View the organization as a whole.

In a tight or slumping market, the focus of large and small business is on tactical or short-term costs. However, businesses that tend to prosper during hard times are those that remain focused on strategic or long-term opportunities. Just one month after the horrific events of September 11th, Federal Reserve Chairman Alan Greenspan, appearing before a joint Congressional committee, expressed hope that the economic impact of these attacks was a one-time event, and that "withdrawal (of consumers from the marketplace) has been partial and presumably temporary." Experts agree the economy will bounce back, but business leaders need to drop the survivalist mentality and prepare to win over the long run. Unfortunately, many small businesses jump at the quick fix (massive layoffs or moving to smaller facilities), but the root cause of their business problems accompany them and their down-sized staffs into to their smaller offices. Companies looking for the quick fix or short-term solutions to any recent shortfalls o r down turns, will get stuck focusing on survivalist business symptoms.

Forget the quick fix

With every proposed business solution come either good or bad results. That's why companies are often disappointed in the outcome when they spend large sums on training and expert consultation that don't produce the desired benefits. Take a company that buys team building training, but fails to obtain the expected increase in production by its work teams. Could it be because parts needed by the department aren't coming out of inventory quickly enough, leaving the "trained" team idle much of the time? Or, what if a company pays for a beautiful Web site, yet no one sees it? Perhaps it's because the design simply doesn't attract browsers or takes too long to load. What do both of these problems have in common? They are both single-point solutions, inadequate because they only address a limited part of the company's problem, not the bigger picture. The management team or consultants who implemented them treated a particular symptom without addressing the root cause. Their single-point solutions didn't work in a complex environment.

Multi-point Business Solutions: A closer look

With increased global competition, companies are under extreme pressure to reduce costs while maintaining or increasing profit margins. "Leaning out" an organization, by cutting waste and non-value-added activities, requires a multi-point solution. A single-point solution produces inventory that costs money to store. A multi-point solution, incorporating just-in-time delivery, turns storage space into productive floor space with additional capacity to produce revenue. This allows for expansion into new markets, which means increased sales and profit margins, resulting in a significant impact on the bottom line.

A multi-point solution also considers the organization from different vantage points and considers the solution's potential impact on the additional processes. Integrated into the strategic plan, a multi-point solution includes a financial plan, a marketing plan and often a business plan--working in unison. As shown in the two following cases, the ultimate goal is to make money for the enterprise.

Multi-point Solution: Multiple Benefits

Chadwick-Helmuth Co., Inc., in El Monte, California, a company manufacturing aircraft monitoring systems, had grown to over $9 million in annual sales by 1997. The problem was that sales and profit growth were constrained by the company's ability to reduce costs and bring new products to market rapidly. "We believed that replacing our ten-year-old DOS-based system with a Windows-based system, with greater reporting capabilities, would better track raw materials usage so that inventory costs could be reduced," says IS Manager Elizabeth Vanture Cain. "Another goal was to provide improved communications between departments to help accelerate new product development."

It was more than simply defining information system requirements and selecting a system that best suited the company's needs. What Chadwick-Helmuth needed was a new software system that included a configuration and document control system to accelerate new product development. The system also had to become a significant marketing advantage because it would help the company in its efforts to meet international ISO 9000 quality system standards--a requirement of many of its customers and prospects. In addition, the company wanted a computer-based inventory and material control system to better manage inventory costs. After some initial research into standard single-point solutions, Chadwick-Helmuth soon realized that these multiple goals required a multi-point solution.

Their project began by assessing the company's information needs and determining system specifications. Cost-benefit analyses of potential systems led to the selection of a system based on optimum ROI. The company developed a detailed plan and implementation schedule, which included training of personnel in the new system's use and applications. An assessment of the company's configuration management and document control system followed, with the goal of developing a detailed implementation plan to bring the new system up to ISO 9000 equivalency standards.

"We now have better reporting and control of the business, increased information processing speed and more detailed information," says Cain. With a multi-point business solution, Chadwick-Helmuth realized multiple benefits. They reduced inventory expenses by $500,000 and realized $500,000 in annual labor savings.

Multi-point Solution: Proactive Efforts Bring Growth

Insulation Supply Company, located in Torrance, lost market share in the mid-1990s. Customers' business needs were in constant flux and company ownership was in transition when the need for a multi-point business solution became clear. The goal was to increase sales to existing customers and expand into new markets by utilizing its primary business strengths.

A multi-point business solution began with a 'Situation Analysis' to determine:

* Sales revenue, by product and market (To measure current vs. expected performance)

* Company strengths and weaknesses

* External environments affecting performance, such as competitors, suppliers and customers' future needs.

"We used the results of the Situation Analysis to develop a marketing plan that defined our revised marketing strategy and related objectives, including new customers," explains Robert Foster, the president of Insulation Supply Company. "The Analysis also provided measurements for each marketing objective and outlined a three-year strategy for achieving those objectives. A key element of the marketing plan included expansion into the medical equipment industry. We also created a new formal mission statement."

The company successfully expanded into the medical equipment industry and garnered a major new supplier. Annual sales increased by $400,000 and, by becoming more aware of customer needs, the company estimates it has retained $1 million in sales that otherwise would have been lost.

Growing companies also benefit from multi-point solutions. Rather than relying on a fire-fighting approach, they can be proactive. This means anticipating issues, using fewer resources and decreasing stress for everyone.

Avoid the band-aid approach

Marketing, in particular, is an area where companies often use a band-aid approach. Instead of simply hiring more sales people, achieving sales growth requires a multifaceted approach applied with expertise and skill. Avoid a penny-wise, pound-foolish "solution" by:

* Integrating the solution with the marketing plan. More salespeople won't help if marketing materials are of poor quality.

* Investigating target markets and conducting market research.

* Ensuring that production capacity matches expected market demand.

* Integrating the solution with the financial plan. How many initiatives can be supported at the same time? If money is spent on the marketing blitz, will it take needed capital away from investing in the new machines needed to produce the product?

* Integrating the solution with the strategic plan. A successful solution requires the right people, the right product and the right message.

The big picture

Everyone wants to simplify, but in many cases a simple solution ends up creating more problems than it solves. The only real solutions to the complex problems in today's manufacturing environment begin at the root cause and then integrate into the entire business process. A multi-point solution includes business partners who understand integration and suppliers who can work in alliance with the company's total system. Any company, regardless of size or industry, can increase profit margins with multi-point business solutions.

Sid Ward is a Director with California Manufacturing Technology Center. For further information, call him at [phone] or 800-300-CMTC (California only) or 310-225-3345, or visit the company's Web site at www.cmtc.com