Just Jones… The trouble with IT

Posted on 7 May 2008 by The Manufacturer

Why are IT systems frequently implemented without sufficient testing, when the resulting chaos is so expensive to fix, asks Dan Jones

I have been through Terminal 5 at Heathrow three times since it opened. Although in each case the plane was late arriving or leaving, the flow of passengers through the building is impressive.
With no checked in bags it took me less than 10 minutes from standing up in the plane to driving away in my taxi, and not much more than that to get to the gate from the taxi when I left the day before. Compare this with the 20 minute walk from the furthest gate in Terminal 1, let alone the long trek to or from the gate in Amsterdam, Frankfurt or Munich airports, which shows they have got something right. When they have ironed out the bugs in the baggage system, it might be a lean experience I could look forward to.
This reminded me of another thing they got right with this building – they completed what is one of the biggest construction projects in the world on time and on budget. This is almost unheard of in the UK. I understand some of this team went on to work on the stunning renovation of St Pancras station and are now working on the Olympics. The foundations of this success were laid by Sir John Egan when he was chairman of BAA, who pioneered partnerships with his construction suppliers to define precise specifications up front, standardise where possible and speed up the flow of work to plan, make and assemble the project.
Suppliers initially complained that they could not make any money on these contracts because BAA made no changes after the contract was agreed! Sir John also chaired the Rethinking Construction task force of major repeat clients who began to adopt this new lean business model with their construction suppliers.
Terminal 5 is an impressive story. Everything arrived through one access road with up to 1,000 tightly scheduled deliveries a day and many of the components were fabricated at two on-site factories just prior to erection.
But the one thing that let everyone down – and delayed my flights – was the IT driving the baggage system. As usual, it was trumpeted as the biggest and most advanced system of its kind in the world! To me this signals an unnecessarily complicated and unproven prototype that will not be ready on time and cost twice as much to fix.
In other words, a product of the same old broken business model that prevailed in construction – bid low and over promise to get the business and then make all the money on all the changes and fixes. I see exactly the same problems with every monster SAP system in manufacturing – they caused a lot of pain to install and have left a big and expensive legacy of fixers to keep them running.
It is high time for another repeat client-led initiative to rethink the business model for selling IT. Until this happens IT will continue to be a constraint on progress rather than an enabler, in both the public and private sector. The time may well be right as some IT providers now recognise the need to industrialise, standardise and simplify their products so that they actually work on time and on budget.
Meanwhile many manufacturers are stuck with their expensive SAP systems. The question now is how to use SAP to help you go lean. Lean shifts the focus from optimising assets to streamlining the f low through value streams from suppliers to customers. As products flow through plants in hours rather than months it is no longer necessary to record progress at each step, only when they arrive and leave.
As you begin to replace batch replenishment signals with physical or electronic kanban instructions for precise quantities, you eliminate the need to frequently recalculate production and shipping instructions. As you calculate the amount of standard inventories needed to smooth orders passed upstream, you see the kaizen opportunities that come from creating stability rather than constantly changing the plan. Finally, SAP can also create real time visibility of performance right across a value stream so efforts can be focused where they will have the biggest effect on streamlining the flow.