PeopleSoft re-launches into manufacturing in a big and lean way

PeopleSoft is very serious about manufacturing – including in the UK. Having completed its acquisition of JD Edwards in the summer, the firm has also now bought the demand flow manufacturing software assets of JCIT International. That news broke at the APICS conference in the US. It means that PeopleSoft has joined the few ERP software vendors explicitly able to deliver comprehensive lean manufacturing support – a club that includes QAD, eBECS, SoftBrands, SAP, Oracle, Cincom and Lilly Software. Users of the JCIT software will be able to go lean yet agile, supporting changes in production mix and volume while still reducing operational costs. Carol Ptak (past president of APICS and co-author of the book Necessary but Not Sufficient) who joined PeopleSoft 11 months ago to head up its global manufacturing, says JCIT’s technology, combined with PeopleSoft’s existing systems, will help users go lean, both in production and their supply chains. “Enterprise [formerly PeopleSoft 8] and Enterprise One [JD Edwards OneWorld Xe] already had some lean functionality, like kanban planning, line design and balancing, flow and backflushing. Adding JCIT, which is the ‘gold standard’ for demand flow, puts us right up there.” In fact, that functionality, which was in PeopleSoft 7.53, hadn’t made it into PeopleSoft 8 due to “other priorities”, which perhaps tells us something about PeopleSoft’s earlier focus – although Ptak says manufacturers were requesting it but not implementing it. Either way, she says: “Buying JCIT gives us great credibility in manufacturing.” And, buying JD Edwards already gave it credibility – particularly with the company’s approach to continuing and promoting all its combined product lines. In fact, the mere presence of Ptak, who is a senior figure in manufacturing business strategy, also speaks volumes about PeopleSoft’s industrial aspirations. “People couldn’t understand why I’d joined PeopleSoft from IBM. But I’d just completed a global study of all the players. I knew what PeopleSoft could do. When they heard we’d bought JCIT after JD Edwards, they were surprised… What did they think I was doing?” She insists that lean thinking – as opposed to good old shop floor lean manufacturing –is about to break like a wave across industry. “We’ve paddled our surfboard out there and the wave is going to come crashing in… “Lean and Theory of Constraints (ToC) are coming together… We’re working with Eli Goldratt on that too… Companies that focus internally on inventory and cost can no longer compete: manufacturers must become demand-driven to survive,” says Ptak. “With this product acquisition, PeopleSoft will deliver technology, consulting, and education that enables companies to transform themselves into demand-driven enterprises.” She adds that part of that will be the measures, the KPIs that manufacturing businesses need to adopt to go and stay lean and agile. “People change what they do when they change what they think. And they change what they think when businesses change how they’re measured. “We’ll be releasing a manufacturing scorecard this year and ‘throughput’ analytics in 2004 as part of our EPM [enterprise performance].” She mentions financial and business KPIs, and associated business process automation, with relevant measures that go all the way through companies, from the CEO, through the plant manager to cell and line operators and the departments. And with her position in the Supply Chain Council on the lean analytics special interest group, we can be confident those measures and methodologies will be useful. Says Brian Zrimsek, research director at analyst Gartner: “Lean manufacturing, enabled by technologies that integrate to supply chain applications, manufacturing applications, and the enterprise backbone, will provide manufacturing companies with strategic advantages to eliminate waste and improve margins.” Demand Flow is immediately available from PeopleSoft in limited release, with general release due in 2004. PeopleSoft and JCIT International plan to jointly market software, training and consulting services.