John Strotbeck, president of custom team-apparel maker Boathouse Sports Ltd. (Philadelphia, PA), started investigating demand flow manufacturing in 1995. By late 1997, he had instituted flow techniques to keep work-in-process (WIP) moving smoothly and continuously, eliminating bottlenecks and the under-utilization of capacity. Just by shifting to continuous flow rather than accumulating work-in-process after each production step, Boathouse realized significant gains: delivery time dropped from about 12 weeks to 15 days, and work-in-process time dropped from 30 days down to three and a half days.
By 1999, however, Boathouse's manual flow system was overwhelmed. "Our sales volume had increased 300%. There was no way on earth to manage it manually any more," says Strotbeck. To solve the problem, he licensed flow manufacturing software from Factory Logic Software Inc. (Austin, TX), which helps him handle workflow based on daily orders of the company's highly configurable apparel.
Strotbeck's journey is becoming increasingly, although not overwhelmingly, commonplace. Flow manufacturing techniques have gained acceptance in the last few years, but until recent months, manufacturers had been far more reluctant to adopt the software to support them. "The initial theory of flow was to make shop-floor operations visible, with simple messages [kanban cards], which everyone could see," says Richard Lebovitz, chief executive officer of Factory Logic. "It was about getting away from computer systems."
In truth, though, flow is about getting away from reliance on manufacturing resource planning (MRP II) and advanced planning and scheduling (APS) systems, not about doing without software on the factory floor altogether. As mass customization and the pressure for speedy delivery have increased, and since the focus has shifted away from enterprise resource planning (ERP) investments and Y2K fixes, flow software is getting a second and somewhat more enthusiastic look. Some of its new users are implementing the software to support the flow technique in its purest, non-MRP II form. Others are newly enthusiastic about adopting a hybrid form of flow that extends the existing enterprise resource planning system, or is compatible with it. Companies adopting flow as an extension of their existing ERP-technically a contradiction in terms since APS tends to be the heart of ERP and a pure flow system would report numbers to ERP, but not be driven by ERP-are finding it advantageous to evolve to a software-supported flow system step by step.
Dixie Byers, director of materials systems for HVAC maker UPG York International (Norman, OK), says her company is taking the one-step-at-a-time approach to implementing flow software. As early as 1996, UPG York International was experimenting with kanbaning and redesigning lines for smoother workflow. Eighteen months ago, the company made a serious commitment to demand flow, investing in American Software's (Atlanta, GA) demand smoothing and kanban applications, which interface with York's Mapics ERP. "At first, we did flow with plain old manpower," says Byers. "There would be hundreds of changes a week to try to remix production to meet customer demand. We had close to a year of twelve-hour days." The software implementation has eased the pressure and, Byers notes, every step has brought benefits.
Enterprise resource planning vendor American Software, which offers its flow module for $30,000 to $250,000, has seen an explosion of demand for its software offerings. The company has about 16 users for a product that has been available in some form since 1993, but just signed four more in the last couple of months. "Manufacturers implemented flow techniques thinking they didn't need software," says Mike Cuellar, product director for flow manufacturing systems at American Software. "All of a sudden, flow software is going gangbusters."
Twenty users doesn't sound like a deluge to everybody, though. Brian Zrimsek, research director for enterprise and supply chain management at GartnerGroup, is not so convinced that the flow software market is growing rapidly. "Because flow manufacturing is making a comeback, people are writing software to support flow. That doesn't mean manufacturers are buying software in order to change to flow methods," he says.
PeopleSoft Inc. (Pleasanton, CA) still has fewer than 20 customers for its PeopleSoft Flow Production System, an add-on to its enterprise resource planning system. James McQuade, director of manufacturing product strategy, is disappointed with the results so far, but argues that a growing number of companies are seeing the benefits of even dipping their toes into flow. "Flow makes clear where the bottlenecks are, and helps you attack lead time and reduce the cost of inventory," he says. "You can implement facets of flow without a lot of software and enjoy the benefits, but eventually you reach a plateau that you have to get past."
Using flow from an enterprise resource planning vendor is a hybrid vision, and that's exactly what Dan Rich, chief information officer of VisionTek Inc. (Superior, CO), a computer component maker, has in mind. His company has readily adopted PeopleSoft's flow application for kanbaning common low-cost components that come on reels. "This eliminates all the counting and handling. We set kanban quantities to equal reel size, so that we're replenishing reels instead of tiny components," says Rich.
For the high-value components, however, VisionTek is sticking to its advanced planning system, even though it's totally antithetical to the flow ideal. "They've got longer lead times, and we need to manage exact usage with close control," says Rich.
Enterprise resource planning vendors Oracle Corp. (Redwood Shores, CA) and J.D. Edwards & Co. (Denver, CO) are also in the flow application game. Oracle does not track customers that use the flow aspect of its manufacturing suite. But J.D. Edwards has more than 25 customers drawing on various flow abilities within its manufacturing applications. "Companies that want to do flow piece by piece have the freedom to choose how fast and to what extent they want to go," points out Joel Reed, director of vertical industry marketing. "Companies are coming back to their ERP suppliers and saying, 'flow is great, but it's not the only thing I do.' "
CellFusion Inc. (Burlingame, CA) is a flow player that is in the process of developing a formal complementary software partnership relationship with SAP. The independent company is just emerging from a nine-month pilot phase with two customers, an automotive original equipment manufacturer (OEM) and a semiconductor equipment manufacturer. CellFusion's chief executive officer Kersten Ellerbrock reports that the automotive manufacturer saw a return on its investment in flow software in just two weeks, simply from savings in daily operations. Late-arriving containers with critical material previously would stop the 2,000-car-per-day production line. The CellFusion application now allows the company to anticipate cost-intensive situations and schedule airfreight early.
Even as ERP vendors add flow modules to their offerings, don't discount the pioneers of pure flow software products. John Costanza, often called the father of flow manufacturing, readily concurs that flow software initially failed to take off, but that it's starting to do so now. He is hoping that The John Costanza Institute of Technology (JCIT, Boulder, CO), which has already trained thousands of manufacturers in flow techniques, will be a beneficiary of a renewed interest in flow software. DFT Systems Inc. (Boulder, CO), a spin-off of JCIT, which developed a complete enterprise flow software application under the beta name of Falcon, just unveiled the final version as Falcon V.
The new flow application completely dispenses with any MRP II/APS-based enterprise resource planning systems and becomes the manufacturer's enterprise system. "There's a huge demand for flow," says Costanza. "In the past, you'd have to develop your own or use a hybrid out of necessity."
Now, companies will have a broader range of choices that matches their new willingness to give flow software a try.