Manufacturing Companies

Manufacturing Companies

DOI: 10.4018/978-1-5225-7408-8.ch006


One of the most debated areas regarding the introduction of new technologies into companies of all sizes is ERP systems implementation. These integrated software packages normally encompass the main transaction processing and information reporting requirements of a company, spanning sales order processing, financial management, human resource management, stock movement, and inventory control. It has led to a widespread debate in the literature regarding the respective merits of procuring and implementing an ERP system or deploying individual standalone software packages. The increased take-up of packaged software also coincided with the spread of business process re-engineering (BPR) to improve efficiencies and reduce overheads. The two became closely linked as BPR projects were frequently combined with the introduction of new software solutions. In this chapter, three such cases are reviewed, all involving major new packaged software implementations in manufacturing companies and all associated with varying degrees of process change.
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The development of packaged business software to support all main business processes has been a major development in information systems over the past two decades. Packaged software for most mainstream business processes came to market in the 1990s as the spread of the UNIX operating system as a de facto standard for mini computers and the increasing dominance of the Intel chipset led to a massive surge in the packaged software market. Building on the earlier MRP packages, other packaged software provided modules for sales order processing, ledgers, payroll and personnel as well as MRP, sometimes combined into one integrated package from one vendor – the ERP software suites of Oracle and SAP, for example.

Benson et al.’s (1992) “staple yourself to an order” example in the early 1990s illustrated well the potential for process improvement and introduced many practitioners to the concept of function vs. process. This was developed further in the 1990s by Michael Hammer and others (Hammer & Champy, 1993) who argued that process change was essential to business survival and acknowledged that this could be associated with new information systems. Hammer argued that there was no scientific definition of processes, but that there were three main business processes that could fit most company operations: “obtain a customer order”, “fulfill the order” and “new product development”.

These concepts were further developed by the emerging ERP software houses as they expanded the functionality of their products and started to differentiate between “process” manufacturing and “discrete” manufacturing, with different ERP products suiting their different requirements. Process manufacturers (for example, food and drink companies) would typically have short lead times, make to forecast and aim to hold minimum inventory. Discrete manufacturers (for example, the automobile companies and engineering companies) would have longer lead times, and often manufacture to fulfill specific orders. Chapter 1 provided two examples of technology transfer which centered on ERP products in contract packaging companies, these companies being akin to the process manufacturing model. In this chapter, the introduction of new systems in three manufacturing companies is discussed, two of which (at Dowty Propellers and Fixing Point) involve ERP products. Dowty Propellers, with its long lead times for specific orders for propeller blades, represents the discrete manufacturing model, whereas Fixing Point, a manufacturer of roofing and cladding components, aligns more with the process manufacturing model. In fact, Fixing Point elected to implement the same ERP product as that chosen by Brecon Pharmaceuticals in Chapter 1.

The third case study is of SKF AeroEngine Bearings, an engineering company in the aerospace sector. Whilst many such companies have deployed ERP products, the introduction of new systems and process thinking paralleled the development of the concept of full product life-cycle management for engineered products, from concept through design and engineering, to manufacturing, delivery and even product performance on client sites, spanning the new product development and order fulfilment processes identified by Hammer. This gave rise to a new set of information systems - Product Lifecycle Management (PLM) systems, which provide a framework for the monitoring and control of the product lifecycle in a particular business or product area. It is a compilation of business rules, methods, processes and guidelines as well as instructions on how to apply the rules in practice (Saaksvuori & Immonen, 2002). The PLM concept encompasses several systems. Ameri and Dutta (2005) described change management, document management, workflow management and project management as PLM systems that support concurrent engineering and streamlined product development processes. PLM seeks to fill the gap between enterprise business processes and product development processes.

The engineering industry also uses a range of other specialist (largely standalone) systems including Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), and Computer Aided Engineering (CAE) packages, which are often interfaced with ERP, MRP and data warehouse/business intelligence systems. Many of these types of systems feature in the technology transfer project at SKF AeroEngine Bearings discussed below.

Key Terms in this Chapter

Product Lifecycle Management (PLM): A systematic approach to managing the various steps in the lifecycle of a product, from its design and development to its sale and indeed its ultimate disposal. A PLM system can integrate data relating to the product, relevant human resources and business processes. It may integrate with a company-wide Enterprise Resource Planning system.

Programmable Logical Controllers (PLCs): Ruggedized shop floor computers used for industrial automation. They can be deployed in the control, monitoring and automation of specific machines or production lines. Data gathered in PLCs is often uploaded to SCADA systems.

Computer Numerical Controls (CNCs): A method for automating the control of machine tools (drills, boring tools, lathes) through software embedded in a microcomputer attached to the tool.

Computer-Aided Design (CAD) System: A software system used by engineers (and other professions) to create precision drawings or technical illustrations. The output can include both two-dimensional (2-D) drawings but also three-dimensional (3-D) models.

Supervisory Control and Data Acquisition (SCADA) Systems: Data collection and reporting systems that provide information on shop floor production and packaging processes. They are usually linked by network to monitoring devices like PLCs and other electrical controls.

Computerized Maintenance Management System (CMMS): Computer software designed to simplify maintenance management operations. It schedules, tracks and monitors maintenance activities to provide a range of reports and information on cost, component items, and personnel activities.

Business Process Re-Engineering (BPR): An approach to change management pioneered in the 1980s and 1990s that often went hand-in-hand with major information systems implementations. The tasks required to obtain a specific business outcomes were often radically redesigned, and could result in speedier response times, less manpower, and lower inventories.

Computer-Aided Engineering (CAE): The deployment of a range of computer software to aid in engineering analysis. This may include the use of computer software to simulate performance to improve product designs, and the optimization of products, processes, and manufacturing tools.

Product Data Management (PDM) System: Used to manage product data and process-related information. It may include data generated by computer-aided design (CAD) systems. A PDM system may be part of a Product Lifecycle Management (PLM) system, which has a wider range of functions.

Direct Numerical Control (DNC): A general term used in shop floor operations to mean the networking of CNC machine tools.

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