Founder and CEO of Engineering Intent Corp. (Medfield, Massachusets).
The greatest opportunity for profitable innovation in the manufacturing sector exists in customizable, one-of-a-kind, engineered products. The demand for unique products and solutions has never been greater, and it is spreading across a wide swath of industries, from material handling to aerospace and from plant floor equipment to elevators.
Because these are not standard SKUs (stock keeping units), they require more engineering, which, when handled expeditiously, allows for a greater profit margin. Sadly, change resistance permeates the manufacturing engineering culture. Company management may take a do-it-yourself (DIY) approach to expediting technical processes, thinking they need only hire programmers and hack up a solution from scratch.
There is an unfortunate attachment to these kinds of internally created, homegrown legacy solutions. Recently a company in the playground industry and one in the curtainwall industry shared how proud they were of their homegrown solutions and the decision to ignore advanced, cost-effective and simple new engineer-to-order (ETO) manufacturing solutions.
This ego-based attachment to DIY solutions creates an overreliance on (and often, overhiring of) key internal resources capable of highly specialized programming where, in fact, none is needed if productized software is already available. It is likely that should these programmers depart, no one would be able to maintain and extend the programs.
The consequence of homegrown technology negates innovation while exposing the company to high risk. The cost of development and maintenance teams (often a dozen-plus staffers) exacerbates a hackneyed, ill-conceived business practice. The cost of new manufacturing technology innovations for customized products is sometimes less than half the price of hiring internal staff to create and maintain internal DIY technology.
Pride, or perhaps arrogance, is getting in the way of companies leveraging the solutions now available. The stubbornness comes at a high price. Instead of paying a few hundred thousand dollars to implement these proven ETO solutions, the cost of internal teams often exceeds $1 million-plus in payroll, time and loss of focus on the key activity: Make things and get them out the door.
Leveraging expertise and experience is difficult with internal custom manufacturing solutions because there are complex manufacturing, engineering and software challenges, with development times that span multiple years. Product vendors in this area can leverage the best expertise as well as provide continuity across many years of use, without dependence on one or two key personnel. Also, these laborious and lengthy technology development processes can often be halved, a direct bottom-line impact.
But the fact is that change resistance remains a self-imposed theory of constraint (ToC). Software for business process or technical procedural automation is well known only in a relatively small universe. The old build-versus-buy business argument as it relates to automation software has reached a breaking point reminiscent of the 1980s, when computer-aided design was just moving to the mainstream. In those days, many companies experimented with building their own computer-aided design (CAD) systems, and most either failed or eventually moved to off-the-shelf products.
Why? For most of them, software development was not their expertise. They were engineering firms, or job shops, or automotive suppliers, or any of hundreds of organizations whose primary work was making things. Like executives trying to fix their own plumbing, they significantly increased their risk with DIY software.
There are many ways to go off the rails with DIY. Poor architecture, poor choice of development technologies, poor personnel decisions, poor management of software development — all these and more are the alligators just off the road to success. And often overlooked is a natural human trait to focus optimistically on the positives of early success without taking into account how long it will take to move from “it’s starting to look good” to “it works perfectly in production.”
This optimistic worldview usually fails to account for quality testing. In an interview by Alex Knapp, Machiel van der Bijl, founder of Axini, a model-based software testing company, points out that 30 to 50 percent of the time to build a multicomponent software application consists of testing. “In fact, I think that it [testing] is harder than programming,” he said. This kind of investment is almost unheard of with DIY software — one reason that it has a dismal history: It goes online, then is uninstalled multiple times to recode and refit routines that did not work in real life.
The alternative, buying from a market-hardened provider, links a given company to resources with specific expertise — and to programming that has been shaped and refined by many previous customers. In a real sense, the purchasing company moves forward in the best of three worlds: It can continue to focus on its own strengths and expertise, move quickly to automate its business and technical processes, and benefit from the agility and experience baked into years of answers to diverse customer needs.