Strange days
Kevin Parker, editorial director -- Manufacturing Business Technology, 1/1/2003 12:00:00 AM
As we enter 2003, many of us are still adjusting to our new surroundings. If economic stagnation continues the rest of the year, it would be the longest such period since World War II. Even then, it seems only yesterday managing change was all about growth, not retrenchment.
Setting realistic expectations is only more difficult in the high-tech market. While 2002 overall economic growth is thought to have been about 3 percent, high-tech—which drove so much of the boom—remains flat.
One challenge high-tech markets face is worldwide overcapacity in many industries. Yet in manufacturing, some say there is pent-up demand—especially from medium-size companies—for technology solutions. In this scenario, if Congress passes legislation with incentives for corporations to invest in equipment and software, all could be well.
As we drill down, though, other questions pertain to enterprise and supply chain business applications. We've seen consolidation among mid-size enterprise system vendors. Y2K kept vendors in business that would have faded sooner otherwise. There still are hundreds of enterprise vendors worldwide, and at least 40 with revenues of more than $15 million. They say enterprise vendors never die, they just turn into service organizations. But you can expect consolidation to continue.
Microsoft and its Business Solutions unit see small- and mid-size business solutions as a $10-billion opportunity. The stock market knows of Microsoft's ambitions, and with enterprise vendors' stock prices thereby depressed, their room to maneuver is restricted. This despite the fact that small-business functionality is one thing, and manufacturing another.
Further, with near-collapse at i2 Technologies and continuing problems at Manugistics, who's surprised if users question the viability of supply chain planning? This is truly a shame, as advanced planning & scheduling technology has proved itself capable of making manufacturers more efficient. What's needed now is some consensus as to the right balance between supply chain planning and real-time supply chain execution.
Then there are "collaborative" applications born of Internet technologies. Forging electronic ties with business partners has proved tougher than anticipated. For one, companies need to get their own house in order before they begin sharing, information-wise. Thus, some still say it's only a matter of time before trade exchanges come into wide use.
Meanwhile, Southfield, Mich.-based Covisint—the B2B supplier exchange formed by General Motors, Ford Motor, and DaimlerChrysler AG—has cut one-third of its jobs and moved to smaller offices.
While already a cliché, comparisons to previous technology advances, where it took time for productivity gains to reveal themselves, are valid. We know these solutions make people more productive. Our own work lives demonstrate that. What we need to do now is keep our nose to the grindstone.
