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1. AberdeenGroup The Manufacturing Performance Management Strategies Benchmark Report The Cornerstone of Long-Term Manufacturing Success January 2005
The Manufacturing Performance Management Strategies Benchmark Report Executive Summary Over the last 20 years, manufacturers have searched for ways to improve their top and bottom lines in the face of global competition and increasing customer service expecta- tions. Billions of dollars have been spent on employing manufacturing performance man- agement strategies and IT solutions to improve manufacturing operations and financial performance. While most manufacturers have benefited, the best performers have had more dramatic improvements (Figure 1) and in some cases redefined their market. Figure 1: Likelihood of Significantly Better Performance than the Competition Best-in-Class Industry Average Laggard 70% 60% 50% 40% 30% 20% 10% 0% Manufacturing Throughput Schedule Return on Inventory cycle time compliance assets turns - all forms Source: AberdeenGroup, December 2004 The Manufacturing Performance Management Strategies Benchmark Study finds that far too many manufacturers are still focused on the symptoms of their performance chal- lenges, struggle to get the data to drive their performance improvement programs ahead, and use few commercial IT solutions to support their efforts. The better performers, on the other hand, have moved past these issues and are focused on improving their manu- facturing capabilities that deliver market differentiation through a combination of ex- tended manufacturing processes, service-oriented improvement programs, and commer- cial technology to speed improvement and maximize manufacturing performance. Recommendations for Action • Focus on delivering superior customer service – along with cost reduction • Use performance analysis solutions to accelerate the pace of continuous im- provement • Extend manufacturing processes into logistics and customer service • Take a balanced approach to delivering integrated, closed loop performance management processes supported by flexible IT solutions • Drive manufacturing responsiveness as close to real-time as possible All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • i
The Manufacturing Performance Management Strategies Benchmark Report Table of Contents Executive Summary .............................................................................................. i Recommendations for Action.......................................................................... i Chapter One: Issue at Hand.................................................................................1 Chapter Two: Key Business Value Findings .........................................................3 Challenges and Responses........................................................................... 4 Making the Move to “To-Order” and Better Performance............................... 6 Lean Leads, But Most Companies Use Multiple Improvement Methodologies ............................................................ 7 Manufacturing Performance Management Framework.................................. 7 Chapter Three: Implications & Analysis............................................................. 10 Process and Organization Practices Need To Be Value Chain Oriented ..... 11 Key Capabilities........................................................................................... 12 The Importance of Effective Key Performance Indicators (KPI)................... 13 Technological Implications ........................................................................... 13 Pressures, Actions, Capabilities, Enablers (PACE)...................................... 16 Chapter Four: Recommendations for Action ...................................................... 18 Laggard Steps to Success........................................................................... 18 Industry Average Steps to Success ............................................................. 19 Best in Class Next Steps ............................................................................. 20 Appendix A: Research Methodology .................................................................. 21 Appendix B: Related Aberdeen Research & Tools ............................................. 24 About AberdeenGroup ...................................................................................... 25 All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup
The Manufacturing Peformance Management Strategies Benchmark Report Figures Figure 1: Likelihood of Significantly Better Performance than the Competition ..... i Figure 2: Pressures Driving Manufacturers to Implement Manufacturing Performance Management Programs...........................................1 Figure 3: Manufacturing Performance Management Practice Attainment ............2 Figure 4: Likelihood of Significantly Better Performance than the Competition ....3 Figure 5: Manufacturing Performance Management Strategic Actions.................4 Figure 6: The Aberdeen Manufacturing Performance Management Framework..8 Figure 7: Aberdeen Manufacturing Performance Management Framework Key Capability Importance – Performance Category................................................. 12 Figure 8: Percentage of Respondents with Effective KPI Programs................... 13 Figure 9: Percentage of Enterprises that Reported Above Average/Dramatically Better than Industry Performance......................... 14 Figure 10: IT Investment Priorities ..................................................................... 15 Figure 11: Current IT Solution Deployment ........................................................ 16 Tables Table 1: Manufacturing Performance Management Challenges and Responses .5 Table 2: Manufacturing Style Deployed................................................................6 Table 3: Manufacturing Performance Management Competitive Framework ..... 11 Table 4: PACE (Pressures, Actions, Capabilities, Enablers)............................... 17 Table 5: PACE Framework Explanation.............................................................. 22 Table 6: Relationship between PACE and Competitive Framework ................... 23 Table 7: Competitive Framework........................................................................ 23 All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup
The Manufacturing Performance Management Strategies Benchmark Report Chapter One: Issue at Hand Key Takeaways • Improve or perish • Best in Class performers are better masters of their destiny • Perseverance pays off D espite an improving global economy and manufacturing productivity at all-time high levels, manufacturers are besieged by more demanding customers and a global economy that is constantly driving product prices lower and customer services expectations higher (Figure 2). There seems to be no escape from this phenome- non – from tier 1, 2 and 3 automotive suppliers facing mandated cost reductions to con- sumer manufacturers selling to the large retailers. Outsourcing or moving manufacturing to low-cost regions may not be practical or only provide benefits that quickly get eroded by fast following competition. To stay ahead of their custom- Competitive Framework ers, leading manufacturers have turned to manufacturing per- Key formance management strategies and supporting IT solutions that maximize current operations performance of and foster The Aberdeen Competi- continuous improvement of that performance. tive Framework defines enterprises as falling into one of the three following Figure 2: Pressures Driving Manufacturers to Implement levels of practices and Manufacturing Performance Management Programs performance: Laggards (20%) — 70% practices that are signifi- 60% cantly behind the average 50% of the industry 40% Industry Norm (60%) — practices that represent 30% the average or norm 20% Best in Class (20%) — 10% practices that are the best 0% currently being employed Lower Improve Shorter Complete and significantly superior product return-on- order lead and on- to the industry norm prices investment times time shipments Best-in-Class Average/Laggard Source: AberdeenGroup, December 2004 All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 1
The Manufacturing Performance Management Strategies Benchmark Report Manufacturers are more focused than ever on profitable growth and increasingly leery of taking little to no margin business, as they have seen the long term effect. With little cus- tomer loyalty, meeting reduced price targets may guarantee only this year’s business and hurt the company financially. For example, the automotive market is strewn with the car- casses of tier suppliers that produced themselves out of business because they entered into contracts and could not keep ahead of the mandated cost reductions. PACE Key — For more detailed descrip- Enterprises that have mastered what Aber- tion see Appendix A deen describes in the manufacturing perform- ance management competitive framework as Aberdeen applies a methodology to benchmark research that evaluates the business pressures, best-in-class practices are less influenced by actions, capabilities, and enablers (PACE) that pricing pressure than the rest of their peers indicate corporate behavior in specific business because they are able to manufacture more processes. These terms are defined as follows: cost effectively. Conversely, best-in-class enterprises are more influenced by pressures Pressures — external forces that im- that when addressed lead to long term finan- pact an organization’s market position, cial and operational success: releasing competitiveness, or business operations trapped capital and service based competi- Actions — the strategic approaches tiveness. that an organization takes in response There are also disproportional numbers of to industry pressures manufacturing performance improvement Capabilities — the business process initiatives that have produced little or no re- competencies required to execute sults. Methodologies and technologies are not corporate strategy enough to guarantee success. As described in Enablers — the key functionality of Aberdeen’s PACE methodology, there needs technology solutions required to to be a clear linkage between the business support the organization’s enabling pressures, strategic actions, and required ca- business practices pabilities and technology enablers. Enter- prises that want to attain or maintain differen- tiated market positions should plan for a long term commitment to their manufacturing performance management program (Figure 3). Figure 3: Manufacturing Performance Management Practice Attainment 60% 50% 40% 30% 20% 10% 0% Laggard Industry Average Best-in-Class No Activity Early Mature Source: AberdeenGroup, December 2004 All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 2
The Manufacturing Performance Management Strategies Benchmark Report Chapter Two: Key Business Value Findings • Best-in-class/mature manufacturers focus on customer differentiating strategies that de- Key Takeaways liver greater results • Best-in-class manufacturers place a high premium on manufacturing performance man- agement flexibility • Manufacturing performance management programs are a key enabler for moving from “to-stock” to “to-order” • Manufacturers need a framework to balance all of the elements required for manufactur- ing performance management success M anufacturing has long been the center of attention for performance improve- ment because of its impact on total cost and service performance. There are many known cases of success, from the Toyotas to the Dells, and not so well known companies such as HON Industries or Pella Windows. The research findings show that enterprises with best-in-class operations and performance improvement prac- tices were significantly more likely to outperform the competition in all seven manufac- turing key performance indicators (KPIs) that were evaluated in this study (Figure 4). Figure 4: Likelihood of Significantly Better Performance than the Competition Best-in-Class Industry Average Laggard 70% 60% 50% 40% 30% 20% 10% 0% Manufacturing Throughput Schedule Return on Inventory Inventory cycle time compliance assets turns - turns – raw finished material & wip product Source: AberdeenGroup, December 2004 There is a considerable difference in the individual strategic actions that Best in Class enterprises deploy versus Industry Average and Laggard (Figure 5). Best-in-class- enterprises focus more on the strategic actions that provide competitive differentiation – lead time, flexibility, and agility. Besides cost reduction, Industry Average and Laggard All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 3
The Manufacturing Performance Management Strategies Benchmark Report enterprises focus more on inventory reduction – while important; inventory reduction is an internally focused benefit. Figure 5: Manufacturing Performance Management Strategic Actions 80% 70% 60% 50% Best-in-Class 40% Industry Average 30% 20% Laggard 10% 0% Reduce Reduce Improve manufacturing lead manufacturing manufacturing time costs flexibility/agility Source: AberdeenGroup, December 2004 Best-in-class enterprises – which typically have more mature manufacturing performance management programs – have already made considerable progress driving out inventory and improving manufacturing reliability. Getting past these “hurdles” allows enterprises to focus on reducing lead time and improving agility and flexibility. Manufacturers should view themselves within the context of their manufacturing performance manage- ment program maturity and expect to change their strategies from “gain control” to “competitive differentiation” as they evolve from early stage to more mature programs. The quantitative results from the benchmark study validate that best-in-class and more mature manufacturing performance management programs not only help companies achieve above-average performance, but they also produce better improvement results. For example: • Best-in-class manufacturers generate 6% to 12% greater cost reduction • Best-in-class manufacturers have 30% to 50% greater finished goods inven- tory turn improvement • Mature manufacturers have 20% to 50% greater manufacturing cycle time reduction • Mature manufacturers have 25% to 40% greater complete and on-time ship- ment improvement Challenges and Responses Getting the most from manufacturing has been the focus of many enterprises over the last 20 years. It is the center of competitiveness for operationally excellent enterprises and a number of philosophies and techniques have been applied to improve manufacturing per- formance from the early days of computer integrated manufacturing to the theory of con- All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 4
The Manufacturing Performance Management Strategies Benchmark Report straints, lean manufacturing, and Six Sigma. Yet, the results have been widely mixed with strategies, tactics, and technology equally conspiring for success of failure. Standing in the way of implementing or enhancing manufacturing performance manage- ment strategies, according to survey respondents, is collecting the required data and sig- nificant cultural change (Table 1). Without the right strategy, data collection can be cum- bersome, nonproductive, and in conflict with the performance improvement methodology it is supporting. Inefficient and ineffective data collection is the reason that many manu- facturing performance management programs are stopped. Manufacturers need to build data collection into the process via automation if possible. For example, a boat manufac- turer uses RFID on its boats to understand the position of the boat in the factory and it manufacturing status. Others have placed barcodes on kanban totes, other mobile assets, or the work itself that were automatically read as they passed specific locations on the floor. Cultural change is also critical to manufacturing performance management success. Best- in-class manufacturers embrace change and worry that too much structure in their pro- gram will slow down the change. Industry average and laggard manufacturers struggle to garner top management commitment and show financial justification – both are critical to getting manufacturing performance management programs started and maintaining their continuity. This same paradigm holds true for the maturity of the manufacturing per- formance program – the more mature the program, the more ingrained the support from management and the more cultural willingness to change. Table 1: Manufacturing Performance Management Challenges and Responses Challenges % Selected Responses to Challenges % Selected 1. Data collection 59% 1. A method to measure the business 53% impact of manufacturing perform- ance management initiatives 2. Significant culture change 57% 2. Simple and automated data collec- 52% tion 3. Top management commitment 50% 3. Engage/gain commitment of top 46% management 4. No financial justification 38% 4. Have a methodology to determine 44% value 5. Available IT solutions do not meet 30% 5. Introduce change gradually 33% our requirements 6. Manufacturing processes are con- 29% 6. Performance management meth- 29% stantly changing odology and IT solution that can keep pace with my changing manufacturing processes Source: AberdeenGroup, December 2004 Responses to the challenges companies face were strikingly different between best-in- class companies and the rest of the respondents. Best-in-class manufacturers placed the All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 5
The Manufacturing Performance Management Strategies Benchmark Report most emphasis on improvement methodologies and IT solutions that can keep up with their pace of change, while the other manufacturers rated it last. This lack of focus on ensuring methodologies and technology are flexible enough to keep up with changing manufacturing processes is the reason that many implementations of manufacturing per- formance management IT solutions fail to take hold for the long term. While highly func- tional, these programs are perceived as stifling continuous improvement and innovation, deemed as constraining, not enabling and summarily ripped out. Laggards were not at all worried about having their performance management solutions keep up with the pace of manufacturing change, which is disconcerting. Instead, they wanted “simple and automated data collection”, which is integral to solving their issues of engaging top management and measuring business impact. Without the data, it is hard to build a case to move forward with performance improvement initiatives with the more investment-conservative management that permeates laggard organizations. Making the Move to “To-Order” and Better Performance As part of the analysis, Aberdeen wanted to see what impact manufacturing style had on the use of manufacturing performance management programs and vice-versa (Table 2). Table 2: Manufacturing Style Deployed Manufacturing Style Percent Respondents Repetitive or rate based manufacturing, to stock products, high volume production, medium order lead times (weeks), limited number of SKUs 23% (max 000's) or minimal difference SKU to SKU To-order manufacturing, low to medium volume (max 0000's), long or- der lead times (months), complex product built through common proc- 42% esses To-order manufacturing/final assembly, high volume production (00000+'s), short order lead times (days), high number of 35% SKU's/products configured to customer requirements Source: AberdeenGroup, December 2004 Manufacturing performance management programs are a key enabler in helping manu- facturers move from to-stock to to-order manufacturing style. As manufacturers went from “No Activity” to “Early” to “Mature” involvement with manufacturing performance management programs, there was a steady decline in the number of repetitive/rate-based, to-stock manufacturers. Manufacturers with greater than two year involvement in a manufacturing performance management programs were 87% more likely to be “to- order”. Aberdeen believes that since mature manufacturers are more focused on improv- ing lead time and flexibility/agility, they are able to reduce manufacturing lead times to be within order lead time and stop making product to forecast. The research also conclu- sively points to the value of moving to a to-order manufacturing style. Manufacturers that were operating with one of the two “to-order” manufacturing styles represented 91% of the best-in-class performers. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 6
The Manufacturing Performance Management Strategies Benchmark Report Lean Leads, But Most Companies Use Multiple Improvement Meth- odologies At the core of the manufacturing performance management program is an improvement methodology. The findings point to a number of methodologies being deployed. Manu- facturers seeking to implement plant-, division-, or corporate-wide manufacturing per- formance management programs must be prepared to address the variability and applica- bility of improvement methodologies being employed in their companies today. Almost 80% of the companies that were active with manufacturing performance management programs said they use some form of Lean. While Lean is prevalent, most manufacturers also use a number of other techniques either in parallel or in conjunction with their Lean methodology deployment as each methodology has its own strengths and weaknesses. For example, there is a growing trend to combine Six Sigma with Lean as they are com- plementary. Lean focuses on elimination of waste and Six Sigma focuses on elimination of variability. Surprisingly, MRP emerged as the second most prevalent improvement methodology and this includes the best-in-class performers and mature manufacturers who are using it more than anyone else. Despite the downplay of MRP by the technology and consulting communities, there are a number of companies rated “class A” manufac- turers that have put in place well run MRP-based processes. Aberdeen research shows that while the improvement methodology is important, the overarching goals of the manufacturing performance improvement program are para- mount. Aberdeen’s analysis of two manufacturers drives home this point. The goal of the first manufacturer was to reduce raw material, work-in-process, and finished goods in- ventory by 80%. The second manufacturer wanted to be able to reliably build and ship orders in several days as opposed to the industry norm of six to twelve weeks. Both suc- ceeded in meeting their goals. However, the second manufacturer was able to use its su- perior manufacturing speed and reliability to create competitive differentiation. It grew its business by ten times over six years. The first manufacturer had marginal growth and was eventually bought by a competitor. Manufacturing Performance Management Framework Manufacturers in search of world class performance have been introduced to many meth- odologies and technologies over the last 20 years. For example, there have been a lot of conflicting opinions on whether it is more important to improve execution or planning. Aberdeen research concludes that the best performing companies are competent in plan- ning, execution and more. To help manufacturing executives understand the key elements required as part of an effective manufacturing performance management strategy, Aber- deen has created the Aberdeen Manufacturing Performance Management Framework (Figure 6). All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 7
The Manufacturing Performance Management Strategies Benchmark Report Figure 6: The Aberdeen Manufacturing Performance Management Framework Control Plan (Plan vs Actual Analysis/ (Scheduling, Sequencing, Alerting/Replanning) Load Leveling) Analysis (Effectiveness/ Improvement) Execute (Instruction/Inspection/ Status) Source: AberdeenGroup, December 2004 For many seasoned manufacturing executives, the Aberdeen Manufacturing Performance Management Framework will look quite familiar. It is loosely based upon the work of Walter Shewhart, W. Edwards Deming, and others. It represents a closed-loop manage- ment approach for effectively running and improving manufacturing performance. At any point in time manufacturing executives will be leveraging one or all of the areas to im- prove the effectiveness of their manufacturing operations. However, the goal is to achieve long term balance across all four areas in a virtuous cycle that allows manufac- turing performance management programs to best organize, produce and improve manu- facturing performance. The framework is broken down into four major areas: • Plan – The strategies, processes, and supporting IT solutions that help manu- facturers determine the optimal sequence or load level manufacturing opera- tion to reliably meet or exceed the combination of customer service, throughput, and financial goals of the enterprise. Planning should include all manufacturing resources – equipment, materials, workforce, tools, suppliers, etc. and relevant demand information – orders, forecasts, inventory, etc. Planning should be daily or more frequently based upon the sales and opera- tions plan and the events of the business. Planning capabilities are critical to All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 8
The Manufacturing Performance Management Strategies Benchmark Report organize orders to ensure a feasible schedule, arbitrate scare resources, and take advantage of sequence and changeover trade-offs to improve operations and financial performance. • Execute - The strategies, processes, and supporting IT solutions that help manufacturers provide the work force and plant automation systems with the information required to meet the schedule requirements, including work in- structions, testing requirements, equipment and kanban status, supplier re- plenishments, inventory status, etc. As manufacturing occurs, execution tracks the progress and genealogy of the materials and work. Execution ca- pabilities are critical to synchronize all resources and track their perform- ance. • Control – The strategies, processes, and supporting IT solutions that meas- ure actual versus plan performance in real-time and predict performance de- viations, alert the workforce of actual or anticipated deviations, and proac- tively correct the deviations if possible. The goal of control is to fix devia- tions as they occur and before the shipment schedule is impacted. Strong execution capabilities are critical for effective control and a tight linkage to scheduling (not necessarily planning) is necessary to understand the impact of deviations and instantly make critical adjustment to manufacturing. • Analysis – The strategies, processes, and supporting IT solutions that help manufacturers understand the complex operations and financial performance relationships required to improve the effectiveness of the operation. There are two aspects of analysis: 1) performance analysis, which tends to be real time, and 2) historical and predictive analysis, which models and simulates the performance of the operations to allow changes in the operations, de- mand, etc. to be evaluated before being introduced into production. Analysis capabilities are critical for supporting and accelerating continuous improve- ment programs. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 9
The Manufacturing Performance Management Strategies Benchmark Report Chapter Three: Implications & Analysis • Process and organization practices need to be value chain oriented Key Takeaways • Best-in-class manufacturers take a balanced approach to employing all four Manufac- turing Performance Management capabilities: plan, execute, control, and analysis. • IT solutions that enable real-time closed loop planning, execution and control are critical to producing superior results • Packaged applications have not really penetrated manufacturing performance man- agement M anufacturing performance management program success can be tied to the abil- ity to execute the practices described in the Manufacturing Performance Man- agement Competitive Framework, shown in Table 3. The results of the benchmark study show that there is a direct relation to the practices described in the Manufacturing Performance Management Competitive Framework in five key categories: (1) process (the ability to integrate manufacturing effectively into the supply chain); (2) organization (customer value focus/philosophy, level of collaboration among stake- holders); (3) knowledge (real-time visibility and understanding of performance); (4) technology (enabling the closed loop performance management process); and (5) per- formance measurement (metrics with frequency that promotes customer focused per- formance and continuous improvement). Survey respondents fell into one of three categories – Laggard, Industry Average, or Best in Class — based on their characteristics. Best in Class enterprises extend manufacturing into the supply chain, ensure that organization structure and goals are consistent with creating differentiated value for the customer, and leverage technology to provide proac- tive knowledge to enable the workforce to effectively run the operation and improve its performance. Laggard enterprises by contrast treat manufacturing processes and organi- zation as a set of stand alone entities, and do little with technology to enable performance knowledge to be proactively placed in the hands of those that can ensure effective opera- tions and improve performance. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 10
The Manufacturing Performance Management Strategies Benchmark Report Table 3: Manufacturing Performance Management Competitive Framework Laggards Industry Average Best in Class Process Non integrated set of Whole of manufacturing Inbound and outbound manufacturing functions integrated into a single processes integrated process with manufacturing proc- ess Organization Fragmented functional Manufacturing organized Manufacturing organiza- departments within as a single function, with tion integrated with cus- manufacturing with little regular coordination tomer service/delivery interaction between de- between the functional organizations, coordina- partments departments within tion across manufactur- manufacturing ing, customer service and logistics Knowledge Performance change Performance change Performance change known well after the fact, known immediately after anticipated before it not in time for any cor- has occurred, local cor- occurs, corrective action rective action and not rective action under- undertaken in time to communicated to down- taken, communication to keep to schedule or stream functions downstream functions minimize impact, down- stream operations in- cluded in corrective ac- tion Technology Manual/spreadsheet Separate and loosely Integrated planning, planning & analysis, coupled planning, execu- execution and analysis paper based execution, tion and analysis solu- solution that constantly nothing to support con- tions, current perform- monitors performance in trol – just reporting ance versus goals/plan real time, providing display on shop floor feedback when disrup- tions occur or are antici- pated Performance Focus is unit cost and Focus is on time ship- Focus is customer re- Measurement asset utilization at the ment and total cost sponsiveness: cycle departmental level time, flexibility, through- put and resource effec- tiveness Source: AberdeenGroup, December 2004 Process and Organization Practices Need To Be Value Chain Ori- ented The best performing enterprises integrate inbound and outbound logistics as part of the manufacturing process to shorten order lead times, improve responsiveness, and drive out inventory. The true performers are able to build-to-order a wide range of products with lead times that are a fraction of their competition, yet carry inventory that is consumed in hours or even minutes. For instance, many suppliers to electronics and industrial build- All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 11
The Manufacturing Performance Management Strategies Benchmark Report to-order companies have been integrated into core manufacturing planning and execution processes. These suppliers are expected to act as if they were within the four walls of the plant, reacting in minutes or several hours at worst to material requests and delivering product right to the point of consumption on the production line. The best performing enterprises ensure that the manufacturing organization is integrated with customer service and coordinated with the rest of the supply chain operations. Best- in-class manufacturers have recognized that traditional “hand-off” management ap- proaches (e.g. from customer service to manufacturing or from manufacturing to distribu- tion or transportation) do not foster an integrated, high-performing customer focused manufacturing operation. There are many times when due to unforeseen circumstances, performance issues arise in manufacturing, customer service or the rest of the supply chain where – if the organizations worked together – trade-offs could be made between the organizations to ensure on-time delivery or minimize delivery delays. Key Capabilities All manufacturers cited that they most wanted to “Streamline operations and take out non value added costs” and “Identify and eliminate or optimize throughput through bottle- neck operations.” But the story is completely different for the next set of priorities. Best- in-class manufacturers valued “Minimizing lot size, improving operational and workforce flexibility, and just-in-time manufacturing”, which is consistent with their customer fo- cused differentiation strategy. Conversely, industry average and laggard manufacturers place more emphasis on “addressing manufacturing deviations as they occur”, which is akin to a doctor focusing on the symptom and not the illness. Evaluating capability importance from the Aberdeen Manufacturing Performance Man- agement Framework also shows divergent strategies (Figure 7). Best-in-class manufac- turers take a more balanced approach to employing all four key capabilities, while their peers are much more focused on the planning element. It’s time to end the debate on which capability – planning or execution – is the most critical. The answer is they both are and so is control and analysis. Figure 7: Aberdeen Manufacturing Performance Management Framework Key Capability Importance – Performance Category 100% 80% Best-in-Class 60% Industry Average 40% 20% Laggard 0% Planning Execution Control Analysis Source: AberdeenGroup, December 2004 All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 12
The Manufacturing Performance Management Strategies Benchmark Report Best-in-class and more mature programs place much more emphasis on analysis capabili- ties, which are critical to support continuous improvement methodologies like Lean and Theory of Constraints. One of the biggest challenges cited by manufacturers was deter- mining the best improvement opportunities and the right solutions for those opportuni- ties. Many manufacturers struggle to get away from the “squeaky wheel” syndrome where the person or the organization with the greatest clout gets the most improvement focus rather than the areas that will produce the greatest performance improvements. As manufacturers get deeper into their manufacturing performance management programs, the “low hanging fruit” improvement opportunities disappear. Manufacturers are left with unraveling the complex relationships that are inhibiting performance improvement. One large industrial manufacturer expressed frustration over the inability to get past conflict- ing opinions on the best way to solve their scheduling reliability problem. It had no way to model and evaluate the two alternatives – one from production planning, the other from manufacturing engineering – to determine the benefits and risks of each suggested solution. The Importance of Effective Key Performance Indicators (KPI) Aberdeen evaluated not only what key performance indicators (KPIs) were used, but how often, and determined that best-in-class enterprises do a much better job of implementing effective KPIs as part of their manufacturing performance management programs (Figure 8). Most enterprises measure performance. The problem is that the frequency of meas- urement is too slow to impact performance and hence ineffective (see Appendix A for an explanation of KPI Frequency Effectiveness). KPIs are also important not only for short term performance, but to provide performance insight for continuous improvement pro- grams. Figure 8: Percentage of Respondents with Effective KPI Programs 90% 80% 70% Best-in-Class 60% 50% 40% Industry Average 30% 20% Laggard 10% 0% Product Complete and Schedule Throughput Manufacturing quality on time compliance cost shipment Source: AberdeenGroup, December 2004 Technological Implications IT solutions that enable real-time closed loop planning, execution and control are critical to producing superior results (Figure 9). The value of these integrated capabilities is the All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 13
The Manufacturing Performance Management Strategies Benchmark Report ability to react to all kinds of changes as they occur – orders and material, equipment and workforce availability – and seamlessly flow the responses to the parties that can effect the change. Without real-time manufacturing status, orders in today’s highly capacity constrained plants cannot be directly released to the shop floor with any degree of reli- ability. Integrated real-time information also allows deviations to be detected in upstream manufacturing processes and possibly corrected before the shipment schedule gets im- pacted. Simply integrating a planning solution to an execution solution will not create a real time control solution. The same can be said for integrating an event management solution with either planning or execution solutions. The reasons are that the integration needs to be more than operational status for the solution to be effective and work in the long-term. The models, rules, and policies, operational constraints, base data, and so on need to be continually synchronized and maintained. Figure 9: Percentage of Enterprises that Reported Above Average/Dramatically Better than Industry Performance 70% Integrated planning, execution and analysis solution that constantly monitors 60% performance in real time, providing feedback when disruptions occur or are 50% anticipated 40% Separate and loosely coupled planning, execution and analysis solutions, current 30% performance versus goals/plan display on shop floor 20% 10% Manual/spreadsheet planning & analysis, paper based execution, nothing to support 0% control – just reporting Complete & on- Finished product Manufacturing Manufacturing time shipment inventory turns Cycle time Cost Source: AberdeenGroup, December 2004 The importance of analytical solutions such as business intelligence and simulation have been available for years, they are still not well understood in manufacturing. Aberdeen recommends that manufacturers reconsider their priorities for this extremely important capability. The basis of effective performance improvement is to understand what the most important areas to be improved are. As manufacturers go beyond the early stage “low hanging fruit” improvements, the subsequent opportunities are not so obvious. Methodologies such as Six Sigma are “fact based” and require hard analysis to determine where to place scarce resources to get the greatest return. Continuous improvement cycle time, like manufacturing cycle-time, needs to be reduced to gain or maintain competitive advantage. Reducing the risk involved with change is an important corollary issue. Much of the im- provement effort is tied-up in validating the proposed solutions. Manufacturers need to leverage solutions that allow them to simulate the operations, introduce changes, and de- termine their impact – operationally and financially – before being adopted. The same is true with respect to risk. The proposed improvement needs to be evaluated from an op- erational robustness perspective. For example, Aberdeen has seen the zealous quest to All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 14
The Manufacturing Performance Management Strategies Benchmark Report take out all inventory result in operational instability and poor on time shipment perform- ance. Manufacturers have had to add back inventory and tear out recent capital expendi- tures to improve reliability. This could be avoided if line design solutions that modeled the operation and understood operational variability were deployed during the improve- ment analysis phase. As in the June 2004 Lean Strategies Benchmark Study, planning leads the IT investment strategies for the next 12 – 24 months (Figure 10). Enterprises that focus on Lean or simi- lar methodologies that minimize buffer inventory have found that schedule reliability has become an issue and that simplified approaches to sequencing/load leveling production do not solve the problem. Best-in-class manufacturers’ IT investment strategies are con- sistent with their balanced approach to the Aberdeen Manufacturing Performance Man- agement Framework. However, industry average and laggard manufacturers are mistak- enly downplaying execution investment. Execution is the key to empowering the work- force with the right information at the right time, and collecting the data is particularly critical for control and analysis capabilities. Figure 10: IT Investment Priorities 60% 50% Best-in-Class 40% 30% Industry Average 20% Laggard 10% 0% Planning Execution Control Analysis Source: AberdeenGroup, December 2004 The use of packaged applications in support of manufacturing performance management programs is not as pervasive as commonly believed (Figure 11). There are several rea- sons for this: First, detail and ease of use matter in manufacturing, and ERP solutions have historically done a poor job on both fronts. They have traditionally struggled to ac- curately model manufacturing operations and to provide effective user interface and ma- chine integration. Second, solution flexibility is critical for long term use. Many of the specialist solutions of the early 90’s were highly functional but not easy to change. As new improvement methodologies like Lean came along, both the ERP based and older specialist solutions were viewed as cumbersome and not value added. Hence they were ripped out during process simplification exercises. Third, with very few exceptions, real- time integration across planning, execution, and control has been a custom effort for manufacturers as vendors delivered either planning, execution, or planning loosely cou- pled to execution and seldom with any form of closed-loop control capability. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 15
The Manufacturing Performance Management Strategies Benchmark Report Figure 11: Current IT Solution Deployment 40% 30% 20% 10% 0% Custom None ERP ERP plus Specialist developed other vendor solutions Source: AberdeenGroup, December 2004 IT investment for the next 12 – 24 months will still be heavily driven by custom solutions although the role of packaged applications – ERP and specialist vendors – will increase. Tremendous inertia still exists within best-in-class manufacturers to continue to custom develop their IT solutions. Aberdeen does not believe that custom in this case means code level investment, because few manufacturers carry the required IT resources. In- stead, custom means a heavy reliance on spreadsheets and more of a portfolio assembly of individual best-in-class planning, execution, control, and analysis solutions. Because of the complexity of managing portfolio integration of multiple best-in-class solutions, best-in-class manufacturers are using portal technology to provide a common look and feel for manufacturing personnel across the various solutions. Integrated manufacturing performance management solutions have seen a resurgence over the last several years as a new set of vendors along with existing vendors have de- veloped solutions that support methodologies such as Lean and do a much better job at modeling manufacturing operations, supporting product tracking and problem resolution, and providing performance analysis. However, there is a divergence in which type of packaged application vendor to use. Best-in-class manufacturers and larger manufactur- ers have the most interest in specialist vendors because they have more internal resources to support these projects, do not see integration as an issue, and place more emphasis on solution value than vendor viability. On the other hand, laggard and smaller manufactur- ers are much more ERP focused as they are more conservative, solution cost focused and shy away from integrating multiple solutions. Pressures, Actions, Capabilities, Enablers (PACE) Throughout this benchmark study, we have shown that there is a clear relationship be- tween the pressures companies identify and the actions they take, and their subsequent competitive performance. All enterprises should examine their prioritized PACE selec- tions and determine whether there are valuable perspectives to be gained from compari- son with the PACE priorities of best-in-class companies (Table 4). All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 16
The Manufacturing Performance Management Strategies Benchmark Report Table 4: PACE (Pressures, Actions, Capabilities, Enablers) Prioritized Priorities Pressures Actions Capabilities Enablers 1 Customers Reduce Streamline opera- Solution that helps identify demand- manufactur- tions and take out and eliminate non value ing/competitors ing costs non value added added activities (waste) driving product costs prices lower 2 Meet increasing Improve Identify and elimi- IT-enabled solutions that demand with throughput nate or optimize can help design the supply the same set of throughput through chain based on Lean prin- assets and bottleneck opera- ciples and load level the people tions building and delivery of orders 3 Improve return- Reduce raw Build to order with Solution that supports pull on-invested- material, WIP materi- based manufacturing and capital/assets and finished als/components supplier replenishment goods inven- delivered for that tory order 4 Customer de- Reduce Minimize dwell time Solution that finds the fast- manding manufactur- and provide suppli- est path through production shorter order ing lead time ers with upstream gives supplier early warning lead times visibility demand signals 5 Customer de- Improve Address manufac- Solution that in real-time manding com- schedule turing deviations as reports and corrects sched- plete and on- compliance they occur ule deviations time shipments 6 High demand Improve Minimize lot size, Solution that can dynami- volatility manufactur- provide multiple cally route orders through ing flexibil- production paths the factory taking into ac- ity/agility and increase work- count equipment and work- force flexibility force capabilities Source: AberdeenGroup, December 2004 All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 17
The Manufacturing Performance Management Strategies Benchmark Report Chapter Four: Recommendations for Action Key Takeaways • Find the value, consolidate and stabilize operations, and pick up the improvement pace • Move continuous improvement from a cost reduction focus to focus on superior customer service and throughput • Move to manufacturing processes that react and adjust in seconds and minutes T he findings presented in chapters one through three demonstrate that best perform- ing manufacturers have fundamentally different philosophies about the value driv- ers of manufacturing and the role that manufacturing performance management strategies and technologies play in enabling those philosophies. Best-in-class enterprises have made the shift from cost reduction to superior customer service as the primary focus with cost reduction a natural by-product. These enterprises use manufacturing perform- ance management strategies and technologies in a balanced way to extend manufacturing into the supply chain, make it more responsive to customer demand and accelerate the rate of change to keep ahead of the competition. Finally, best-in-class manufacturers are fully committed and put in the time to transform the manufacturing organization and cul- ture to one of change and the search for better performance. There should be no surprise that best-in-class manufacturers stand to benefit from the increasing demands of custom- ers and not be their victims. Because manufacturers are at various stages with their manufacturing performance man- agement strategies and technologies, Aberdeen has developed a set of recommendations based upon the competitive framework categories. Laggard Steps to Success 1. Pick an improvement methodology, demonstrate and promote success by focus- ing on easily identified and remedied problems (excess inventory and elimination of simple bottlenecks), and establish a performance improvement culture. Many manufacturers mistakenly evaluate their performance from today’s per- spective, not where they or their competition will be 2 years from now. Even maximizing current performance will not be good enough, especially if it is cost focused. Global sourcing will make such attitudes fatal for laggard manufacturers that do not adopt continuous improvement strategies and technologies. For ex- ample, the real news with China based sourcing is not low price, that’s always been there. It is the dramatically improving product sophistication and quality. 2. Establish a set of measures and improvement goals for the number of improve- ments efforts underway and time required to go from improvement concept to re- sults. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 18
The Manufacturing Performance Management Strategies Benchmark Report Performance improvement cycle time is similar to manufacturing cycle time – it must to be continuously reduced. American-based automotive manufacturers are an illustration of not keeping manufacturing performance improvement pace with their Japanese counterparts in areas such as assembly line flexibility. The Japa- nese manufacturers have been able to produce a wider array of products with a smaller asset base, improving the time to market and lowering costs and required investment. 3. Leverage manufacturing performance management analysis solutions to model current manufacturing conditions, identify performance improvement opportuni- ties and evaluate their robustness. These solutions help address the related issues of top management buy-in, finan- cial justification, and risk mitigation that keep more conservative manufacturers from either adopting or accelerating the deployment of manufacturing perform- ance management strategies. 4. Establish an end-to-end manufacturing process, organization and supporting metrics, and leverage manufacturing performance execution and control solu- tions to help synchronize the operation and measure performance. Manufacturers need to eliminate the disjointed manufacturing operations, organi- zations and metrics that have lead to excess inventory and poor financial and op- erational performance. To support new behavior, manufacturers need to imple- ment execution solutions that provide the manufacturing floor with the informa- tion required to build the right product at the right time, provide current perform- ance status and identify deviations as they occur for immediate corrective action. A well implemented execution and control solution will also provide much of the base data required to support the continuous improvement program. Industry Average Steps to Success 1. Move continuous improvement from a cost reduction to focus on superior cus- tomer service and throughput This may sound heretical to some, but a focus on shorter lead times, complete and on-time shipment, and product quality actually drive more meaningful cost reduction. An example of this change in philosophy is set-ups/change-overs. A cost driven approach would be to minimize the number of set-ups/change-overs, which will reduce costs, but not improve manufacturing responsiveness. A supe- rior customer service focus reduces set up/change-over time which improves cost, manufacturing responsiveness and throughput. 2. Extend manufacturing into customer service and logistics processes. As part of the strategy to focus on superior customer service, manufacturing can dramatically impact overall order cycle time and delivery reliability when it is in- tegrated into customer service and logistics processes. Examples include assem- bly that is sequenced for end-of-line shipment or customer service with direct ac- cess to the manufacturing schedule. 3. Implement manufacturing performance management planning solutions to im- prove reliability and responsiveness. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 19
The Manufacturing Performance Management Strategies Benchmark Report As manufacturing performance management programs eliminate inventory and obvious bottlenecks, manufacturers find that despite attempts to further simplify, scheduling complexity does not go away and schedule compliance degrades with a solution capable of modeling the complexity. In addition, quick and reliable “what if” schedule change analysis becomes critical as manufacturers compress delivery date quoting cycle time or minimize the impact of material shortages. Best in Class Next Steps 1. Focus the improvement program to find/drive the manufacturing competitive dif- ferentiation inflection point The best of the best focus on establishing or maintaining a customer-perceived performance gap between itself and the competition. The goal is not to be simply better, but to be the supplier of choice through differentiated capabilities – for example, through a combination of superior order (manufacturing related) lead times, flexibility to change orders once committed, and cost,. A desirable per- formance gap is typically anywhere from 25% to 200% better performance than the competition. It normally requires step wise improvements in manufacturing processes, organization and supporting solutions to achieve such a gap. Step wise change is best supported by analysis solutions that understand manufacturing dy- namics so they can identify whether the new performance goals can be met and that the operation will run reliably. 2. Move to manufacturing that reacts and adjusts in seconds and minutes As order lead times move to hours and product diversity expands, manufacturers need to establish processes and supporting automation capable of reacting in minutes or even seconds. Manufacturers need to be able to produce as close to a unit of one as possible and have solutions that can use real-time closed loop inte- gration to react to new orders and operation deviations as they occur, limiting human intervention in the decision making process to extra-ordinary situations. Given their emphasis on real-time performance and an embedded culture of con- tinuous change, best-in-class manufacturers should put a high priority on the in- tegration across the four key capabilities – planning, execution, control and analysis. They should also insist on the solution’s ability to be changed by the workforce as opposed to an IT staff. 3. Integrate suppliers and inbound logistics into manufacturing operations Supplier and inbound logistics lead-times can become the largest impediment to improving overall manufacturing responsiveness and reliability. Manufacturing processes and IT solutions should be extended into suppliers and logistics opera- tions. Extension allows suppliers to better react to changing demand or kit and deliver directly to the production line hourly for example. Extension into in- bound logistics provides manufacturing with greater visibility of incoming ship- ments, allowing the materials to be committed before they reach the plant or re- act to delayed inbound shipments before production is materially impacted. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 20
The Manufacturing Performance Management Strategies Benchmark Report Appendix A: Research Methodology B etween October and November 2004, AberdeenGroup in conjunction with Indus- try Week surveyed the manufacturing performance management strategies, pro- cedures, experiences, and intentions of more than 175 enterprises in industrial equipment, metals and metals products, automotive, aerospace and defense, and other industries. Responding manufacturing, quality, finance, and logistics/supply chain executives com- pleted an online survey that included questions designed to determine the following: • The pressures causing enterprises to adopt manufacturing performance manage- ment strategies and their strategic actions for achieving performance improve- ment results • The structure and effectiveness of existing manufacturing performance manage- ment strategies and supporting IT solutions • Current and planned use of automation to aid these activities • The benefits, if any, that have been derived from manufacturing performance management initiatives Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on manufacturing performance management experiences, and results. The study aimed to identify emerging best practices for manufacturing performance man- agement and provide a framework by which readers could assess their own manufactur- ing performance management capabilities. Responding enterprises included the following: • Job title/function: The research sample included respondents with the following job titles: Manufacturing (52%); Quality (12%); Finance (10%); Logistics/Supply Chain (9%); Product Development (5%); and all other (13%). • Industry: The research sample included respondents predominantly from manufac- turing industries. Industrial equipment manufacturers represented 20% of the sample, and metals and metals products manufacturers accounted for 20% of respondents. Automotive manufacturers totaled 10% of respondents. Aerospace and defense ac- counted for 9% of the sample. Other sectors responding included consumer durables consumer, packaged goods, electronics and medical equipment manufacturers for ex- ample. • Geography: Nearly all study respondents were from North America, including 90% from the U.S. alone. Remaining respondents were from the Asia-Pacific region and Europe. • Company size: About 18% of respondents were from large enterprises (annual reve- nues above US$1 billion); 16% were from midsize enterprises (annual revenues be- All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 21
The Manufacturing Performance Management Strategies Benchmark Report tween $250 million and $1 billion); and 66% of respondents were from small busi- nesses (annual revenues below $250 million). Solution providers recognized as sponsors had no substantive influence on the direction of the Manufacturing Performance Management Strategies Benchmark Report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge. Table 5: PACE Framework Explanation PACE Key Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: • Pressures — external forces that impact an organization’s market position, competi- tiveness, or business operations (e.g., economic, political and regulatory, technol- ogy, changing customer preferences, competitive) • Actions — the strategic approaches that an organization takes in response to indus- try pressures (e.g., align the corporate business model to leverage industry opportu- nities, such as product/service strategy, target markets, financial strategy, go-to- market, and sales strategy) • Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products/services, ecosystem partners, financing) • Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management) All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 22
The Manufacturing Performance Management Strategies Benchmark Report Table 6: Relationship between PACE and Competitive Framework PACE and Competitive Framework How They Interact • Aberdeen research indicates that companies that identify the most impactful pres- sures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute. Table 7: Competitive Framework Competitive Framework Key The Aberdeen Competitive Framework defines enterprises as falling into one of the three following levels of manufacturing performance management practices and performance: • Laggards (20%) —Manufacturing Performance Management practices that are sig- nificantly behind the average of the industry, and result in below average perform- ance • Industry Norm (60%) — Manufacturing Performance Management practices that represent the average or norm, and result in average industry performance. • Best in Class (20%) — Manufacturing Performance Management practices that are the best currently being employed and significantly superior to the industry norm, and result in the top industry performance. KPI Frequency Effectiveness Definition Aberdeen defines KPI effectiveness by examining the frequency of measurement. KPIs with measurement frequencies that allow the users of those KPIs to be able to impact per- formance immediately or before problems actually occur are called “Managing.” This is typically within the day, daily, weekly, or in some instances monthly. Fast moving manu- facturing may require performance measured to the minute. KPI measurement frequency that is significantly after the fact and can impact only long term performance is called “Reporting.” All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 23
The Manufacturing Performance Management Strategies Benchmark Report Appendix B: Related Aberdeen Research & Tools Related Aberdeen research that forms a companion or reference to this report include: • Lean Strategies Benchmark Report (June 2004) • Outsourced Manufacturing Strategies Benchmark Report (September 2004) Information on these and any other Aberdeen publications can be found at www.aberdeen.com All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 24
The Manufacturing Performance Management Strategies Benchmark Report About Our Mission To be the trusted advisor and business value research destination of choice for the Global Business Executive. Our Approach Aberdeen delivers unbiased, primary research that helps enterprises derive tangible busi- ness value from technology-enabled solutions. Through continuous benchmarking and analysis of value chain practices, Aberdeen offers a unique mix of research, tools, and services to help Global Business Executives accomplish the following: • IMPROVE the financial and competitive position of their business now • PRIORITIZE operational improvement areas to drive immediate, tangible value to their business • LEVERAGE information technology for tangible business value. Aberdeen also offers selected solution providers fact-based tools and services to em- power and equip them to accomplish the following: • CREATE DEMAND, by reaching the right level of executives in companies where their solutions can deliver differentiated results • ACCELERATE SALES, by accessing executive decision-makers who need a solu- tion and arming the sales team with fact-based differentiation around business impact • EXPAND CUSTOMERS, by fortifying their value proposition with independent fact-based research and demonstrating installed base proof points Our History of Integrity Aberdeen was founded in 1988 to conduct fact-based, unbiased research that delivers tangible value to executives trying to advance their businesses with technology-enabled solutions. Aberdeen's integrity has always been and always will be beyond reproach. We provide independent research and analysis of the dynamics underlying specific technology- enabled business strategies, market trends, and technology solutions. While some reports or portions of reports may be underwritten by corporate sponsors, Aberdeen's research findings are never influenced by any of these sponsors. All print and electronic rights are the property of AberdeenGroup © 2004. AberdeenGroup • 25
The Manufacturing Performance Management Strategies Benchmark Report AberdeenGroup, Inc. Founded in 1988, AberdeenGroup is the technology- 260 Franklin Street, Suite 1700 driven research destination of choice for the global Boston, Massachusetts business executive. AberdeenGroup has over 100,000 02110-3112 research members in over 36 countries around the world that both participate in and direct the most comprehen- USA sive technology-driven value chain research in the Telephone: 617 723 7890 market. Through its continued fact-based research, Fax: 617 723 7897 benchmarking, and actionable analysis, AberdeenGroup www.aberdeen.com offers global business and technology executives a unique mix of actionable research, KPIs, tools, © 2004 AberdeenGroup, Inc. and services. All rights reserved December 2004 The information contained in this publication has been obtained from sources Aberdeen believes to be reliable, but is not guaranteed by Aberdeen. Aberdeen publications reflect the analyst’s judgment at the time and are subject to change without notice. The trademarks and registered trademarks of the corporations mentioned in this publication are the property of their respective holders.
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