I frequently hear about global manufacturers deciding that “now” is the time to upgrade their manufacturing execution systems to next generation, enterprise platform solution. Benefits are numerous and well documented, including performance and agility gains as well as simplified continuous process improvement. What intrigues me is the fact that as more and more companies embrace this concept, how do they make the final decision to pull the trigger? Clearly, it doesn’t take being an oracle to see that this is where the industry is going. But, even with overwhelming evidence and market acceptance from both your peers and the analyst community, how do you finally decide that “now” is the time?
I was recently reminded of this challenge when I read an article about the Gardiner Expressway in Ontario, Canada (my home country). The Expressway was built in the 1950s and runs through Toronto and out to its suburbs. For much of the way it is elevated. Extensive repairs became necessary in the early 1990s. In the 20 years since, parts of the highway have been demolished, crumbled or been repaired. Many heated discussions and potential plans have been explored and debated, but there has been no solution on how to fix it. At nearly 60 years old, the concern of an eventual collapse must certainly keep some city engineers up at night, as well as a few commuters.
I know what you’re thinking. That’s a government project. Business enterprises move faster as they face competition. But, that is not always the case.
For example, take the steel industry in the United States in the 1970s, where it fell from world leadership to bankruptcy. There were many reasons why, but certainly part of the problem was the modernization of international steel plants, especially in Japan, through significant investment in more advanced processes, systems and automation. Steel companies in the West kept limping along with legacy manufacturing plants and systems, and were soon left behind. Other examples abound. There were the minicomputer companies that couldn’t adjust to personal computers, the camera companies that didn’t adapt to the digital age, among others.
When you face a transformational change, it is often difficult to recognize the right time to embark on a “game changing” investment. That decision can be substantial and disruptive. Fundamental change is difficult, so it may seem easier to simply wait until a “better” time comes along. But, if history is any guide, waiting for change to be forced upon you may be too late. What might trigger a decision to replace a manufacturing platform? Losing a key customer? Being forced out of a strategic industry? Will the threat of growing competition be enough?
I am certainly not saying that failure to move to an enterprise manufacturing platform right away will lead to bankruptcy … but, it is hard to see how, in the long run, a global manufacturing enterprise can even survive without embracing this strategy. When faced with a decision that is “when” versus “if,” how long can you afford to wait to decide? Or, does this present a unique opportunity for you to be recognized as a visionary and lead the charge for change?