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The Road to Manufacturing Success:
Common Sense Throughput Solutions for Small Business
Foreword
As I write this, it is winter in Boston. The weather outside is dreary and cold. It is late in the evening and I am still in the office taking calls from the business press. Unfortunately, a leading software vendor is in a downward spiral and is facing its demise. Clearly, the press smells a front-page story. As I reflect between calls, I think about what a turbulent and tough industry enterprise class software development has become. As an industry it is only some thirty plus years old but has already seen numerous difficult transitions and a number companies succeed initially but ultimately fail.
During 1999, the ERP market, as it become known, suffered its first real downturn, as companies locked down their IT shops and invested their monies and time into preparation for the coming of the new millenium-the much feared Y2K problem. As it turned out, the predicted Y2K debacle turned out to be a non-event in the business world. However, while the world focused on Y2K, the Internet changed the agenda for business. As a result, the manufacturing software industry is facing still another major inflection point. Like a tornado, the Internet has set about rearranging the economy and is reinventing business models. The impact has been felt across the enterprise software industry. Among many others, even industry giants like SAP have lost their way and along with that have lost leadership and market share.
In the middle of the industry's trying times, a small software firm led by Dick Lilly continues to grow at nearly 40 % annually. Mind you, not by dint of sheer luck or good timing on Dick's part, but of stick-to-itiveness and a belief in the principles of manufacturing and not just software technology.
Common Sense Manufacturing is about two journeys. The first journey is the story of Dick's own career, which culminated in the VISUAL Manufacturing applications and his firm, Lilly Software. Second and equally important is the historical journey through the technology world and the unfolding of basic principles of manufacturing software. For those who were not a part of this time, Dick's story unfolds the changes, challenges, and market dynamics that shaped an industry that today accounts for over $100B in IT expenditures annually. I know. I was there. Not with Dick physically, but in spirit and work. During the early seventies, I was a manufacturing system designer and wrestled with many of the same problems and watched closely as competitors and inventors like Dick challenged assumptions, created new visions, and competed on a daily basis. Dick's work on the graphic user interface of VISUAL Manufacturing remains for me an icon of creativity and end user insight.
In the beginning, developing manufacturing software was as much art as science. The philosophies of manufacturing business management were only then being codified, often for the very first time. Hampered by the technological limits of early mainframe era computers, Dick had to work in this unexplored world and create some of the very structures of data and processes that continue to be incorporated in most manufacturing software even today. Dick tells the story best as he himself challenged some of his very own models and precepts as computers began to expand the horizons of the possible.
No small undertaking; the pioneering work Dick and a very small group of like thinkers did beginning in the 1960's spawned a huge and important industry, one that easily eclipsed anyone's expectations for how big it would become. And get big it did, the ERP market as it became known turned into a $20B industry for the software itself… all based on the original concepts laid down by Dick and his compatriots in those early years. Beyond that, when one considers the hardware, consulting, and other services, it explodes into a marketplace that has a total impact that exceeds $100B in sales annually. These dramatic sales figures only underscore the importance of the ERP industry. The sales occur only because, as any businessperson would tell you, there are real savings and competitive advantages in using these systems. Today, billions upon billions of dollars have been saved and countless wealth generated as a result of the very ERP systems Dick Lilly helped nurture. In fact, even the great economist and Chair of the Federal Reserve Bank, Alan Greenspan, has spoken of these technologies as key productivity drivers in the past years' exploding economy.
While continually keeping an eye on the shifts in technology, Dick has focused on the essence of business, helping people make money with their manufacturing business-especially the small enterprises that over the years have become the primary benefactors of the Lilly designs. In Dicks work there is a subtlety to the designs-one of seeing the true essence of a problem and solving it and the sticking to his guns despite the trends, power players, and pundits. Needless to say, none of this came easy. The early years of the manufacturing software industry were rife with naysayers, misguided consultants, and an uneducated manufacturing audience that was often swayed by the more compelling speakers, not necessarily the people doing the blocking and tackling in such a tough game. True to his own form, Dick Lilly remained intense, opinionated, and despite numerous setbacks, focused on moving the art of manufacturing software and ultimately the manufacturer forward. One will see in this book that Dick gives credence to the Thomas Edison's famous maxim " invention is 1% inspiration and 99% perspiration."
That Dick named his software solution VISUAL Manufacturing is not surprising. That is the brilliance of Dick's insight-he saw the needs of the small enterprise as demanding clarity and speed-a total contrast to the rest of the manufacturing application marketplace, which was competing on features and functions that resulted only in increased complexity and escalating prices for the software. Not only rich in deep manufacturing understanding, but with a user interface that was not only unique, but down right innovative. The innovation continues today, as Dick recently received a patent for an advanced scheduling capability that is arguably the underpinning philosophy of many competitive products in the supply chain software market today.
By itself, Common Sense Manufacturing would make a great history of the ERP industry. To read this book is to gain an insight to the history of the software development industry that would be near impossible without having been there-an inside glimpse to the challenges, politics, and travails that many, if not all, of the software pioneers experienced. Several of the younger analysts in the manufacturing software field in which I work-those who entered into the space at a time when the industry was in full blossom-noted that this book was an education and for some a revelation on how the industry came to its current form. This book is an important and vital document. I recommend that anyone trying to understand the dynamics of the software and computer industries look no further.
March 2000
David Caruso
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