NEW SOFTWARE MAKES "DELL" BUSINESS MODEL POSSIBLE FOR ANY INDUSTRY, COMPANY
Adaptive Enterprises, "Build What They Want and They Will Come" is the Way of the Future
(Boston, MA - October 28, 2003) - Apriso Corporation unveiled here today the first commercially-available enterprise application software that provides the means for companies in virtually any industry to implement their own version of the now-famous "Dell" business model. Dell has become pre-eminent in the computer industry by rejecting the conventional wisdom of "build it and they will come" in favor of an adaptive, demand-based approach where product is not manufactured until it is ordered. Once ordered, however, it is built within hours, uniquely to each customer's specification, and shipped - often within a day or so of order.
This announcement is being made today at a conference sponsored by Forrester Research in Boston (See supplementary release "FlexNet Software Delivers Broad-based Lean Supply, Compliance, RFID Solutions" that provides a more product-oriented view of this announcement. See also today "Pechiney Capitalizes on Apriso Software for New, "Total Manufacturing" Solution").
"Companies like Dell, Toyota before it, and now Procter and Gamble and others, are representative of a profound change in the nature of business," said Dr. Hau Lee, Thoma Professor at the Graduate School of Business, Stanford University, and one of the leading experts in the world on IT and supply networks. "The competitive battles of the future will be won and lost in the supply, manufacturing and distribution networks, not in the front office, by companies that are highly adaptive and relentlessly efficient — all in real time."
According to Lee, the "Dell model" is representative of a class of strategic business initiatives that focus on the total elimination of waste, mistakes, and lead time in supply, manufacturing and distribution, by the application of demand-driven, "lean supply" principles, and near-zero defects. Such principles, along with the concept of the "adaptive enterprise," are increasingly being viewed by enterprises as prerequisites for their very survival, said Dr. Lee (see footnote, "Lean Manufacturing and the Pull Model").
Apriso recognized that such strategic initiatives depended upon companies implementing real-time, "event-driven" adaptive business processes, rather than cyclical, "plan-driven" ones. The old model, where enterprises plan their production in large batches based upon market forecasts, is increasingly becoming obsolete (See footnote, "The Rise of the Event-driven Business Model"). The problem, however, is that virtually all of the estimated $100 billion in enterprise software developed in the last few decades has been specifically focused on the old model, in effect, institutionalizing it in code. Apriso set out to correct this problem.
"Until now, the major technical barrier to re-structuring a modern enterprise away from a top-down, planning-driven model towards an event-driven, adaptive, lean-supply model has been the complete lack of off-the-shelf enterprise software to support the initiatives," said Adam Bartkowski, president and CEO of Apriso. "Classical enterprise software, such as ERP (enterprise resource planning), actually embeds, in hundreds of millions of lines of code, the increasingly archaic, forecast-based, batch-processing business model. It is essentially of little or no use for lean supply networks."
Apriso's solution, called the FlexNet 2003 Suite, remedies that problem, said Bartkowski, with a new paradigm for business software that finally makes it possible for companies to actually implement critical strategic initiatives such as lean supply, zero defects, "lots of one," or adaptive business processes. Bartkowski calls the paradigm "bottom-out." It is so named because the operational processes that make up the value chain in any enterprise are at the bottom of the organizational hierarchy. To provide a true, real-time, event-driven business model, the software must link these bottom-level processes — including people, machines, and material — in a global web where information radiates outwards from any process to any other to provide coordination, control, and business metrics whenever and wherever it is required. This is the essence of Apriso's FlexNet 2003 Suite.
FlexNet 2003 Suite — First Bottom-out Enterprise Software
The world's first bottom-out enterprise software, Apriso's new FlexNet 2003 Suite, combines a collaborative family of language-agile, process-aware supply, manufacturing and distribution management and control applications that innately "understand" over 40 manufacturing, logistics, materials handling, inventory, quality, maintenance, and other related processes. These applications are embedded in an Internet-based, real-time, global, event-based communications infrastructure that includes the latest technologies such as RFID, as well as program and machine interfaces for virtually any type of machine, tool, or legacy enterprise software application.
According to Bartkowski, FlexNet 2003 is designed to be installed at any or all steps in an enterprise's value chain, including throughout its supply and distribution networks and at any point in its manufacturing processes. Once installed, it links together people, processes, programs, material, inventory and machines in a global, real-time network capable of coordinating or monitoring any conceivable process, whether local or distributed across the globe.
FlexNet 2003 applications run in a distributed fashion, in the world's most comprehensive implementation of the so-called "Web-services" architecture, and IT or operations managers can introduce FlexNet applications in a step-by-step, bottom-out fashion as they gain experience in both the software, and in the principles of lean supply, and adaptive business processes. Moreover, the entire FlexNet 2003 Suite can be tailored to a company's specific processes in a matter of weeks, by the very people who design or use the company's operational systems.
"Apriso is one of the first companies to fully grasp the inability of classic top-down enterprise software to support the critical business needs of the 21st century institution," said Greg Gorbach, director of collaborative manufacturing research at ARC Advisory Group, a leading industry analyst and consultancy. "Businesses will live or die by their success at becoming adaptive enterprises based upon institutionalized flexibility, lean practices, and such programs as 'six-sigma' quality. However, until now, this has required extensive custom development. Apriso's bottom-out FlexNet suite marks the beginning of a new software paradigm that will be the focus of developers for the foreseeable future."
According to Bartkowski, FlexNet represents the culmination of over 11 years of software development, and the experiences gained in providing collaborative manufacturing execution software to over 140 companies and 350 installations worldwide.
About Apriso
Apriso is the pioneer of a significant, new class of enterprise software that for the first time enables corporations to define, operate, and monitor supply, production and distribution processes in real time, without limits. Using an event-driven, distributed services model, Apriso's software provides such fine-grained visibility and control of both execution processes and key performance indicators that it is an ideal platform for accomplishing the most pressing business initiatives of today: compliance, product genealogy, in-line production sequencing, real-time, RFID-based asset management, lean supply, successive refinement (kaizen), six-sigma quality levels, demand-driven supply (the "Dell" model), and the adaptive enterprise.
Apriso's software, known as FlexNet®, integrates quickly, easily and naturally into an enterprise's existing software infrastructure, and effectively extends the scope of systems such as enterprise resource planning (ERP) into the furthest reaches of the extended production and supply network, as required. But unlike these systems, that are based upon a top-down, plan-driven operations orientation, Apriso's event-driven, process-based architecture accommodates any operational model that is based upon real-time collaboration between execution processes, real-time visibility into performance, or the requirement to define, refine, or immediately control workflows throughout the enterprise, and across borders.
Apriso was founded in 1992, and now operates in 11 countries across the Americas, Europe and Asia-Pacific. World headquarters are in Long Beach, California. Apriso's rapidly-growing customer base of more than 140 customers and over 400 installations worldwide includes such high-profile, global companies as General Motors, Lear, Honeywell, Microsoft, Merck, Lockheed Martin, ITT, Baker Hughes, Halliburton, International Paper, Rubbermaid, Matsushita Avionics Systems, Saint-Gobain, Pechiney, and British American Tobacco.
The company has received a total of $20.9 million in two rounds of venture funding. Investors include Wall Street Technology Partners LP, CMEA Ventures, LogiSpring Investment Fund, SAP Ventures, and Brentwood Venture Capital.
Footnotes:
Lean Manufacturing and the "Pull" Model: Toyota was first to pioneer the so-called "lean, just-in time" supply and manufacturing system that replaced massive inventories combined with large, batch production runs with one where products or components are built or ordered only when needed further down in the manufacturing "pipeline." Dell extended this concept all the way to the end consumer, who, in essence, "pulls" product out of the system with each new order. Another high-profile enterprise, Procter and Gamble (P&G), has spent over four years on its "consumer-driven supply network", a major corporate initiative to build an adaptive supply and distribution network that is, in essence, triggered by a consumer purchase in the supermarket. In each case, demand initiates "pull" events that ripple backwards through each process, ultimately to raw material suppliers.
The Rise of the Event-driven Business Model: For most of the 20th century, enterprises have focused on attaining economies of scale, which in turn has necessitated massive, top-down planning cycles, and batch production and distribution. If a company failed to accurately predict its market — the rule rather than the exception — it was stuck with unwanted inventory that had to be discounted to sell, long lead times, out-of-stock conditions, and a generally dismal cost structure. However, because of the instantaneous nature of the Internet, and the 'global village' it has created, this model can be deadly. The slightest difference between two competitors — in terms of quality, customer responsiveness, lead time, or cost structure — gets instantly magnified in a sort of economic 'butterfly effect' and the weaker competitor can quickly fall off of the chart.
Instead, the company of the future will respond to "events," in an adaptive fashion. The goal of lean operations and supply will be accomplished by communicating events — such as the need for shampoo at Safeway to the completion of a vehicle to the failure of a subassembly during a quality test to a power failure in Malaysia to a customer order — instantaneously from any process step, to any other process step worldwide that requires the information. In addition, it will be attained with a previously unheard of agility or flexibility in systems and processes, such that any process flow can be spontaneously re-engineered by those that use it, and the supporting signaling infrastructure, based in software, will re-align itself immediately to match.
Finally, the dynamic nature of this process will permit the formation of instantaneous "coalitions" of suppliers and their customers, who will link together on demand to produce and distribute what is being demanded right now, which then "dissolve" (or more accurately "hibernate") after the demand is satisfied. "This is the essence of the adaptive enterprise," said Hau Lee.
See also today:
"FlexNet Software Delivers Broad-based Lean Supply, Compliance, RFID Solutions", October 28, 2003
"Pechiney Capitalizes on Apriso Software for New, "Total Manufacturing" Solution", October 28, 2003
All trademarks and registered trademarks are those of their respective companies. Any reference to "Dell," "Toyota" or any other company is for illustrative purposes only and does not imply endorsement of Apriso or Apriso's products by those companies.
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