IBM i Trading Punches In The Automotive Supply Chain
August 7, 2017 Dan Burger
Manufacturing in the U.S. is experiencing some drastic changes. In the supply chain, IBM’s midrange computers have been a controlling force. The automotive supply chain is a great example. But are the wheels coming off this legendary IT platform? Future-thinking tier suppliers are brain wrestling with the question of whether to modernize or migrate.
There is a combination of technologies, architectures, and costs to balance. And then there’s the wild card of partnerships, trusted advisors, customer feedback, and corporate mergers and acquisitions that factor into decision making. How is the IBM i faring in this sea of change?
It seems that IBM i is not as dominant as it once was. Less than 10 years ago, first and second tier automotive parts manufacturing was largely IBM i-based. The installed base, however, is eroding. Migrations to SAP and Microsoft AX (formerly Microsoft Dynamics) running on X86 are increasing at the expense of IBM i and traditional ERP systems such as MAPICS and Future 3. Infor rebranded MAPICS as XA years ago, but it is still widely referred to as MAPICS. It also rebranded Future 3, giving it the name AutoRelease. (It’s part of the Infor Automotive Essentials suite of products developed specifically for the automotive industry.)
That’s strange because the system when teamed with ERP from software vendors such as Infor, Epicor, JD Edwards, SAP and others has helped companies in the automotive supply chain reduce inventory, provided more accurate and timely inventory accounting, reduce transportation costs, reduce line stoppages due to material availability, reduce shipping errors, and improved response times. In short, it provides the most desired benefits of a smooth-running supply chain. It has a proven track record for performance.
“I’ve seen companies making ERP changes because it can be run cheaper and better on another system. But I’ve never actually seen a migration turn out to be cheaper or better,” Laura Ubelhor told IT Jungle in a phone interview last week. Ubelhor is the owner and a senior consultant of Consultech Services, which advises manufacturers in the automotive supply chain. “One result that companies often realize after the fact is that they have less functionality than the previous system provided. In the procurement process, functionality is overlooked. The implementations are typically a lot longer with a lot more resources dedicated to the implementations. And when it is done, it takes a lot more people to support it.”
She points out the EDI component in SAP is a weakness and that the amount of customization that most companies have often creates problems that are underestimated or ignored during the process that leads to an ERP system migration. She’s seen a company become mired in a seven-year migration from MAPICS to AX that’s yet to be completed but has proved that the AX system is not robust enough to match the previous system’s custom-built capabilities. In the meantime, her company was called to support the MAPICS system that was hobbled by a lack of upgrades for many years. Another company, this one with an SAP on X86 migration plan, was two years into the project when it indefinitely postponed the project and returned to running JD Edwards on IBM i.
Despite the predictable chaos, companies continue to chase the ERP rainbow as defined by SAP and Microsoft leaving IBM i and IBM i-based ERP to the automotive supply chain players with strong ties to the i and perhaps a recognition that what they have has served them well. However, the exodus continues and neither the ERP vendors nor IBM seem capable of stopping it. Infor and JD Edwards have large IBM i installed bases, but both emphasize non-IBM i solutions in their product portfolios. Therefore, little effort is exerted to explain the benefits provided by the IBM i
This is a problem for IBM i. Much of its so-called marketing strategy has been pushed onto the business partners, including the software vendors. IBM has not been successful getting the ERP vendors with large IBM i installed bases to promote IBM i. Back in the day, vendors had much closer ties to the IBM midrange.
There’s another dynamic involved in the automotive supply chain. Mergers and acquisitions on a global scale has shifted the IT decision making to a different set of executives, who in many instances are unfamiliar with IBM i.
“It’s not just the faithful that needs to hear the IBM i message. It needs to be delivered to an audience that does not know or understand the i,” Ubelhor says. “Will IBM and IBM i ERP vendors step up to the challenge?”
In 2008, IBM produced a report titled The Smarter Supply Chain of the Future. The conclusion of that report noted a globalization trend and advised organizations to take heed:
“Currently, automotive companies are embroiled in a worldwide industry transition. Nearly everything about their businesses is changing – their products and services, where and how they’re sold, the degree of governmental involvement, even the fundamental business models of the industry. At the center of this massive change is the automotive supply chain. For automotive companies, emerging from this period of transition as healthy, vibrant businesses depends in large part on how their supply chains adapt. Greater speed and efficiency will help, but won’t be enough. Automotive supply chains need fact-based intelligence to predict which future scenarios are most likely to occur – and the flexibility to get repositioned before they do. Now more than ever, smart wins.”
Modernize or migrate: Are organizations smart enough to win regardless of the choice they make?