintenance strategy solutions and offered insight into the market evolution over the next five years.



Not Worth Killing for Anymore


There was a time when stories, true or not, talked about youngsters who would literally kill for a pair of sneakers. Not just any sneakers, of course, but those of the famous, well-advertised brands that became the symbol of chic. Nike, Reebok and other athletic shoe companies were the glamour brands of the footwear industry.

Some things are never forever. A researcher at Ball State University in Muncie, Ind., thinks that companies like this are on the downside and might not rebound quickly. Trendy, expensive footwear has suddenly become unfashionable for today's teens, the ones who spend an estimated $105 billion (U.S.) annually on retail products. James Lowry, a marketing professor at Ball State says, "In the last few years, Nike has done a wonderful job catering to the teen market. They signed up athletes the kids could look up to and made it extremely fashionable to wear Nike products. The trend started to change when teens moved away from Nike athletic shoes and started wearing brown leather work shoes and hiking boots. Once a trend like that starts, it is very difficult to reverse it. While Nike was popular for years, it may be years before it regains that status."

Even so, Nike remains the leader in the athletic shoe market with 45 percent of its domestic (U.S.) footwear market, worth about $9 billion (U.S.).

Teens and their parents are shying away from products endorsed by athletes who are in trouble for drug and alcohol abuse, sexual assault and driving under the influence of alcohol. Unfortunately, some of those who fall into this category have been endorsing shoes for this market.

"The shoe companies have found that many of these athletes aren't good role models for kids," Lowry explains. "They have come to realize that a person making an endorsement doesn't necessarily generate sales. Today, those athletes are not able to convince the kids to buy the products." Even so, while prices won't fall most companies will not be able to increase prices for a pair of basketball shoes which, in some cases, already sell for as much as $140 (U.S.).

Marketing to a fickle clientele can be stressful.


Browsing in Your Own Language


The World Wide Web has changed the way many people do business, learn, research and even think. One area that has been lacking, however, is the ability to converse across the Internet in the language with which you are most comfortable. E-mail can be sent in most languages although in many cases the special characters found in some language groups don't reproduce if the receiver isn't using the proper program or keyboard settings. But what of the tens of thousands of pages of information — in languages other than your own — that reside on the Web? There is a gold mine of data that can be accessed if you can only read the pages.

To the rescue is a new multilingual Internet browser that makes Web pages developed in any of more than 90 languages readable in the user's preferred tongue. The Alis Technologies' Tango Browser v3.1 now available from World Language Resources (http://www.worldlanguage.com), supports left-to-right languages such as English, French, Spanish and German as well as right-to-left read languages such as Hebrew and Arabic. It can also be used with Ideograph languages such as Chinese, Japanese and Korean.

In setting up the system, the user chooses from 19 languages for the interface. Almost 100 languages are supported, including the necessary special fonts and characters that might not otherwise be available on the user's keyboard. This is handy in electronic commerce — the browser can be used for form filling when the form is in a language other than the user's.

Users can view menus, messages and on-line help in their native language through the 19-language interface. For multinational installations, the language of preference can be changed "on the fly" so different users can function with a single Windows PC client. It also incorporates a fully functional e-mail program that allows the user to select the language of preference and then it automatically selects the keyboard and code set to match. The program provides a quick-reference pop-up keyboard that can recognize the linguistic profile of each regular correspondent and accurately displays incoming messages or automatically sends messages in the appropriate format.



Mentoring - Keeping the Movement Going


When someone decides to enter the engineering profession, they often have mixed emotions. In many ways, today's engineers devote the same efforts and time to their career development as do doctors, lawyers and investment bankers, but with fewer anticipated rewards — at least financially. This can cause some promising students to drop out of engineering and science, depriving industry of their skills. Significantly, women are all too often the ones who are lost to the engineering field.

To help prevent this, a project called MentorNet has been developed at San Jose State University (SJSU) in the heart of Silicon Valley. Started a year ago, MentorNet uses the Internet and e-mail to connect female engineering, science and math students with volunteer mentors working in scientific and technical fields throughout private industry. By using the technologies of electronic communication, the location of the mentor in relation to the student becomes irrelevant.

The project, offered nationwide, is provided through the Women in Engineering Programs & Advocate Network and is headquartered at SJSU. Start-up funding came from the Intel and AT&T; Foundations. With women comprising 46 percent of the workforce but less than 9 percent of all U.S. engineers, there is an obvious need to foster more creative ways to keep women involved in the field.

According to Carol Muller, executive director of MentorNet, "Women still face gender-specific obstacles when studying and preparing for careers in engineering and other sciences. There is solid evidence that mentoring can help address this disparity. Through e-mail and other emerging technologies, MentorNet can reach more women than would be possible with traditional mentoring."

During the pilot program this year, 204 female students studying at 15 U.S. colleges and universities were connected with both female and male mentors working in industry. Participants work at AT&T;, Intel, DuPont, IBM, Merck, Motorola, Oracle and Microsoft as well as many smaller companies. MentorNet provides web-based training materials, newsletters and support for both mentors and students. Making a good match can be difficult so counseling is available when issues of compatibility arise.

The success of MentorNet is still awaiting judgment but the early results are encouraging. More than 90 percent of the initial mentors participating indicate they would continue and 87 percent of the students would recommend the experience to others.

According to Muller, "Mentors who can't take the time involved to set up and travel to a face-to-face meeting may be able to spend 15-20 minutes a week on e-mail. It's convenient, efficient and effective. Geographic distance between mentor and student is not important."

For more information or to sign up, contact Muller at [email protected], or (408) 924-4070. The MentorNet Web site is http://www.mentornet.net.


Making Complex Systems Work Better


Researchers at Boston University received funding from the National Science Foundation to develop innovative techniques to manage complex systems such as modern manufacturing facilities, global communications networks and worldwide economic systems. The new tools, which will draw on advanced computational techniques, will also help scientists solve complex problems in physics.

Michael Caramanis, professor of manufacturing engineering and the project's principal investigator, says, "Manufacturing today necessitates decision-making in large stochastic systems — systems that include many random variables. In a manufacturing system, the complexity arises from the fact that lots of decisions have to be made involving multiple time scales. They range from decisions about building new plants and ordering new machinery — decisions that might be made once in 10 years — to the minute-by-minute decisions made on the production line."

Cellular manufacturing, introduced by the Japanese in the 1960s and widely adapted elsewhere since, is based on small factories or cells within a larger factory.

"Managing such a process effectively is extremely complex, and if you are slow in making the right decisions, you may be left with too many outdated, semi-finished products in the pipeline, driving up costs," Caramanis claims. "Making the right decisions requires an understanding of the dynamics or changing requirements of the process and the time scale of these dynamics is incredibly varied. In addition, you must factor in uncertainty — machine breakdowns, absent workers, changes in the economy."

Most businesses rely on a "worse-case analysis" approach to deal with such problems. That can be very costly.

"Our approach," explains Caramanis, "will enable accurate predictions and flexible, efficient decision support. We already have a good indication that the tools we are developing apply directly to problems in computational physics — like understanding fluid flows through a rough conduit — and we will be testing how we can apply them in other complex systems. We will also be testing the manufacturing management tools in factories of our two industrial collaborators, ALCOA and Pratt & Whitney."





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