Pelion Systems + JCIT = DemandPoint, and the road to lean efficiencies

In light of current studies coming out of Boston-based AMR Research, news of the merger of Pelion Systems with JCIT “makes a lot of sense,” says Colin Masson, an AMR director for manufacturing.

“It's clear there is a major disconnect between lean manufacturing efficiency and the demand side of the equation,” Masson says. “There's been a big focus on eliminating waste, but some people have lost sight of the fact that the reason you implement lean is responsiveness to the customer.”

Losing sight of this “makes for very brittle supply chains,” Masson adds, and he believes the Pelion/JCIT merger will address this. The merger creates a new organization: DemandPoint, a combination of Pelion's lean-architected production software and JCIT's consulting expertise surrounding Demand Flow Technology.

Tony Gorski, formerly CEO at JCIT, and now president of DemandPoint, agrees. “JCIT and Pelion come from similar DNA,” he says. “JCIT had a solution—without the software. Pelion needed the consulting. It made sense to put the two together.”

From Pelion's perspective, “We had a great platform, and some consulting—but not enough. We needed consulting to grow out the business,” says Kevin Fallon, former CEO of Pelion, and now CEO of DemandPoint. “There is small overlap in the two companies, but the integration of the businesses will be light as far as the challenges we'll face.”

Founded in 1984, JCIT has a long and rich history in the lean arena—having trained more than 100,000 practitioners at 3,500 companies worldwide in Demand Flow Technology.

Pelion was founded in 1996, gaining the benefit of Dave Gleditsch, who spearheaded numerous successful Demand Flow implementations during his tenure at JCIT.

Gleditsch joined Pelion in 2001 as CTO responsible for architecting its software platform based on flow principles. Now he heads DemandPoint's education arm as dean of its Demand Flow Institute.

“Lean is a hot topic, but has been underserved up until now,” explains AMR's Masson. “There's been a lot of emphasis on lean thinking and culture change, yet resistance to investing in software for fear that software hides bad practices.”

But that's changing, Masson asserts, adding that the new DemandPoint will face challenges, as ERP vendors are awakening to the market opportunity in lean production. This is marked by SAP's acquisition of Factory Logic, and Microsoft's recent acquisition of eBECS Ltd, a U.K.-based lean vendor. Oracle acquired access to some of JCIT's intellectual property through its acquisition of J.D. Edwards, which had made that particular investment prior to being acquired by Oracle.

While JCIT has worked in close cooperation with numerous ERP vendors prior to teaming with Pelion, “they'll have to navigate that situation effectively,” Masson says. “JCIT realizes they have to leverage their customers' existing investments, but the merger also is recognition that JCIT has to go beyond consulting by backing up its mindshare in lean with software to maintain its momentum in the market.”