Building the Smart Enterprise

The age of the smart enterprise has arrived. It is green, information rich and performs to high standards while moving information/execution realities from weekly and daily timeframes to minutes and seconds. Smart manufacturers produce high quality, efficient products using energy/process efficient methodologies. The smart enterprise recognizes the need to reduce every type of pollution and increase resource productivity while retaining focus on mission, customers, products, and profits.

The smart enterprise redefines information gathering and processing, through the creation of neural networks, analytics, and decision support, for gaining competitive advantage. Competition is about speed, quality, adaptability, technology, product, and productivity packaged in an integrated framework including administration, customer service, production, supply chains, and decision-making. The faster the business cycle spins the more technology it needs and the more information sensitive it becomes. The information stream must retain high levels of integrity while providing actionable data in real time.

Business must pursue the smart enterprise because without intelligence all the capability in the world is a waste. Success results from the ability to react at the speed of reality to advantages in the marketplace, regardless of how slender or temporary. To leverage any event requires knowledge and positive action. This means rapidly converting data into information, interpreted as decisions, then into agile, adaptive, and predictive responses by users at all locations. None of these is possible without an accurate and timely information backbone, in the majority of enterprises this will be the ERP system.

Information and intelligence are half of the equation. The other half is flexible and adaptive production processes that can swiftly respond to threats and/or opportunities. This requires automation, real-time proficiency, and active fast-paced process improvement programs, managed by real-time information.

Mission

The smart enterprise has a focused vision and mission inclusive of resource conservation and convergence.

Due diligence

Due diligence bridges the gap between old and new capabilities. Systems projects are complex and failure has consequences. Having an intimate knowledge of the playing field (business), the game (processes), the reward, and the consequences are vital. When it comes to program selection, the old adage of "what you don't know won't hurt you" is a recipe for disappointment. Short, rapid reaction capabilities are the key to building the smart enterprise, but it comes with a price. Real time systems may be more expensive but dramatically change business adaptability. The smart enterprise always does its homework.

Speed

Business activities are an effect of the marketplace and competitive pressures, changing the strategies and information requirements. As business velocity increases, the necessity for rapid information assimilation increases comparatively. Business is under extreme pressure to perform faster while supplying a rapid succession of personalized new products. This translates into smaller run quantities with shorter demand horizons and order to cash processes. Output continues towards the theoretical goal of one to one production. Customers' experiences need to be positive, regardless of the product. In the new instant world, online reviews punish poor product or service performance.

Integration

The smart enterprise constructs an evidence-based foundation to achieve unrivaled success. To realize that purpose, the forces reshaping business and information integration need constant updating. Every business is a system, functioning within extrinsic macro-systems, and composed of complex, integrated internal structures. The search for business solutions, be it software, process improvement, or some other approach, must address these total systems relationships.

Automation

Automation has dramatically collapsed production cycle times, altering the way product is made and information is captured and used. Contemporary systems drive manufacturing machines directly from designs. Automation, including event reporting and sensors, collect data from the shop floor, warehouse, transportation, and supply chain. Real-time data capture dramatically increases the volume of data to organize, store, and process. Database systems need to be integrated, powerful, scalable, and capable of converting large data volumes into usable information. Automation speeds up both the operational and information reality.

Computing Power and Data Transmission Speeds

A smart phone has computer technology greater than America used to put a man on the moon. Computers, once too slow to support real-time transaction processing, collect and process information in a near real-time reality, tied into the global nervous system. Companies without storage capacity can purchase it at reasonable prices on the cloud. The rapid accumulation of relevant data, storage, and super-fast conversion into information is one of the keys to the smart enterprise.

E-Commerce

Consumers are increasing the volume of business conducted on the internet. Additionally, the Internet provides alternatives to traditional on-premise information processing. The emerging trend is cloud computing, where processing takes place at a remote server. Rented software, priced on usage, replaces software normally purchased and installed on-premise. Internet applications are propelling enterprises into ever-higher velocity opportunities with worldwide integration capabilities. This will enable transformation into virtual enterprises, with the option to bypass traditional plant integration.

Mobile Technology

Mobile technology has moved the information reality from the office to the world, from voice to image and text, from status to content rich streaming flows. Actionable information is real-time and social media such as Facebook or Linked-In enables global collaboration. The technology as applied to business is equally pervasive. The increased use of mobile devices for pricing, order inquiry, available to promise, placing orders, shop reporting, order picking, shipping status, and customer specific information translates into real-time information processing. Mobile technology, consuming data in enormous volumes, is one force driving information at the speed of reality. ERP databases unable to support these devices are technically obsolete.

Big Data

Businesses are capturing large volumes of real-time data from multiple sources, including enterprise, vendors, and customers. This creates a condition labeled "big data." Where the prior evolutions of technology left business searching for viable analytical data, the problem today is how to manage and convert the data into useful information products.

In today's world, the resolution of big data is critical. If you are performing due diligence for a new system, there is a high probability your organization is not processing information at the speed of reality. If this becomes a critical selection criterion, then big data is in your future.

Analytics

Enterprises have embraced the use of "business intelligence" tools. These come in a variety of sizes and shapes from simple drill down to complex analytics. The objective is to have functionality that builds information products-visualization, decision support, sales analysis, etc. in a timely and trustworthy fashion. Business intelligence (BI) and related systems such as analytics are providing positive results. Without data accuracy, however, the increased speed and use of sophisticated software are useless.

Information

Enterprise Resource Planning (ERP) is a competitive management tool. These systems are expensive to justify, prepare for, install, and use. They are the information super highways for adaptive and agile processes. ERP systems superimpose upon, and integrate the business systems as the information foundation for planning and execution. Business competes in an intelligence driven world, at both the logical and virtual level. ERP systems are tools that constantly need revision, as business races to stay parallel or ahead of the competition. Expensive systems, many installed in the last five years, are functional, yet unable to facilitate the smart enterprise.

Software converts data into information. Information systems are strategic and therefore, software belongs to management. Fast, high-volume information flows fuel the smart enterprise.

Value Management Systems

The Just-in-Time (JIT), Lean Six Sigma attitude fixated on speed, efficiency and the elimination of non-value adding activities, labeled waste. Reducing time reduces inventory requirements, improves productivity, and drives up customer service. It increases the focus on operational priorities, doing the right thing, building the right product and doing it on time.

The classical definition of productivity is "output per hour worked." The problem is the absence of an important quality inclusion, and speed equals productivity. A more comprehensive definition will factor in effectiveness. "Productivity is the use of time, technology, and resources, effectively adding value to goods and/or services." Therefore speed and quality equals productivity.

Quality and speed must not become a paradox. Doing the wrong thing faster is not productive nor does poor quality add value. Process speed should never exceed the ability to produce quality results. The speed of reality includes information and process, both done with high quality.

The result of any process improvement program is to add value to the company, its products, and customer service. For those reasons, the term "value management programs" (VMP) more accurately defines the overall objective.

Short, rapid reaction capabilities are the key to building the smart enterprise, but it comes with a price. Real time systems may be more expensive but dramatically change business adaptability. For these reasons, VMP and information technology are partners in building competitive capability. They both compress time and speed up business. Automation is the third component of speed, and needs to be part of the planned future state.

When selecting an ERP or VMP, match your information and physical reality time. Make sure the future state system will be fast enough to support needed adaptability. Speed is an order winner and like chocolate and profits, everyone wants and covets more of it.


Wayne L Staley
Affinity Systems LLC



 

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