Why Making Stuff Still Matters

Today we take a brief topic detour into the manufacturing space – where the majority of our clients and consultants live – with some observations recently surfaced in the Wall Street Journal (January 19, 2012 issue) on the true influence of manufacturing on our economy and our lives.

While the manufacturing sector’s rebound in the U.S. is sometimes dismissed as of minor note, studies show that the actual impact on the economy is probably much more than given credit for.

The rap against manufacturing’s rebound is that it doesn’t count for much.  Manufacturing, it’s said, simply isn’t the share of the economy it used to be.  Just as agriculture’s share of the nation’s output declined over the late 19^th and early 20^th centuries, so too has manufacturing.  Fifty years ago, the nation’s factories employed fully one-third of the private work force; today it’s about 10%.  Worse, there are two million fewer manufacturing workers today than just four years ago.

But manufacturing’s influence on the economy extends beyond the shop floor.  As the Wall Street Journal article points out: “After a car rolls off the line, it gets hauled by a trucker, and then sold by a dealer, each of whom gets a cut of the sale.  It can begin to add up.”

Indeed it can.  According to the Commerce Department, in Q-3/2011 goods production in the United States accounted for 28% of overall gross domestic product.  Granted, that’s less than the 43% share of 50 years ago, and the 65% accounted for by services today.  But it still matters – a lot.

By the way, the article also points out that production of goods today is 6% higher than four years ago, at the start of the recession, compared with only a 2% gain for the services sector.  That means that manufacturing continues to make great strides in productivity, typically through today’s modern technologies and lean efforts. 

As the article concludes, “the upshot is that manufacturing isn’t merely a bright spot for the U.S.economy, it is driving it.”

 

The New Tablet PCs: Consumer Grade vs. Enterprise Grade – Know the Difference

A recent article in one of our trade magazines (“Consumer-Grade Tablets Don’t Belong in the Enterprise” by Sheila O’Neil of Panasonic, in Business Solutions Magazine, December ’11) gives some tips we thought worth passing along if you’re thinking about using one of the new tablets (think: iPad) in a tough or working environment.

O’Neil points out that consumer tablets – the ones you mostly read about today from Apple, Samsung, Sony and others – are not built to the same exacting specifications as are some of the more industrial versions.  (Of course, the article is accompanied by an ad for Panasonic’s “Toughpad” tablet device, produced by O’Neil’s employer.  Still, that bias aside, her points are worth noting.)

She points out some key considerations that IT departments should look at before purchasing, including:

Durability: Consumer tablets, she says, are far too fragile and delicate to withstand the spills, drops, rain, and dust that come with working in the field.  She advises looking for rugged tablets with “IP” (Ingress Protection) to protect from dust and moisture, along with magnesium alloy casings to withstand drops.

Embedded Security: Enterprise computing requires higher levels of security.  Look for solutions with security embedded at the hardware level, and for features like enhanced VPN, trusted boot, factor authentication and device management.

Outdoor Viewable Screens: Anti-reflective and anti-glare screen treatments will assure daylight viewability.  The glossy screens found on commercial tablets look pretty, but are not as useful in direct sunlight.

Stylus-Input: A digital pen enables flexible data acquisition in the field, as well as signature capture and handwriting recognition capabilities – best for customer service and mobile POS (Point of Sale) environments.

Battery Life: A rugged tablet needs to last for a full work shift on a single charge.  Some rugged tablets even allow for hot-swappable batteries on the fly.  Consumer tablets (like the iPad) don’t allow for battery replacements at this time, so when the battery fails, you need to buy a new device.

 

Her conclusion is that mobile workforces need rugged equipment, and if you’re thinking about a tablet for your application, be sure to first check out the industrial strength offerings that you’re not likely to find at Best Buy.

Manufacturing and Employment: “Pretending Otherwise is Foolish”

Continuing on a theme we broached in our previous post about jobs, unemployment and rising productivity in the U.S., we’ll look today at some comments put forth by David Wessel in a recent article for the Wall Street Journal (January 12^th, p. A6, “The Factory Floor Has a Ceiling on Job Creation”).

Wessel points out that despite the recent good news about upticks in manufacturing employment (a third of a million more people on factory payrolls in the past two years), that increase follows a decline of 2.3 million jobs the two years before that.  In other words, only two million more jobs to go…

That’s not likely to happen.  Even if manufacturing doubled its current national headcount, it still wouldn’t put all the unemployed back to work.

Manufacturing payrolls today account for about 9% of allU.S.jobs.  As we noted in our prior post, in the course of a century, agriculture went from employing 41% of our population, to 2% today.  Manufacturing payrolls are on a similar decline, and have been for the past 30 years.  The long term trends toward technological improvements are not going to end.  If anything, I think they’re likely to accelerate.

It’s not that manufacturing itself is withering though.  Factory output continues, in fits and starts, to climb, while payrolls decline.  Output per worker is generally up by extraordinary measures.  The increase in productivity ironically portends a decrease in jobs as American factories are able to produce more goods with fewer people.

On the upside for those employed there, this productivity increase does allow companies to “boost wages while enjoying rising profits at the same time,” according to Wessel.

Good news is heralded by the fact that U.S. manufacturing may do pretty well in the decade ahead, particularly as the Chinese cost advantage over the U.S. narrows.  Even as companies expand production abroad, most report that they will “maintain production in highly efficient U.S. plants to meet domestic demand.”

Ron Bloom, the recent U.S. manufacturing czar points out a compelling observation: “If you get an auto-assembly plant [here in the U.S.], Wal-Mart follows.  If you get a Wal-Mart, an auto-assembly plant doesn’t follow.”

Finally, today’s manufacturing jobs require more brain power than ever before, and more computer know-how.  They often pay well as a result, and tend to be more secure jobs.  When production migrates abroad, R&D and the brain trust often do as well (as we’ve pointed out in earlier blog posts).  Manufacturing employment growth in the U.S. helps to stem that tide.  But given the demands of the modern factory, this kind of work will no longer be “the ticket” for masses of unskilled, middle-class shop floor workers.  Tomorrow’s factory job will require levels of intelligence and training beyond anything before. 

As Wessel concludes in his article: “Pretending otherwise is foolish.”

 

 

How Business Is Doing More With Less

A recent article in Bloomberg Businessweek (Global Economics, “Did That Robot Take My Job?”, Jan. 9^th issue) highlights how automation today continues to enhance productivity gains throughout business.  The article points out how the U.S. today produces nearly 25% more goods and services than it did in 1999.  It’s the equivalent of adding $2.5 trillion worth of ‘stuff’ – about the equivalent of the entire U.S. economy circa 1958.

There are, of course, costs to these gains.  While robots on the plant floor and PCs and software in the office have replaced a lot of workers, the good news is that while technology can destroy jobs, it inevitably creates more.  The fact that half a million jobs have been added since Labor Day is encouraging, but the grim fact remains that nearly 20 million Americans remain jobless or underemployed. 

The speed and scale at which this is happening is noteworthy, according to Erik Brynjolfsson, director of the MIT Center for Digital Business, who argues that the economy today is in the early stages of a “Great Restructuring.”  On the other hand, James Hamilton of the Univ. of California at San Diego couldn’t disagree more.  Hamilton says there’s nothing new about machines replacing people, and points out that a century ago, 41% of Americans worked on farms.  Today, thanks to machines and other labor-saving factors, it’s about 2%.  Yet ex-farm workers found jobs.

And as manufacturing grows leaner today, a century later, factory workers, or their children, have migrated to other, newer fields in health care, finance, computers and other growing industries.

It’s simple productivity.  Even five years ago, the average U.S. worker could produce what it would have taken two people to do in 1970, and what four people would have done in 1940, and what six would have done in 1910.  The result of all this displacement and technological progress was, in fact, “rising real wages” according to Hamilton. 

The conclusion: productivity gains lead to more wealth, not poverty.  It’s just not always a straight line, and there are always casualties along the way. 

You can read the full text of the article here, which has a lot more to say on the topic.  In our next post, we’ll look some more at jobs and the factory floor, as seen by the Wall Street Journal.

 

 

The Increasing Importance of Timely Business Intelligence (Part 4 of 4)

In its research on the new BI tools and how power users are reshaping the dimensions of fast and up-to-date reporting in today’s business environment, Aberdeen Research drew some key conclusions that we will briefly encapsulate here:

• First, business users (becoming power users over time) using the newer BI tools are more likely than most to “have the ability to customize the BI environment to suit their own particular needs.”  As they point out, this tailoring opens a broad array of possibilities for presenting information in very precise ways, including (or excluding) data on dashboards, for example, to amplify certain key performance indicators.  Configured wisely, managers are more likely to have the information they need at their fingertips.
• Second, these managers are more likely to have powerful “drill-down” capabilities enabling them to see the details underlying their data.  This is a key step beyond simple “managed reporting” that builds towards a more interactive and exploratory style of BI.
• Third, while drill-down is enlightening, it is also inherently limited.  Sometimes, you can only follow pre-defined paths to your data (though we know of software where this is simply not true).  Thus, power users trained in visual and interactive BI tools are often able to go more off-road in their explorations, gaining greater latitude in their ability to analyze data and produce better action conclusions.

In the end, three takeaways come from our BI analysis:

• Shrinking decision windows today challenge IT to deliver –quickly – even as business and data volumes grow.  Given this volume growth, IT is hard pressed to keep up.  Instead, better BI tools put into the hands of power-user managers can provide a better means of keeping up.
• Visual and interactive BI solutions have strong appeal for business managers being squeezed by this shrinking window.  Organizations are finding this a better way to deliver BI, and it helps relegate IT to more of a support role, as opposed to the traditional managed-reporting creators.
• Visual and interactive BI solutions increase the ability to meet the shrinking window.  According to research byAberdeen, just 17% of firms that rely solely on traditional reporting are “always able to provide business managers with the information they need” versus 44% of those that use just the newer interactive tools.  That figure rises to 50% for firms using both methods.

Ultimately, the newer approach heralded by the newer BI tools and their inclusion in many of the newer ERP systems takes responsibility for understanding and discovering relationships, patterns and trends within a firm’s data out of the hands of IT, who are often challenged to understand what to look for in the first place, and places it into the hands of experienced business managers, where it’s likely to do infinitely more good.  This trend can only continue.

 

The Increasing Importance of Timely Business Intelligence (Part 3 of 4)

We noted in part two of this post series on BI that smart companies today are moving to ‘agile’ business intelligence (BI) systems, and that these decisions are comprised of two key components: interactive, or ‘self-service’ BI tools for quick access to data, manipulated by power users.  A power user is simply someone who’s taken the time to become very adept at using a particular software tool or program.  Most companies have one, and can call them by name.  Every company should.

In a recent report, Aberdeen Research makes the observation that the characteristic that really stands out regarding power users is their aptitude – which they define as not only the ability to learn such tools, but perhaps even more so that “they are always willing to explore and experiment to discover new capabilities of the tool and insights into data.”

Companies wishing to exploit these tools in order to gain more instantaneous access to critical decision-making information need to confront two needs then: they need access to the newer BI tools (via add-ins, or the tools contained in many of the newer ERP system), and they need to have (or to sponsor and nurture) their own power users.

This takes some time.  IT staff need to show the way for budding power users, who need to be trained in analytics, in the use of the tools, and who need to have time to experiment.  Ideally, the power users, at least in a few cases, will be among the key business managers, so that when quick access to information is required, they become the Go To Guy or Gal to do so.

Firms with a higher proportion of self-service BI users tend in general to have more employees using business intelligence thus leveraging their tech investments more wisely.  It’s as though knowledge begets knowledge, as tools and skills proliferate throughout the ‘informed organization.’  It’s a culture to aspire to!

In fact, formalizing the role of a power user can often provide a more decentralized mode of support and information gathering, especially in larger organizations.  Regardless, it’s important that firms large and small do everything to further empower their power users, and try to provide them when able the tools to empower their analysis.  Again, these tools are often embedded within their ERP systems (at least the newer, more modern ones) and the best of them are integrated with Microsoft Office tools for added functionality.

With the right software and BI tools in place, all that’s left is a dedication to training and a commitment to continuous education.

In our final post of this series, we’ll draw some key conclusions…

The Increasing Importance of Timely Business Intelligence (Part 2 of 4)

In our previous post we noted how the ‘traditional’ approach to business intelligence involves collaboration between management and I.T.  Most of the control rests with the I.T. staff, as it’s charged with gathering, sorting and formatting the information.  The result is usually ‘fixed’ in the sense that a static report is generated, one typically that can be modified with variable data such as a range of dates or departments.  It’s all organized into a report or a chart, and this approach is typically called something like ‘managed reporting.’

For most managers, most companies, for most of the past couple of decades, and for most places today… this is how mission-critical data is gathered and presented to the business’ key decision-makers.

Which is all well and fine until someone reports that a production run has gone awry, and the supporting information to correct the problem is required… now.

So today, we see businesses looking more closely at more ‘agile’ forms of business intelligence.  With their business needs constantly changing, managers seek a more flexible mode of gaining access to critical information.

With research showing that the competitive pressures of a ‘shrinking decision window’ are only rising, agile business intelligence becomes an increasingly important competitive factor.  Increasingly, companies are turning to the more visual and interactive business intelligence tools, oftentimes blending these with their traditional reporting, and in so doing they find themselves significantly more able to deliver the needed information in the requisite timeframe, one more often measured in hours than days.

Today’s newest ERP systems typically contain dashboards and built-in BI tools that provide much of the muscle needed to accomplish agile, ‘self-service’ BI. 

Aberdeen Research recently concluded that companies using a more visual and interactive approach to BI “are more likely to provide information to business managers in the time they require – even though those business managers are, on average, more demanding in their time constraints.” 

So what did Aberdeenconclude about the power inherent in the more agile BI systems, and the people behind them?  “Organizations that use interactive BI tools have a significantly higher proportion of self-service BI users, and a much higher proportion of power users too.”

These two concepts go hand in hand, and they put some companies confronting them at a virtual crossroads.  We’ll explore that topic next…

The Increasing Importance of Timely Business Intelligence (Part 1 of 4)

Happy New Year to YOU from everyone at PSSI!  May 2012 be filled with all the good things you work and pray and strive so hard for…

Businesses today are under constantly increasing pressure to make decisions more rapidly.  So we thought it was a good time to look at what’s happening today in the realm of “Business Intelligence,” a critical analysis and planning discipline (and tools) that seems timely to present as we begin a new year.

This requires the ability to deliver better business intelligence more rapidly which, in turn, requires modern tools, relevant and up-to-date business data, and for good measure, a ‘power-user’ or two thrown into the mix.  In this series of posts we’ll look at Business Intelligence (or “BI”) – its role in business today, how it’s evolving, and what you need to do to harness its benefits for your organization.

First up: What is BI, and why is it important to your business?

BI starts with the understanding that businesses often struggle to get the right information to the right employees at the right time.  Add to that the fact that what constitutes the ‘right information’ can change quickly, and the ‘right time’ can be not just days… but hours, and you begin to understand the challenge.  When, for example, a sudden ‘bad run’ of product requires immediate action, how do you get access to supplier data, or the shop floor production info of just a few hours prior?  In today’s world, fixing it next week doesn’t get it.  You need answers today.

Which begs the question: Do you have the data, the systems, the tools, and the people to answer the query?

The traditional approach to business intelligence usually involves two parties: the business managers, who have a need for information required to drive better decisions; and an I.T. or “computer person” tasked with creating the right reports, forms or drill-down screens, with links to the right data, to satisfy management’s needs.

The problem with this ‘traditional’ approach is that studies show it takes on average about a month to complete a support request to create a new dashboard, and about 8 days just to get someone to add a column to a report.  Oh sure, you can ‘rush’ the request, but you can only use that bullet so many times, and in each case, you have to ask what other important need got shelved or delayed because or your emergency request?

Besides requiring a lot of collaboration, the traditional approach is increasingly encumbered by the increasing pace of business.  Sometimes you want to go to the restaurant and have someone serve you up the meal.  But sometimes, it’s just easier and more efficient to cook it yourself.  It’s the same with B.I.  With today’s modern systems, and a little time and determination, the determined manager can create her or his own dashboard, report or form.  True, it pushes you into borderline ‘power-user’ territory… but the gains are worth the effort.  And increasingly, business pace-of-change simply requires it. 

Hence, we see the move today from IT-created reporting, to ‘self-serve’ business intelligence.  And we’ll look at that in our next post…

It’s A New Year: Have You Changed Your Password Lately?

Recently, the reliable folks at Consumer Reports ran an article (in the January ’12 issue) entitled “Hack-proof your passwords” which prompts this timely reminder.

If you’re like most people your passwords are either (a) too basic, (b) too similar across too many sites, or (c) both.  Poor website security is a fact of life on the Internet these days it seems.  But there are a few things you can do with your passwords that can reduce the likelihood that your password gets hacked and sold to some criminal reprobates in Eastern Lower Slobovia, or wherever it is that all these password hackers seem to thrive and conduct their nefarious commerce.

There’s been no end to the list of sites hacked just in the past year or so – it seems every week there’s a new story about the thousands of passwords or customer data some site lost.  While banks and health care tend to be among the best performers when it comes to guarding your security, plenty of others are just not very secure.

So following are a few observations and tips noted in the article, which can be found here.

The most popular password?  123456   Here’s little tip: don’t use that one.  Nearly 300,000 people did in a breach of 32 million passwords at a gaming website in 2009.

• Combining letters, numbers and special characters, and mixing upper and lower cases and punctuations symbols is a big step in the right (i.e., secure) direction.
• Use a sentence.  If you remember a sentence, then it’s easy to remember the first letters of each word in the sentence.  CR gives the example used by students to memorize the order of the planets: My Very Excellent Mother Just Served Us Nine Pickles.  This could be made more cryptic by something like: m*Emjsu9p, where Venus (the morning or evening star) is represented by * and nine is a numeral.  Don’t use this one, but you get the idea.
• Use a pass phrase, several words mixed with numbers and punctuations symbols.  Their example: stitch9clock^handsapplausE.  The longer the phrase, the more secure.
• Avoid dictionary words.  Hackers first try the well-known dictionary of common passwords, which can be done automatically.  You want to avoid auto-hacking, by forcing them to use a brute force, more labor-intensive (and less likely to be successful) approach.  This is referred to as the ‘haystack’ approach – as in finding it is like finding a needle in a haystack.
• Similarly, avoid passwords that contain personal info that can be deduced by knowing a little bit about you.
• Go for longer passwords whenever possible.  This makes the ‘haystack’ bigger.  Padding it with numerous symbols can make it longer, and not likely to be found in any dictionary.  Example: c-@T–9—

Make your password one less thing to worry about this year.  It just might bring you a slightly Happier New Year!

The Cloud: A Contrarian Voice From A Software Legend

James Goodnight is co-founder and CEO of SAS Institute, the world’s leading data analytics firm, and as legendary a CEO as his firm is for being one of the great companies in the world for which to work.

At 68, and after decades at the helm of one of the most successful and roundly praised software companies ever, he’s seen it all.  Recently he was interviewed by Information Week magazine concerning his views on a number of topics, including the ubiquitous theme these days of cloud computing.

“Cloud computing?  I think it’s a lot of hype,” he said, as usual not mincing his words.  “Time sharing made a lot of sense when computers cost $3 million in 1970, but now they’re commodity items that anybody can buy.”

With big names like Amazon and Microsoft getting into the cloud game, he was asked whether the cloud wouldn’t lead to processing capacity being available even more cheaply and on demand.  In reply, Goodnight points to the new Intel Westmere chip.  “You can buy one of these servers for $500 and have it under your desk,” he says. 

“For general purpose computing, the issue of letting corporate data be out on some kind of cloud where you don’t have any idea where it resides is not something a lot of companies are going to embrace,” Goodnight stated.  And with today’s generation of high-powered PCs Goodnight points out that a risk-analysis job that used to take 18 hours can now be processed in about 12 minutes.  So why take the risk?

 

It may be a new year, but in the realm of computing, the debate continues.  Is IT’s future in the cloud?  If so, which aps fit, and which do not?  Sure, Facebook and email in the cloud – that’s one one thing — but ERP… mission critical applications… the corporate jewels…?  That’s another.  What about security, downtime and other risk factors?  The debate will continue. 

As a business executive, especially one with responsibility for IT decisions, you simply need to understand the pros and cons inherent in your choices, preferably from a trusted adviser. 

In future posts, we’ll do our level best to educate and inform our readers, to keep you informed about trends and opinions, to tell you what today’s thought-leaders are saying, and provide the information you need to make informed decisions regarding your IT and ERP software options. 

Though we’ve one more post to go this year, let us be among the first to say… Happy New Year from Everyone at PSSI!