Can 'Intuitive' And 'ERP' Words Be Associated?

Can 'Intuitive' And 'ERP' Words Be Associated?
P.J. Jakovljevic - July 18, 2002

Event Summary

Seemingly unfazed by (although certainly aware of) tough economic environment, Intuitive Manufacturing Systems (www.intuitivemfg.com ), a privately held company offering enterprise resource planning (ERP) solutions for small and mid-size manufacturers, continues to pragmatically expand its operations worldwide and to unveil significant enhancements to its latest product release.

Most recently, it released Intuitive SPC, an optional statistical process control (SPC) software module for Intuitive ERP (formerly MRP9000), Intuitive's flagship ERP system. Intuitive SPC is a real-time module that combines data collection, charting, monitoring, analysis, communication and reporting all functions accessible from a single screen. At a glance, any authorized user can then check on the exact status of any process at any workstation, department, or plant locally or around the globe.

Intuitive SPC reportedly allows the user to activate program functions with one mouse click, choose from one of five ways to input data, and close the loop with an out-of-control' warning for corrective action before operators can proceed. The module also allows the user to cut and paste graphic and table data into virtually any other Windows application. Further, sophisticated analytical capabilities of Intuitive SPC allow users to display up to three sets of control limits on charts, choose estimated or calculated sigma for control limits and process capability calculations, and generate charts from highly refined data queries.

Earlier, towards the end of 2001, Intuitive also announced the release of another optional module, a web-based Advanced Configurator aimed at streamlining the quotation and ordering of configure-to-order (CTO) products to deliver, on-the-fly, accurate pricing, product configuration and specifications, as well as bill-of-material (BOM) and process routings. The Advanced Configurator is reportedly a true "bottom-up," rules-based configurator, providing point-and-click product definition under a rule and constraint-based guidance engine. It can be executed from any Web browser and allows the user to execute product configuration concurrently or independently in either client/server or "thin web client" environments all utilizing one universal set of product configuration rules and objects. The Advanced Configurator is fully integrated with the sales, inventory, costing and quoting modules of the Intuitive ERP system.

Previously in 2001, Intuitive announced the release of iTrack, a new e-commerce enhancement aimed at increasing customer satisfaction while decreasing sales administrative costs for its customers. iTrack extends the previously available WebRemote functionality by allowing customers to log into Intuitive ERP via the Internet and track the status of their shipments and orders, view a current accounts receivable aging, and make other valuable inquiries specific to their organization.

iTrack was a part of the of the Intuitive ERP Release 5.2, released mid 2001. Version 5.2 added functionality to many areas of the product, including: e-commerce, key process indicator (KPI) tracking and reporting, international improvements, major enhancements to the planning functionality, as well as enhancements throughout the order processing and accounting areas. Other noteworthy enhancements to the product included:

• The Decision Management Tool, which tracks and analyzes KPI from throughout Intuitive ERP to generate 28 different decision points that provide such information as the net sales to inventory ratio, return on net worth, current and quick ratios, margins, and inventory turnover. It also allows the user to generate trend analysis by year, quarter, or individual fiscal period, enabling management to make better, more informed and timelier decisions.
  
  
• The Visual Order Pegging module, which utilizes the recently released Dynamic MRP module, a completely memory-resident MRP planning system which drops MRP runs from hours to seconds. The Visual Order Pegging module allows the user to trace up or down the production hierarchy (multi-level) to track the source/use relationships. It then provides the most comprehensive and user-friendly tool on the market to visualize those relationships, graphically display problems areas in the schedule, and highlight the effects of things like new orders or a late-arriving material delivery.

This is Part One of a two-part note on Intuitive. Part Two will continue the discussion of the Market Impact of Intuitive's business strategy and make User Recommendations.

Partnerships

Also in 2001, to bolster its basic front-office and sales management offering, Intuitive announced its partnership with Interact Commerce Corporation, makers of SalesLogix, the leader in mid-market and small business customer relationship management (CRM). Intuitive has entered into both Business Partner and Technology Partner agreements with Interact, and will be integrating the SalesLogix package with the Intuitive ERP product. The SalesLogix suite of products includes complete management of the sales cycle, marketing campaign management, customer support management, and eCommerce, all available anytime, anywhere, using essentially any device.

At about the same time, the company announced the expansion of its global partner channel with the signing of 12 international partners throughout 2001. International partners have been signed in the following locations: Turkey, Quebec, Saudi Arabia, Taiwan, United Kingdom, Spain, Czech Republic, Poland, Colombia, Ecuador, Peru, Singapore, Malaysia, Tijuana, and the Mexican states of Nuevo Leon and Cohuila.

The signings strengthen the existing Intuitive channel to 21 partners outside of North America. Historically, the Intuitive international channel has represented just over 20% of sales revenue, which should likely increase in the future. These new partners join an existing international channel, which includes representatives in Mexico, Brazil, Norway, France, Australia, China, Indonesia, Thailand, Philippines, and Vietnam.

Concurrently with all the above initiatives, Intuitive has pursued its Microsoft .NET initiative launch. As a member of the Microsoft Visual Studio .NET beta program, the company had been designing and testing its future Microsoft .NET architecture for more than a year. Mid 2001, it announced the completion of the prototype of Intuitive's Microsoft .NET architectural framework and its plan to convert Intuitive ERP to the .NET Framework.

The Microsoft .NET initiative represents a shift that should transform how software applications are built and deployed. Leveraging Microsoft .NET technology should make Intuitive ERP much easier to deploy and maintain, faster to enhance and will allow it to leverage the Internet in through XML Web services. Software written using the .NET Framework is inherently more robust, faster, and easier to administer. For instance, software installation should be accomplished by simply copying files. Intuitive is glad to be saying goodbye to the old problems of Component Object Model (COM)-based software that the development world has often referred to as 'Dynamic Link Library (DLL) Hell' in the past.

Market Impact

The time of the economic calamity may still mean the time of opportunity for the nimblest companies. It appears that a large number of enterprises with less than $50 million in revenues have yet to deploy an ERP package. Some of them have cited being intimidated by the complexity of ERP as deterrence to implementing one so far. Still, like their bigger counterparts, smaller enterprises also have to efficiently run and expand their operations while maintaining strict control over cash flow and inventory turns/levels.

To that end, Intuitive is one of the vendors that have long attempted to mitigate the actual and perceived barriers to ERP acceptance by smaller enterprises. The privately held firm, based in Kirkland, WA, while not a consistently well-known and visible vendor globally, seems to be determined to change that situation in the future. In a time in which many ERP vendors had to backpedal product development and expansion because of market conditions, Intuitive continued to pragmatically expand its product depth and breadth and geographic coverage, and to render itself as a more apparent ERP solution for the small and mid-sized discrete manufacturers.

Being still an ERP adolescent (it was founded only in 1994) has been both the company's curse and blessing. The curse for remaining a little relatively unknown vendor (with estimated less than dozen million in revenues), with still developing client base and the global presence; On the other hand, being later to the market, has given the company the chance to make some right choices and avoid the proverbial traps of many of its peers.

The most prominent choice was its use of only contemporary Microsoft technologies and platforms. Written in Microsoft Visual Basic for Applications, using Microsoft Access as the user interface (UI) for forms and reports, and Microsoft SQL Server as the database, Intuitive ERP has never been "corrupted" by other, now detractive legacy technologies (e.g., DOS or some proprietary database). Once other proprietary technologies are introduced into the R&D equation, a vendor has to deal with translation, interface and performance issues, not to mention the pain of migrating existing customers and/or maintaining multiple product versions. On the other hand, using technologies that are intrinsically compatible, should result in faster and less costly development.

The company's strategic relationship with Microsoft has consequently proven to be of a great importance given its market segment's infatuation with the technology, whose performance, reliability and scalability has long been improving as well. By leveraging the capabilities of the Microsoft platform only, Intuitive now seems to be also in a better position to be responsive to delivering new functional features that its customers may demand. In contrast, a smaller vendor that covers multiple platforms often spends more than a half of its R&D budget on porting issues; thus making a cross-platform solution the prerogative of only bigger vendors.

Furthermore, the early adoption of the .NET platform should help Intuitive transition from a traditional two-tier client/server architecture (where the entire business logic resides at the client front end) to the one where the business logic resides in a set of business logic components that can be used by the rich user interface (UI), alternate UIs, or it can be integrated with other systems through Microsoft BizTalk, which bolsters the systems interconnectivity and flexibility.

Appealing to the SMEs

The company has therefore put all of its efforts solely into serving small-to-medium manufacturing enterprises (SMEs) in need of enterprise application solutions that are intuitive and, consequently, easy to use and implement. The company has long demonstrated a deep understanding of this market dynamic and its requirements of competitively and scalable priced, functional products, ease of modification, short implementations, and strong service and support.

Intuitive has been offering its customers just needed (neither overwhelmingly comprehensive nor meager & insufficient) functionality they can easily digest but still deploy to its beneficial use. The modules can be implemented in a gradual fashion to tackle the most burning issues first. Also, the simplicity and flexibility of the product, bundled with the experience of the company's founders within manufacturing, often do not impose serious business process reengineering (BPR) but still produce benefits like pervasive information sharing and process efficiency.

One of the biggest Intuitive trumps is pricing that suits small cost-conscious, risk-intolerant manufacturers. As the company prides itself on fast implementations (often less than 90 days) and consequently on implementation costs being often equal or less than software license costs, it does not take a rocket scientist to calculate that most of projects' price tag of only a couple hundred thousands of dollars might be attractive even in the current era of reduced IT budgets and despite the dollar's strength abroad.

Standard Intuitive ERP functionality includes ample accounting and manufacturing features, with production and inventory planning being the core pieces. The product modules are also grouped to underline typical business cycles/processes like Plan', Buy', Make', Store', Sell', etc. Material Requirements Planning (called Dynamic MRP for several dozens times faster calculation than traditional MRP planning engines), purchasing, production and inventory control, engineering change control, sales order entry, complete accounting (including accounts payable (AP), accounts receivable (AR) and general ledger (GL)), sales analysis, and shop floor control are typical capabilities that offer general small manufacturers the opportunity to increase productivity while reducing costs throughout the organization, by performing fast and accurate closing, job costing and financial reporting.

The Intuitive product is very strong in terms of tactical level production status monitoring and work in progress (WIP) management (with, e.g., bar coding and time & attendance tracking facilities). An intuitive visual drag-and-drop scheduling functionality also provides customers the ability to reschedule the shop floor in real-time and to balance workloads. The system also allows detailed traceability and audit trails to help the company orient itself towards meeting ISO 9000 and/or QS 9000 requirements.

End users of smaller enterprises have also been impressed with the product's intuitive rich-client Windows UI, which provides ease of system navigation and of information retrieval and analysis, and with underlying workflow & email messaging/on-screen notifying system capabilities. Another attractive feature that the product offers is its native Microsoft On-Line Analytical Processing (OLAP) and business intelligence system (BIS) capability, as the company has additionally pre-filled a number of data cubes for out-of-the-box data analysis. Further, key performance indicators (KPIs) can be graphically analyzed by management for sales, purchasing, production, financial and inventory activity by Intuitive Executive Information System (EIS) module.

The Intuitive ERP system is aimed at the smaller discrete make-to-stock (MTS)/make-to-order (MTO)/assemble-to-order (ATO) and mixed-mode manufacturers with deal sizes averaging 30-users but moving toward the 40- to 50-seat range lately. These customers will have found themselves entangled into a jumble of isolated point-solutions and homegrown applications, with no easy way to bring them together quickly in a way that will produce effective business decisions. At the same time, these customers are well enamored with Microsoft's desktop software components like Excel, Project, Word, and Outlook, which have been seamlessly integrated with Intuitive ERP. Furthermore, Import Wizards have proven to quickly upload a pile of legacy data (e.g., customer records) into the Intuitive ERP database.

This concludes Part One of a two-part note on Intuitive. Part Two will continue to discuss the Market Impact of Intuitive's business strategy, the challenges it faces, the challenges it faces and make User Recommendations.