What the analysts have to say

Hewlett-Packard's adaptive enterprise strategy – the methodologies, products and services – is right for manufacturers in 2004, according to the analysts. "HP is a thought leader across industry," comments Nigel Montgomery, (right) senior consultant with analyst AMR Research, "there can be no doubt that agility is key." Mike Evans, managing director of Cambashi, concurrs: "However good you are, you've got to keep getting better: HP's adaptive manufacturing is like lean thinking, but with continuous improvement and waste removal geared specifically to ensuring flexibility." Both agree with HP that IT itself – the right infrastructure, networks, applications and their management – has a critical role to play in enabling rapid change to meet fast evolving business requirements. Both also note HP's strength in terms of its ability to deliver and – with its own 60 year manufacturing heritage – specifically for industrial organisations. Says Evans: "Where HP scores is that they have applied the concepts of agility, which they recommend, to their own manufacturing business. They've got a lot of experience, best practice and systems." And Montgomery adds: "They've got immense respect – robust, reliable solutions and strong implementations with excellent ROI. They've also been around with business solutions for a lot longer than most." So far so good, but these analysts also believe the reality for most manufacturers remains some way from the HP dream. "End users are a step back from the HP vision," says Montgomery. "What manufacturers want to know is what have I got now, what's this going to do for me, and do I have to do it now? HP understands the road map manufacturers must go down, and the technology, services and people they bring are good. Now they've got to articulate that." Montgomery believes HP has under-sold itself in this respect. Which, perversely, is one of the reasons for our respect. That and what's always been engineering excellence and reliable, top-of-the-range systems. But Mike Evans adds another dimension: ingenuity – thinking outside the box. "An example is in their printers business, which is very commodity-orientated. They've got their designers designing for the supply chain because they know the key to cost reduction is making it work for distribution." His point: beyond product functionality and quality aspects, HP has focused on dimensions, weight and packaging. Another aspect is minimising enquiries and returns by making the user experience as simple as possible. Yet another is integrating product literature generation with the production system so that only appropriate language versions are packed – again cutting costs and simplifying. Successful businesses, says Evans, are all about intelligence, processes, culture, people, dynamic KPIs and embracing change – and they all depend upon integrated and inherently flexible systems to underpin them. The printers example is a good one, given the very short product lifecycles and lead time pressures on product development, manufacture, supply and distribution – the complete value chain. Both he and Montgomery agree there are lessons to be learned from this – and from the architecture of HP's own supporting IT and network infrastructure here. "That contributes to fast, accurate decision-making in one of the most geographically distributed companies selling into one of the most demanding sectors in the world," Evans points out.