Made2Manage Systems 'One Year After': Reenergized and Growing Part Two: Future Direction

Future Direction

Made2Manage Systems Inc., a former public provider of broad enterprise business systems for small and mid-size discrete manufacturers, decided over a year ago to go private under wealthy Battery Ventures. The vendor has produced tangible benefits for existing customers (e.g., the vendor's stability and sensible delivery of product functionality with increased product quality). While the company's target market remains small and mid-size discrete manufacturers, that sweet spot has first been refined and then expanded in part by recent prudent acquisitions.

To refresh our memory, what looked like an honorable exit strategy from the public eye happened in early June 2003, when Made2Manage Systems announced it would be acquired by Battery Ventures, one of the leading venture capital firms focused on technology investments, which manages nearly $2 billion (USD) in committed capital and has a twenty-year history in successfully making investments in software companies (see Examples Of How Some Mid-Market Vendors Might Remain Within The Future Three (Dozen)?).

Made2Manage Systems focused on enriching the software ownership experience for its customers—to the point where they even volunteer to influence prospective buyers. Small and mid-size manufacturing companies across the US and Canada reportedly continue to join the Made2Manage Systems family of customers based on the vendor's ability to better cater to the specific needs of manufacturing operations within specific vertical industries and deliver sound professional services. As a result of setting this strategy in motion, Made2Manage Systems has since seen virtually unprecedented performance.

Another major customer-driven product release is expected around early 2006, given that admittedly Made2Manage Systems has slowed things down to ensure building increased quality into the product and refine its product (and services) management and development processes to allow customer input at every phase.

Further, having achieved the first major objective of profitability, Made2Manage Systems' next logical focus has been on growth, both organically and through acquisitions. The vendor is proactively targeting small to mid-size enterprise resource planning (SME ERP) companies with far less than $100 million (USD) in revenues, that are for sale, and that can be seemingly integrated into its organization and business model. The intent is to conduct between one and three like acquisitions per year.

To that end, most recently, in September, Made2Manage Systems announced the close of its acquisition of certain assets of ADS Software LLC and ADS Information Systems, Inc. (ADS), its former value-added reseller (VAR). Under the terms of the agreement, Made2Manage Systems acquired the intellectual property rights to Made2Manage-centric products formerly owned by ADS, which were designed to augment and extend the Made2Manage Enterprise Business System. Specific ADS-branded products include Interactive Form Editor (IFE), IFE Plus!, Enhance!, Enhance!Plus, and General Ledger Detail Audit (GLDA).

Made2Manage Systems has taken the time to analyze its customers, and it has discovered in the process that customers working with resellers and services providers were not as happy as the customers working directly with the vendor. Consequently, the above acquisition is merely execution on the vendor's strategy to become more intimate with its customers in order to ensure they are getting what they need to improve their businesses. This idea of customer intimacy is another way how Made2Manage Systems intends to differentiate itself from its peers.

Therefore, a more significant acquisition took place in August, when Made2Manage Systems expanded both its domain expertise within the plastics industry and breadth of solution offerings for its plastics processing customers by acquiring virtually all assets from DTR Software International, which has been a privately held provider of manufacturing, distribution, and financial management software designed for the industry-specific needs of plastics processors. Made2Manage Systems hopes to now have a nearly 2,000-strong customer base through DTR's 175 customers at about 600 sites.

This is Part Two of a five-part note.

Part One presented the event summary.

Part Three will discuss the market impact.

Part Four will present quality management processes.

Part Five will detail challenges and make user recommendations.

DTR Acquisition

DTR was founded in 1981, and it had an estimated $4.4 million (USD) in revenues in 2003. Its signature product, currently called The Manufacturing Manager (TMM), a comprehensive manufacturing, distribution, and financial management software system, will supposedly be re-branded as a Made2Manage Systems product in the future, but both will be maintained and enhanced as a separate version of the Made2Manage Enterprise Business System, given TMM's use of the Progress platform. The two products will be made available separately to both current and prospective Made2Manage customers across the plastics processing industry. Still, although the products are to be maintained and enhanced on separate tracks in the long term, some efforts might be made to create synergies that can enhance both products down the track.

Made2Manage Systems also thereby pledged to look to support and enhance both product lines based on customers' needs rather than requiring existing DTR customers to migrate to a single Made2Manage product, as the vendor's long-term product strategy is to continue building and acquiring product and service capabilities that meet the unique market specifications of key manufacturing industries without disrupting the businesses of the existing customers. Under the terms of the agreement, DTR has been operationally folded into Made2Manage Systems and many former employees of DTR have joined the organization. The increased resources across research and development (R&D), services and support (S&S), sales and marketing (S&M), and finance and administration should help Made2Manage Systems continue to meet the needs of former DTR customers (reportedly most of them with a high level of customer satisfaction), as well as positively impact existing Made2Manage customers in the plastics industry, who should also benefit from ongoing solution enhancements that could be applied to both TMM and the Made2Manage Enterprise Business System.

Further, these new Made2Manage Systems customers will have access to hotline support and first-time 24/7 on-line support via Made2Manage Systems' customer web portal, M2M Expert. In the near future, Made2Manage Systems will reportedly focus on enhancing M2M Expert's customer resource center, which features case management, change request management, a self-help knowledgebase, downloads, and more, to accommodate its newest customers. In addition, former DTR customers will be able to take advantage of Made2Manage Systems' professional services offerings, including customizations, consulting, and on-line education and training. DTR's former headquarters in Jacksonville, FL, has meanwhile become a new Made2Manage Systems office location, while Made2Manage Systems' existing executive team members have remained in their current leadership roles.

Prior to the acquisition, DTR had been supplying management software specifically for the plastics industry for more than twenty years, with an ongoing development strategy that the product has constantly been enhanced to cater to inevitable changes in the industry, new advances in technology, and emerging markets. The vendor had a Customer for Life' policy that meant that all users would automatically be sent new releases of the software on a regular basis, thereby, like its new parent, trying to protecting the customers' initial investment and ensuring that they continue to use the very latest in plastics specific software.

Version 9 of The Manufacturing Manager

Not long before being acquired, DTR introduced Version 9 of The Manufacturing Manager (TMM v.9) to deliver improved inventory management, information analysis, and operational efficiencies for business management requirements of plastics processors. The product features a wireless personal digital assistant (PDA) technology to deliver improved inventory management by incorporating lightweight, impact-resistant PDA technology for warehouse management. Integrating PDA software should help improve shipping accuracy and inventory movement, while it is a cost-effective alternative to traditional radio frequency (RF) devices. Further, with the use of bar coding, TMM v.9 wireless PDA software and devices should make shop floor production input even simpler, thereby reducing labor costs. Users should gain more complete control over what enters and leaves the plant by implementing PDA technology for picking, shipping, and receiving materials, whereas bar codes can be created on work orders and user-defined product labels can be utilized.

The introduction of wireless PDA technology further enhances TMM v.9's already powerful inventory control module, which ties multiple units of measure (UOM) to each inventory item, which are available at purchasing and sales order entry, while the software automatically calculates conversion quantities and relieves inventory in the base UOM. TMM v.9 provides entire control—as well as instant information through queries and standard reports—of raw materials (including blends), assembled work in process (WIP), finished goods, and other items to ensure optimal reorder points. TMM v.9 also offers multilevel pricing and maintains fixed and variable standards, averages, and last costs of all inventoried items, whereby users can also employ several options for the period-end inventory closeout process to match the way individual processors conduct business.

TMM-CRM

The product release has also introduced a fairly comprehensive customer relationship management (CRM) tool, TMM-CRM, that aims at providing plastics processors with seamless management of business intelligence (BI) to ensure successful data sharing throughout the entire organization, from the shop floor to customer service. It was developed by Made2Manage Systems as a tightly integrated complement to its ERP counterpart TMM v.9, with the idea to enable plastic processors to maximize customer relationships by streamlining interdepartmental information flow through the organization with the integration of every area of business that touches the customer, such as production, marketing, sales, customer service, and field support. TMM-CRM offers the following features to plastics processors:

• order management with virtually real-time access to manufacturing status
  
  
• easy access to a customer's near real-time payment and credit information
  
  
• easy access to historical sales information for marketing analysis and up-sell opportunities
  
  
• available-to-promise (ATP) dates at sales order times

In turn, users should be able to realize many benefits from TMM-CRM, such as improved customer response time, reduced miscommunication within the organization, elimination of duplicate data entry of customer information, and consistent, coordinated management of prospects and customers by all members of the organization. Made2Manage Systems touts that TMM-CRM should not only help improve customer service, but also reduce service costs, as the module gathers and continuously updates knowledge about customer needs, motivation, and behavior. It measures both input across all operational functions and output in terms of customer revenue, profit, and value. TMM-CRM also allows processors to continually flex the balance between marketing, sales, and service inputs against changing customer needs to maximize profits.

Quotation Support

As possibly the best example that generic ERP software systems fail to account for the unique issues facing plastics processors at the quotation stage, "The Bag and Film Quoter" feature in TMM by Made2Manage Systems recognizes that each processing type within the wider plastics arena has its own specific functionality requirements. The feature was designed specifically for companies requiring a detailed quotation tool that can accurately combine the processing costs of blown extrusion, slitting, printing, and other associated operations with the various ratios of raw material blends and bag dimensions.

To that end, "The Bag and Film Quoter" takes into account the material density and bag dimensions including headers, lip, gusset and trim, etc., together with any reinforcements or artwork required, whereby a detailed cost per bag, roll, or weight unit is calculated. The system automatically applies three predefined margins to the quantity breaks selected (again based on bag, roll, or weight) to create a detailed pricing matrix. Selected values can then be automatically pulled into a user-definable quote template and virtually instantly e-mailed, faxed, or printed.

Since the feature is a fully integrated component of TMM v.9, sales orders can be created from within the quotation page, and customer information updated, without the need for any duplication of data entry. Incidentally, TMM v.9 allows users to go directly from a quote to the BOM, and users can develop unlimited quotes for each customer (and extensive what-if quoting scenarios) and produce customizable quote letters and reports.

Additionally, production scheduling in TMM v.9 allows plastic processors to access information on all jobs at all levels on a single screen. Users can perform tasks with almost instant response drag-and-drop scheduling and right away view late jobs, other workstations, and available tools. Forward finite, queued, and just-in-time (JIT) scheduling is provided for all workstations and secondary operations, while through the product's material requirements planning (MRP) functionality, processors can project the requirements for all materials based on scheduled production, sales orders, and back orders, and thereby reduce the cost of inventory while ensuring critical materials are in stock.

INSIGHT

Also new in TMM v.9 is INSIGHT, a BI tool that allows executives and management to immediately identify bottlenecks in the supply chain before they affect business. The tool might also help them improve operational efficiencies, identify opportunities for inventory reduction, and bring all shop floor operations into focus. INSIGHT is a module designed specifically for executive management personnel who may or may not be hands-on users of the core TMM v.9 system. Without any knowledge of the underlying file structure, or even a working knowledge of TMM v.9 itself, they should be able to quickly see in graphical or summary report format a range of performance indicators from across their business operations. Thus, executives are now no longer dependent upon staff to present to them key information about company operations.

For example, one analysis presents the following nine important key performance indicators as to the status of the company on one screen simultaneously:

1. Total value of products shipped yesterday
2. Total value of all open orders
3. Month-to-date sales orders
4. Percentage of on time and complete deliveries
5. Yesterday's manufacturing efficiency percentage
6. Yesterday's non-run hours
7. Yesterday's scrap percentage
8. Yesterday's sales orders
9. Average days of past due receivables

Also included within the INSIGHT module is a flash report that shows on one page the up-to-the-minute financial position of the company including cash position, sales orders, inventory valuation, purchase liabilities, and production valuation. The graphical report writing capabilities within TMM v.9 have always allowed for an in-depth data analysis of any fields within the core system, since the product allows users to run queries to quickly access filtered data that can be analyzed on screen, whereas drill-down features allow access to further explanation. However, for the executive who is not a user of the core TMM v.9 system, INSIGHT now provides a number of summary reports and graphs for financial, manufacturing, vendor performance, and sales performance. If the summary information warrants further examination, simply by clicking on the relevant graph, the user can drill down to the required level of detail.

TMM Version 9.2 (v9.2) is currently in the beta process and slated for general availability by early 2005. Once it is released, Made2Manage Systems will follow its new product management process to apply ongoing updates and enhancements to TMM. The version will include significant enhancements to the TMM core product, including improvements in CRM and output options. Key features to look forward to in TMM v9.2 would include:

• Language LocalizerThis component will help TMM users build more reliable communication into each stage of the manufacturing process, regardless of language barriers. As a standard tool within TMM v.9.2, Language Localizer will enable users to translate labels, messages, menus, and other essential text elements within the application.
  
  
• Master SchedulerTMM v9.2's advanced planning and scheduling (APS) tool will build upon the American Production and Inventory Control Society (APICS) framework to provide increased flexibility and control. Included within Master Scheduler will be the capable-to-promise (CTP) functionality.
  
  
• PinPoint BrowsersBeginning with a feature-rich browser as a foundation, PinPoint Browsers will include fairly easy-to-use filters to select, sort and manipulate data, whereby users will have the capabilities of a query and reporting tool from the familiar location of a browser.
  
  
• Advanced Communication ToolsThese new features within TMM v.9.2 will enable easier and more complete communication and information sharing throughout the plant and front-office. Users will have the following three ways to communicate:
  
  
  1. NotePower: Notes can be attached to individual data records to be displayed within TMM according to a prescribed set of rules.
     
     
  2. Comprehensive Alerts: To send messages to employees not active within TMM, rules can trigger messages sent by e-mail to an individual or a distribution list.
     
     
  3. Instant Messaging: TMM users may send instant messages to other users.
     
     
• Quote Managernew to TMM v9.2, the module will enhance quote management and win/loss analysis functionality. In addition, it will simplify the quoting of products, both new and currently in production, and allow users to go directly from a quote to a live BOM.
  
  
• AccountingEnhancements to accounting functionality within TMM will allow users to view past accounting years, direct deposits, and the Kronos keeper interface. Users will also be able to cross reference accounts within the general ledger.
  
  
• Electronic Data Interchange (EDI) Through partnerships with Innovis and Arrow Products, TMM users will have the ability to automate communication and file exchange with their supply chain partners via EDI.

This concludes Part Two of a five-part note.

Part One presented the event summary.

Part Three will discuss the market impact.

Part Four will present quality management processes.

Part Five will detail challenges and make user recommendations.