While Enterprise Resource Planning is still part of the manufacturing scene, post-Y2K, significantly vendors like Intentia have restyled themselves as “e-collaboration” players. As such, says Wim Jansen, president, NW Europe, they offer total product suites, which reflect clients’ needs, ranging from ERP, CRM, supply chain management, e-business, webshops and portals, to extended planning and business intelligence.
The range of such buzzwords is mirrored by the number of players in the market and new entrants continue to arrive. Gloucester-based Stratabridge, for example, was founded last year by a team from consultancy Oliver Wight, intent on helping manufacturers bridge the gap between strategy and operations.
And engineering IT solutions provider Cadcentre has just launched a niche business consultancy, Aveva Consulting, to focus on enterprise-wide integrated solutions for the design and building of process plants. “We saw a major opportunity for growth in this market,” says Aveva president Tony Christian.
And Simon Bragg, European research director at ARC Advisory Group, which provides strategic planning and technology services to manufacturers and solution providers, says competition is hotting up. “While the ERP brigade is selling e-business and supply chain collaboration to the board, automation vendors like Honeywell and Rockwell are beginning to move into software and up the enterprise.” An ARC report on the global process automation system market published last year forecasts a sharp increase in software and services revenues as hardware revenues decline.
SSI sells ERP into the process industries, providing managed services, systems integration and best of breed systems. Says marketing manager Neville Merritt: “Through partnerships with complementary products we integrate from the shopfloor right up to intranets and supply chain collaboration.”
The latter is particularly important for customers involved in consumer goods, he says. “Lead times are incredibly short and manufacturers can’t afford to wait for an order before starting to make the goods.” With supply chain collaboration companies can share demand information all the way down the supply chain. “Tesco, for example, makes point of sale information available to its suppliers’ suppliers. The people making the plastic bags for bread will know how much is to be made even before the bakeries do.”
Such electronic collaboration can be very simple to develop and implement, he says, without involving too much change in culture. He cites a pilot private reverse auction site the firm has developed which allows suppliers to bid for orders via a bulletin board.
However, he says, some cultural changes are essential: true collaboration and sharing of information between manufacturers and suppliers involves trust and a change from the “them and us” syndrome of the past.
Merritt sees the much hyped e-marketplaces of recent months as “a great way for a major customer to get all its suppliers in one electronic communications route so it can share information with them. Suppliers feel they have to do it because the big customers say so but once they operate that way they will realise it is like EDI and part and parcel of doing business these days”.
v Graham Martin, global manager for the extended enterprise at IT services provider Atos-Origin, agrees: “Collaborative commerce is going to be a very important development area. We will see alliances of companies, operating together in the supply chain, becoming competing forces rather than individual companies.”
The complicated thing in all this, he says, is getting change in mindset and business processes. “It is a people thing. You don’t get the benefit of new technology unless you make business process change.”
Alongside supply chain management, he sees Customer Relationship Management and business intelligence as relatively untapped areas of interest for manufacturers. Atos-Origin is very active here, he says.
Consultancies Cap Gemini Ernst & Young and PA Consulting are also very busy in the manufacturing sector. For John Crampton, vice president in the products consultancy group at Cap Gemini E&Y, the manufacturing sector comprises consumer products, aerospace and defence, automotive, primary processes, like metals, energy, retail and life sciences. He says: “Many clients are looking for revenue enhancement in one form or another. That drives them for most of the time but when the economy starts to wobble as now, we see a change in the market as people start to ease up on investment.”
CGE&Y is particularly busy in a number of areas, says Crampton: “We have a lot of work in strategy – product development, new product introduction, business structure and reorganisation around core competencies and CRM.
And we are very busy in business transformation and performance improvement, particularly in mergers and acquisitions, where the acquiring company is keen to use specialist help to integrate and gain maximum benefits from the acquisition.”
Supply chain work also falls into this category, he says. “This is a big, big area for us, and ranges from the order to the delivery process, from e-procurement, the creation of trading portals and exchanges, at industry and company level, right through logistics, inventory reduction and management, outbound distribution and e-fulfilment.”
Technology consulting is a third area which has been very buoyant for the firm, says Crampton. “Things have eased up a little because the smell of a recession tends to make clients defer total restructuring for a while, opting instead for a lot of incremental work. But there is another way of looking at it. Standing on a burning platform can be a great driver for change.”
PA Consulting has yet to see any impact of a real or imagined recession, according to Jeremy Hammant, a member of PA’s management team with responsibility for recruitment into its manufacturing industry practice. “We are very busy,” he says. The manufacturing sector produces between 15% and 20% of the firm’s consultancy revenues and has increased in real terms, he adds.
“We are doing a lot of work with clients, across all industries, to help them understand the implications of e-business for their supply chains.
The whole technical thrust of e-business for its own sake has died down but organisations are looking at it as a potential IT tool, to help improve the efficiency and effectiveness of internal operations and also to facilitate the sharing of information with suppliers and customers.”
Another key area, he says, is “value mining”, helping organisations that have invested heavily in ERP systems as a response to the Y2K issue to extract some real value from them.
ERP itself attracts conflicting views. ARC’s Bragg cites a “SAP gap” as far as employment prospects are concerned. “ERP penetration rates are 70% in Europe and 50% in the UK and the US,” he says, suggesting that consultancies will need something to replace it with as the market shrinks.
Benchmark Research MD Guy Washer agrees, but says that the ERP market in the UK is still big at around a third of a total manufacturing spend of £3.05bn last year.
Atos Origin’s Martin says: “ERP is not dead. We saw a bit of a downturn in 2000 because of the huge investment up to the millennium. But now we are as busy as we were leading up to Y2K.” He says very few multinationals have implemented anything like the whole suite and many have implemented country by country and now need to rethink those ERP systems on a bigger geography.
What all commentators in the manufacturing sector, from ERP vendors to niche consultancies, agree on, however, is the need for quality recruits with industry experience. And opportunities for those with that experience abound. PA, for example, is looking to grow globally by over 1,000 consultants within the next two years, says Hammant, and is recruiting from both other consultancies and from industry. “New people are coming in all the time – and they are all people with real line management experience. Increasingly clients are looking for that sort of confidence in terms of being able to talk to people who know the theory but have also experienced the problem in real life.”
Martin agrees. “We look for people with business knowledge of our typical clients and a good grasp of IT who have the flexibility to absorb ideas and work very closely with others.”
Atos Origin is set to launch a big global recruitment campaign. “We will be looking for 5,000 more people, particularly in Asia Pacific and Europe where we are seeing growth in demand.”
He says ERP consultants are still very much in demand. “We are looking for all kinds of consultants for every aspect of SAP, for example.” And he cites significant demand growing over the last three months for business intelligence and knowledge management consultants.
Cambridge Management Consulting focuses heavily on the manufacturing sector, particularly energy, automotive and chemicals. Poonam Sharma Murray, global head of recruitment, says the firm is seeing a lot of growth and faces challenges in terms of how to grow the company. She says: “We believe as the economy starts to slow down the need for our services will become greater as our clients come under pressure to improve processes, cut costs and implement change to enable them to grow over time.”
The firm is looking for people on two levels, she says. “We want individuals with a few years’ experience who are able to engage the client, from the shopfloor to middle management, who can speak the language and are able to connect with people from different backgrounds. This means they have to understand business processes and have an industry background to give them credibility.”
The second group comprises more strategic, senior recruitment: people with 10+ years of experience who have built a business within an industry sector or have a combination of consultancy and industry experience. Says Murray: “Their specific sector knowledge enables them to engage the client at board level. Such people are often frustrated because they want to implement their recommendations.” And this is one of CMC’s differentiation points, she says. “We tend to attract people who want to work with clients, roll up their sleeves and put to use all the knowledge they have acquired. The implementation side of things is exciting and attractive for people from consultancy and from industry – they want to see the results of what they do.”
Getting potential recruits into the interview room is not as easy as it could be, however. “We have a lot of work to do to raise public awareness about the exciting projects we do – and we are competing with almost everybody who has something to offer in terms of career development.”
CGE&Y’s Crampton thinks there is a real shortage of people who can really deliver in manufacturing, both in consultancies and in their clients. “We went through a period when everyone thought that manufacturing was dead and people studying at universities focused on finance and service industries. I think this shortage is a result of that. Some people see manufacturing as a rust bowl, symbolised by the smoke stack – but that is about as accurate as the view that everyone in the UK wears a bowler hat. Most of the manufacturing businesses we work in are extremely modern facilities with not a smoke stack in sight.” And it is exciting work, he says. “I would hate to be in a country that lives off its services industry.”
Lean manufacturing gets BAE in shape
While e-supply chain is all the rage, traditional manufacturing projects are by no means dead. Cap Gemini Ernst & Young, for example, has won a “highly commended” rating in the MCA Best Management Practice Awards, for its work with shipbuilder BAE Systems Marine.
CGE&Y helped BAE, which designs and constructs nuclear submarines and warships for the Ministry of Defence and overseas defence agencies, improve efficiency,achieve cost savings and cut lead times at its Barrow-in-Furness shipyard, through lean manufacturing. And the success of the project has led to its roll-out at BAE’s other shipyards on the Clyde.
Says Laurie Stephens, CGE&Y’s executive director responsible for supply chain: “While lean manufacturing is traditionally successful in high volume production environments, such as automotive, many people thought they couldn’t be applied to shipbuilding’s one-off, make to order style of manufacturing.”
In fact, he says, overcoming cynicism was the project’s biggest challenge.
“Shipbuilding is a consultant-averse environment and that, coupled with the geographical isolation of Barrow-in-Furness, presented us with a big cultural hurdle, from the board to the shopfloor, to get people to buy in to the project.” Mick O’Connor, BAE’s integration manager for the project, agrees. For him, two factors were important: very rapid implementation and involving as many people as possible. “We didn’t lock ourselves away for six months to plan the project. That would have isolated us from the business. We went from zero to all areas using lean technologies in a 17 week period. And we talked to people from the shopfloor to the directors to ensure that they bought into what we were doing.”
From the consultancy side, says Stephens, having people on the team with experience and credibility was essential – and getting the right calibre of client people to work with them was also important. “The collaborative way we work with clients and the ability to quickly show some benefits were both factors.” He cites the refurbishment of a workshop which provided every workbench with an airline. “That made an immediate difference to guys on the shopfloor – and got them onside.”
A special edition of BAE’s internal magazine also fostered buy-in. “It featured pictures and quotes about the project, negative or positive, from the operations director down to people on the shopfloor,” says Stephens.
Last, but not least, he stresses the importance of having a client with the vision to see the potential of a radically different way and the commitment to carry it through. He concludes: “Many people said it would be a consultancy graveyard but it was a stunning success.” O’Connor agrees: “We have seen improvements in lead times, efficiency and productivity and we see massive potential for further gains through extensions within our business. We have scratched the surface, albeit deeply, but there are far, far bigger gains to be made.” ?: