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Plan of action

Plan of action

06/06/2011 | Channel: E-Business / IT, Business

Mike Novels, CEO of Preactor International, talks about supply chain thinking and the move towards ‘the cloud’

How did you get to where you are today?
I obtained an honours degree in Engineering Metallurgy at the University of Bath and started my career with Plessey Aerospace in the UK. After being involved with the formation of an engineering consulting start-up which developed its own robotic devices I embarked on a technical sales role where I trained distributors and installed robots in the UK, US, Japan, Israel, and Singapore. I then joined an Engineering Multi-national group, Hawker Siddeley. They had 120 companies in their group and I developed a team of consultants and engineers to provide automation systems within the group. Along the way we invested in a discrete event simulation software package from a leader in the field at the time based in the US. After selling and supporting this for ten years we then developed our own finite capacity scheduling software product, which today is the mainstay of our business. In 1993 Hawker Siddeley was acquired by BTR (now renamed Invensys after its merge with Siebe) and I led a management buyout of the simulation and scheduling business, which is now called Preactor International. I now lead of small but growing group of companies with headquarters in the UK and with wholly owned subsidiaries in the US, France, and India.

Could you explain what you do as a company and elaborate a little on the company’s history?
We are a leading supplier and developer of Advanced Planning and Scheduling (APS) software. This is used by manufacturing and service companies to optimise their production flow, become demand driven and more agile to react efficiently to changes in demand and capacity. We have more than 150 case studies prepared with end users showing that typical benefits include a 25 per cent increased efficiency, a 50 per cent reduction in work in process and on-hand inventories, and a dramatic improvement in on time delivery performance. We have more than 3500 companies using our products located in 68 countries. Since the very beginning we chose to develop an indirect sales model. We train and support partners which then sell and implement our product for end-users. We also have a number of collaboration agreements with ERP and MES companies where we supply our technology to be embedded in their own products. This model has enabled us to build a local language, local support ecosystem that provides resources for companies to make the most of our products all over the world.

A report by Gartner suggested that shop floor systems would be the fastest growing sector in manufacturing IT over the next ten years and this is proving to be close to reality. Since 1993 Preactor International has grown on average by 20 per cent year on year. This figure was more than 30 per cent in 2010 and we expect this to continue for some time into the future.

Can you tell me more about any current hot topics in the supply chain arena?
A recent survey carried out by Aberdeen Group reported that companies, which have ERP systems, considered advanced planning and scheduling as the most important feature that they looked for. Seventy-three per cent said it was extremely important and another 23 per cent said it was somewhat important, yet only 19 per cent had fully automated systems. Most used Excel spreadsheets or other non-specialised tools to do this work but were frustrated by the speed and capability.

What is at the top of your agenda at the moment?
The same as always – delivering world-class production planning and scheduling solutions to manufacturers to help make them more lean, agile and competitive. As our global presence has increased however, it has become increasingly clear that manufacturers in different countries have different levels of awareness of the benefits that planning and scheduling can bring them. They invariably know the pain points in their own business but not necessarily identify the root cause of these to be planning and scheduling related. Education is therefore always important for us and this is why we place such great emphasis on our huge resource of case studies. In all probability, if a customer has a pain point somewhere which they don’t immediately recognise as being remedied by a planning and scheduling solution, we will have a case study showing how this was done and the benefits that were achieved.

Are there any big challenges that you are currently dealing with ?
The big challenge for a company of our size is how to take the next step to grow the business. Our indirect model provides big advantages over our competition in terms of presence ‘on premise’ (partners who can visit end users and assess their needs) rather than ‘in the cloud’ to coin a phrase taken from another growth area. However some markets need a local presence and local employees. This would include China where there is a huge market for Preactor.

What do you think is the most misunderstood part of ‘supply chain thinking’?
Probably that the ‘Supply Chain’ is more than just organising the supply of materials into the company and the delivery of product to customers. The internal supply chain is just as important. There is commonly a disconnect between purchasing, sales, production and distribution within a company even across companies within a group. There is a huge advantage in for example synchronising the purchasing or raw materials with a production plan that has been generated with all the constraints taken into account. Instead of using lead times to decide when you need to buy materials, companies using APS solutions can order them when they ‘know’ an order or batch will be released to the plant for manufacture.

What do you predict will be the ‘next big thing’?
Probably the cloud. Smaller companies will choose to ask others to run their applications on servers that do not reside inside their plants. Multinationals will choose to run their applications ‘on premise’ or ‘in the cloud’ or even a mix of the two based on requirements of each plant.

Do you still enjoy working in this industry?

It’s an extremely satisfying business to be in. Every time I see a case study on how our software has been used, often in many different and innovative ways, I feel a little bit of pride in the team working in my company as well as the partner that implemented it. Partner after partner who come to our annual meeting every year comment on how they feel they have joined a family rather than group of system implementers.

If you could pass a piece of your wisdom to my readers, what would it be?
When you select a piece of software ask the vendor to show it working with your data. If you are building a scheduling tool make sure someone from each area of the business has an input on how your manufacturing works. You would be surprised how many times people in the same business have completely different views of how they make their products and what the real issues are!

For more information, visit: www.preactor.com