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The New EA Paradigm 4: Provide-from-Stock
Initially, the customer is willing to accept these limitations... they don’t know any better. But, over long periods of time, 50 or a hundred years, they get frustrated and the drive the manufacturer out of a Job Shop into a Standard Production Environment (mass production) in order to solve the problems. Actually, the problem is the strategy. As long as the strategy is make-to-order... those are the problems. If you want to solve those problems, you have to change the strategy. Provide-from-Stock. Manufacture standard products to inventory before you ever get an order and then when you get an order, deliver the standard product off the shelf. That will fix some of, but not all of, the problems.
Lead time - goes to zero. You deliver the product off the shelf.
Per unit product cost - way down. You spread the engineering, manufacturing engineering, production costs over many products.
Reliability/availability - way up. You reuse the same parts on all the standard products.
Maintenance costs - way down. You can make a profit on the spare parts. In fact, spare parts can be manufactured by Other Equipment Manufacturers (OEM’s). Generic spare parts - low maintenance costs.
You know the one I left out?... Product flexibility. “You can have any color you want as long as its black”. (Henry Ford) The customer takes the standard product. They change the use of the product to fit the product. You buy a Buick off of the shelf... and you want to haul chickens in it. Well... you haul them in the trunk. What you don’t do is, you don’t reverse engineer the Buick into parts and then re-engineer it into a Toyota pick up truck! That will take longer and cost more. You would be better off going to a job shop and getting them to custom build a pick-up truck for you than to reverse engineer a standard product into parts and re-engineer them into a different product!
Changing the strategy from Make-to-Order to Provide-from-Stock fixes a lot of the problems... not all but a lot, BUT, it is a different kind of business. Now you have to have a capital investment in plant, raw material, machine tools, people, operating money... you have to have product forecasting because you don’t want to manufacture finished goods that the market won’t buy. You have to have material management because you have a large investment in in-process inventory and finished goods inventory. You have to have production scheduling, quality management, marketing, distribution, product support, and a bunch of other things... BUT, you stay in business.
You have probably already figured out the Data Processing parallel to provide-from-stock... Commercial Off the Shelf Software - COTS. Management says, “why are we building these applications?? Buy them! We get immediate delivery, low per unit product cost, high reliability, low maintenance cost... Buy them... don’t build them!
But, remember... you take the standard product off the shelf. “You can have any color you want as long as it’s black.” You change the use of the product to fit the product... that is, you change the Enterprise to fit the package... don’t start changing the package to fit the Enterprise... if you start changing the package to fit the Enterprise, all the reasons you bought the package will evaporate in about 13 milliseconds! To reverse engineer the package into data elements and instructions and re-engineer it into a different package... it would take longer and cost more. You would be better off to go to your old Data Processing shop and get them to build you a custom application than to take a standard (COTS) application of the shelf and change it into a different application. And, by the way, the moment you touch that COTS application, you own it! The warrantee no longer applies. If the original manufacturer ever changes the application (which they will about every three months) YOU are now responsible for all changes.
So, don’t buy the package unless you have an architectural “fit”... but that presumes that the package has an Architecture... and that you have an Enterprise Architecture to which to compare the package. Otherwise, just do yourself a favor and change the Enterprise to fit the package.
So, you can see the strategy pattern...
“Make-to-Order” ---> “Provide-from Stock”
But... what happens to the supplier when the customer doesn’t know or can’t define the characteristics of the product they want to take delivery on until the moment they want to take delivery? Now what?
...You can’t wait until you get the order to engineer and manufacture the product.
...You can’t anticipate every product that any customer will ever want to take delivery on, the “killer” product, and already have it in stock.
About the Author
John A. Zachman
John A. Zachman is the originator of the “Framework for Enterprise Architecture” (The Zachman Framework™) which has received broad acceptance around the world as an integrative framework, an ontology for descriptive representations for Enterprises. Mr. Zachman is not only known for this work on Enterprise Architecture, but is also known for his early contributions to IBM’s Information Strategy methodology (Business Systems Planning) as well as to their Executive team planning techniques (Intensive Planning).
Mr. Zachman retired from IBM in 1990, having served them for 26 years. He is Founder and Chairman of his own education and consulting business, Zachman International®. He is also the Executive Director of the Federated Enterprise Architecture Certification Institute (The FEAC® Institute) in Washington, D.C., as well as the Chairman of the Zachman Institute™, a non-profit organization devoted to leveraging Zachman International's vast network of professionals and resources to offer services to small businesses and non-profit organizations as they prepare for and experience growth.
Mr. Zachman serves on the Executive Council for Information Management and Technology (ECIMT) of the United States Government Accountability Office (GAO) and on the Advisory Board of the Data Administration Management Association International (DAMA-I) from whom he was awarded the 2002 Lifetime Achievement Award. In August 2015, Mr. Zachman was awarded a Lifetime Achievement Award for “recognition of his long term impact and contribution to how people think and practice Enterprise Architecture today, leaving his mark on generations to come” by the Global University Alliance and LEADing Practice. He was awarded the 2009 Enterprise Architecture Professional Lifetime Achievement Award from the Center for Advancement of the Enterprise Architecture Profession as well as the 2004 Oakland University, Applied Technology in Business (ATIB), Award for IS Excellence and Innovation. In August 2011, he was awarded the Gen. Colin Powell Public Sector Image Award by the Armed Services Alliance Program. In November 2013 he was acknowledged for Achievement and Excellence for Distinguished Innovative Academic Contribution by the IEEE Systems, Man and Cybernetics Society Technical Committees on Enterprise Information Systems and on Enterprise Architecture and Engineering.
Mr. Zachman has been focusing on Enterprise Architecture since 1970 and has written extensively on the subject. He has facilitated innumerable executive team planning sessions. He travels nationally and internationally, teaching and consulting, and
is a popular conference speaker, known for his motivating messages on Enterprise Architecture issues. He has spoken to many thousands of enterprise managers and information professionals on every continent.
In addition to his professional
activities, Mr. Zachman serves on the Elder Council of the Church on the Way (First Foursquare Church of Van Nuys, California), the Board of Directors of Living Way Ministries, a radio and television ministry of the Church on the Way,
the President’s Cabinet of the King’s University, the Board of Directors of the Los Angeles Citywide Children’s Christian Choir, the Board of Directors of Heavenworks, an international ministry to the French-speaking world
and on the Board of Directors of Native Hope International, a Los Angeles-based ministry to the Native American people.
Prior to joining IBM, Mr. Zachman served as a line officer in the United States Navy and is a retired Commander in the U. S. Naval Reserve. He chaired a panel on "Planning, Development and Maintenance Tools and Methods Integration" for the U. S. National Institute of Standards and Technology. He holds a degree in Chemistry from Northwestern University, has taught at Tufts University, has served on the Board of Councilors for the School of Library and Information Management at the University of Southern California, as a Special Advisor to the School of Library and Information Management at Emporia State University, on the Advisory Council to the School of Library and Information Management at Dominican University and on the Advisory Board for the Data Resource Management Program at the University of Washington. He has been a Fellow for the College of Business Administration of the University of North Texas and currently is listed in Cambridge Who’s Who.