Made-to-order manufacture is critical to online success

Close Brothers Corporate Finance and The Engineer conference: Manufacturing in the New Economy

E-BUSINESS has the potential to make ‘internet-speed’ manufacturing a reality for companies, delegates at a major conference on the impact of new technologies were told last week.

Bruce Henderson of Invensys said the ability of businesses to adopt ‘made-to-order’ manufacturing processes would be one of the key factors determining their success in the internet age.

Henderson, chief executive of Invensys’ software division, was speaking at the Industry in the New Economy conference, organised by Close Brothers Corporate Finance and supported by The Engineer.

Henderson told conference delegates: ‘We’re focusing onthe need of companies to be able to manufacture products ininternet time – which is a very short time indeed.’ He added that e-business will eventually remove most of the uncertainties commonly found with forecast-based systems of production planning. Instead, manufacturers will respond to real demand in real time.

Henderson said Dell, the US computer hardware manufacturer, was a good example of a business already exploiting the potential of the internet to create a made-to-order environment.

Dell builds and deliverssystems to demand, holds a low component inventory and introduces a new product every two to three months, all by linking its supply chains via the internet.

Henderson said: ‘When you look at its performance in itsmarket, Dell has grown at twice the rate of Compaq.’ He said Invensys’ belief that e-business will be central to the strategy of all successful manufacturers was behind its decision to buy Baan, the Dutch software house.

‘Made-to-order is one of the critical factors of manufacturing in the new economy, and in 10 years the companies which adopt it will be sitting on top of the pile.’