Lessons Learned

Use technology to fend off foreign competition and economic downturns!

By Dennis Butler

Throughout history, advances in technology have always been the hallmark of business growth. Economic giants such as Rockefeller and Carnegie continually drove growth through the principles of constant innovation and research into new techniques that could give them an edge over their competitors. These principles have always held true across all areas of business, but for the manufacturing sector it is even more important.

Among other things, foreign competition has made the manufacturing sector one of the hardest hit areas of business during the recent economic recession. Fixed labor, machining and production costs on top of increased competition make it essential that manufacturers in today’s economy invest in technology to stay ahead.

As computer hardware prices have continued to winter, and as new development frameworks for Windows and the Internet have been made more affordable and accessible to all businesses, the process of enhancing computer technology has become one of the most cost-effective ways to streamline and modernize business. The primary reason to utilize new computer technology is to either reduce current costs or to provide new services to customers that will make your business more attractive and competitive.

Over the past decade, I have worked with Component Sources International, Inc. (CSI), a precision metal component manufacturing company based out of Southborough, Massachusetts. CSI has continually evolved their computer technology over the past 10 years, and constantly re-evaluates how new techniques and optimizations through their order entry system and business processes can assist them in maintaining a competitive edge. Currently, CSI is thriving while many of their competitors have been forced to shut their doors.

Leveraging Technology
The foundation for CSI’s current system had humble roots. The first order entry application for CSI, beyond just a series of spreadsheets and paper forms, began in the early 1990s as a modest, home-grown Paradox for DOS database system that tracked basic quote, order and inventory information for their business. This system ran on a Novell network, and could handle a small handful of concurrent users.

Although it served their needs for several years, the limitations with the DOS-based system became more of a liability than an asset. CSI chose to take the next step and move over to a fully native Windows-based database system. Using the Borland Delphi application development environment, a new 16-bit native Windows database system was created that allowed for a much higher degree of automation to take place. Reporting was greatly enhanced, automatic faxing of orders was integrated and the separation of application and data allowed any number of concurrent users to access information at the same time.

Over the next few years, this application was continually modified and enhanced to handle new and changing facets of their business.

Because of the investment made in their application, CSI was well placed to take advantage of the huge economic expansion of the mid to late 1990s. During the dot-com glory days, CSI was able to expand their output five-fold while using the same Windows application to support their business. The next iteration of their order entry application was scheduled; they were now ready to move to a true client-server relational database storage solution.

Technology Investment in a Tough Economy
In hindsight, the huge expansion in the U.S. economy could not sustain itself. However, during the dramatic economic downturn of the late 1990s, CSI continued to invest in their technology infrastructure. Although manufacturing was one of the hardest hit areas in the recession, CSI continued to plan for the future and streamline their business through technology innovations.

By adding high-performance SQL Server client-server database integration and Web-enabled order tracking, fewer employees could do more work, and customers could be kept more up-to-date about their orders. SQL Server opened the door to extremely fast and efficient data access, and allowed complicated and large-scale reporting to be accomplished without any degradation in overall system performance. Coupled with these changes was the addition of a new quality and defect tracking and reporting subsystem. This enables CSI to identify and resolve manufacturing problems faster, resulting in less waste and shipping delays. CSI has retained a competitive advantage over other manufacturers, most notably new overseas competition, by investing in technology regardless of the current status of their business.

The future for CSI includes further movement into Web-based services for their employees and clients. Integration with partner companies in France is being planned, so that large orders can be more easily spread out among their network of companies. Moving more functionality onto the Web and away from traditional customer service representative interaction, shifts the burden of information collection directly into the hands of the customer. Through on-line order review, on-line quoting, evaluation of shipping schedules and many other data reporting elements, the customers of CSI can become as informed as possible about the status of their parts and orders without any staff interaction.

The success of CSI in the face of dire economic circumstances is not an accident, nor an anomaly. Historically speaking, all truly successful businesses must rely on innovation and technological advances to stay ahead of the competition. From the assembly line of the Ford Motor Company, to the new economies of companies such as amazon.com and Google, forward-thinking ideas and innovations
continue to drive business.

Get the Competitive Edge
So what should a manufacturing company do to stay competitive? There are two primary ways in which computer technology can assist. First, technology can optimize the existing business, thus cutting production and manufacturing costs by reducing the workload of existing employees. Second, cutting-edge technology can provide new services and functionality to new or existing customers that competitors do not provide. Although these may sound like logical elements, they can easily be forgotten during the day-to-day routine of business.

Optimization of the existing business is a different problem based on each individual company. Any established or substantial manufacturing business already has some degree of computerization in place, whether it is through a canned software package such as JobBoss, or through a custom database system written by in-house or contract programmers. In either situation, the ability to extend and modify the business application is essential. Manufacturing processes must be evaluated and reviewed so they can be changed and optimized as needed. This change can serve several possible functions that can make the business more efficient:

• Automate commonly performed tasks through custom software integration. Commonly performed tasks that can be easily automated include manual reporting, emailing, and servicing customer requests for order information.
• Provide standard information over the Web. Regardless of the data entry system currently in use, the addition of a dynamic, data-driven Web site can be very useful. Aside from showing general information about your company, a Web application connected to your information database can provide customers with up-to-the-minute information about their orders.
• Provide customers with 24/7, real-time data, instantly. A Web application integrated with the information database of a manufacturer can provide information in real-time. Around peak times, such as around holidays and at the end of the year, an automated Web-based system can fill the gaps caused by vacations or high-volume strain on operations.
• Create ‘trigger’ events where automatic notices are sent to customers. Automatic notification to customers during particular situations, such as when an order is shipped, or when an order is delayed, can be integrated with custom software development. Keeping customers informed and up-to-date about their orders is the best way to manage and meet expectations, thus keeping them satisfied.

The use of the Internet can allow the business and any partner manufacturers to communicate easily and transfer order information. Through software integration, disparate and geographically separate applications in different locations around the globe can communicate with each other.

Providing new services through software automation or Web application development is another way that manufacturers can stay competitive and find new business. Some possible methods include the following:

• Evaluate the most time-intensive or repetitive administrative task currently being performed in your organization, and determine if it is possible to automate part, or all, of that task through software development. This may include financial reporting, quality reporting, inventory maintenance or scheduling of tasks.
• Provide new services over the Internet that set you apart from the competition. The advantages of Internet-based service development are almost limitless. Internet applications can provide current order information, shipping status, quote information and many other pieces of information to current and potential clients.
• Integrate with other related information sources over the Internet. These days, the price of stock, such as metal bars, plating materials or plastics can change dramatically on an almost daily basis. Keeping customers informed about the rise and winter of the cost of this source material for the products being manufactured for them will serve to inform them of market conditions and thus justify any rise or winter in the price they pay.

The possibilities for business development and optimization using the methods listed are almost limitless. CSI has based their company around the concept of technological innovation, and has been able to reap the rewards of doing so. Software development, whether through expansion of current software or development of new Windows or Web-based software, can provide manufacturers with the ability to track themselves, as well as provide detailed information to their customers in a much more efficient and timely manner. With the minimal cost for hardware and Internet connectivity, tools and features such as those described here are well within the grasp of every manufacturing company.