minimal inventories of raw materials and parts. Rather than
sending an order for a month’s parts at a time as they had in
the past, the customers began telling BMC one day what to
ship on the next. BMC was provided with a blanket order for
planning, but the customers reserved the right to change the
amounts at the last minute.
Including the time to procure the raw materials, run
them through the presses to make the parts, clean and pack
them, and ship them out, BMC’s production process
requires at least two weeks if things go well. Thus the
automotive companies are forcing their suppliers to main-
tain their inventories for them, which places great pressure
on BMC to reduce its cycle times. Because of its two-week
production cycle and long setup times, BMC is often
forced to maintain a finished goods inventory that is
substantially above its target of a three-day supply.
About five years ago its automotive customers began to
pressure BMC to convert to electronic data interchange
(EDI), where all paper document flows between customer
and supplier are replaced by electronic flows directly between
the customer’s computer and BMC’s computer. Thus BMC
receives all purchase orders and shipping schedules electron-
ically and sends out electronic shipping notices and bills. EDI
has the potential to be quicker and more efficient for both par-
ties, but BMC’s factory computer systems were incomplete
and fragmented, so for several years BMC accepted the data
electronically, printed it out, and then rekeyed the data into
those relevant systems that existed. The IS department is now
building interfaces to enter the EDI data directly into some of
BMC’s systems. One reason for this delay was that their auto-
mobile customers use one EDI standard while their appliance
customers use another, and each customer has its own varia-
tion on the standard it uses. BMC has had to build a separate
subsystem to handle each of its customers.
Information Systems at BMC
BMC’s managers have been very receptive to the introduc-
tion of new technology. They were early adopters of
CAD/CAM, and are at the forefront of stamping technology.
However, they have had little experience with the use of
computers in business applications and have limited under-
standing of what the technology can do for them.
BMC got its first PCs in 1987, and a few managers
started experimenting with Lotus spreadsheets. One of the
first applications they set up was a spreadsheet for generating
customer quotes by calculating what price to charge for a
part based on estimates of raw material cost, tooling costs,
the costs of stamping, and the expected quantity to be
produced. Another early use of the PC was a scheduling
spreadsheet developed by the company president, Kyle
Baxter, when serving as vice president for manufacturing.
444 Part III • Acquiring Information Systems
This spreadsheet, which is still used today, contains data for
each part, including the machine used, the number produced
per hour, and the setup time. The quantity required and the
delivery date are entered, and the spreadsheet determines
when each part should be started into production and
generates a schedule of what should be run when on each
machine group. If the schedule is not feasible (e.g., some
parts must be started last week), the scheduler can make
manual adjustments in due date, quantity required, overtime,
and other factors to produce a feasible schedule.
Realizing that they needed someone to lead and
educate them in the use of computers, in 1989 BMC
management set up an MIS department and hired an MIS
manager, Nancy Shaw. BMC installed a Data General MV
minicomputer, and the first application was interoffice
e-mail. This was a great way to start because it demon-
strated how helpful the computer could be in sharing
information. According to Sue Barkley:E-mail was very well received because we were
growing so rapidly and the need to communicate
within the plant was so important. It wasn’t until we
got on e-mail that we realized how much time we
had been spending running around the plant trying
to find somebody and leaving little notes on their
desk. We really became dependent on our e-mail
system.During the next two years Shaw led the purchase and
successful installation of a package of financial applica-
tions, including payroll, accounts payable and receivable,
and general ledger. Also, in 1989 BMC was beginning to
encounter problems in production because of its growing
capacity problems and its customers’ switch to JIT. When
customers changed their requirements, the production
schedule had to be changed, which forced changes in the
schedules of other parts, and production people seemed to
be spending all their time rescheduling things. Because
demand was so near to capacity, it was difficult to get all the
orders done on time, and there was a lot of expediting going
on, which again led to the need to reschedule. Although
there was no computer support for manufacturing other
than the spreadsheet used for scheduling, BMC’s manage-
ment decided that if scheduling could be speeded up, the
problems would be alleviated. Consequently, the decision
was made to purchase a software package for scheduling.
Sue Barkley, who was involved in the process,
remembers:Our MIS manager, Nancy Shaw, did some research
and selected four packages from which we tried to
choose the best one. That was my first exposure