Manufacturing Conference

2006

Architecting Excellence | A Foundation for Success

Creating Value: The Real Business of Manufacturing

Thomas M. NiesPresident and CEO

Cincom Systems, Inc.

Value Economics Cost, Revenue, Risk

Value Creation Different, First, Relevant

Value Delivery Market, Enterprise, Supply

n. Format of Value Vectors

Economic Value

First

Diff

eren

t Relevant

Generate Unique Value

Generate Unique Value: Rule 1 -- Be Different

Generate Unique Value: Rule 2 -- Be First

GenerateUnique Value: Rule 3 --Be Relevant

Integration

Inno

vatio

n Sim

plicity

Generate Unique Value3 Techniques to be Different, First and Relevant

Technique 1. Innovation

Man Tried Again … and Again

Finally, Success Convergence and Integration

35 Years Later … Commercial Success

Convergence and Integration of Many TechnologiesIncredible Complexity

Now we jet around the world

With Yet More Complex TechnologiesIntegrated to Create the End Product

Boeing 777 - Initiated 1990 / Launched 1995 Boeing 787 – Initiated 2002 / Launch 2008

33 Years Later … and Counting

With Different, Yet More Complex Technologies

Both in Space and On the Ground

• Diagram of “upside down U”

• Progressive Stage / Build Share• Complacent Stage / Preserve Share• Reactive Stage / Share Decline

Typical Product Lifecycle Demands Continuous Innovation

Radical InnovationT

ec h

no l

og y

Time

The Innovator’s Mandate

• Must kill off old ideas, technologies and competitors

– Open and eager to change and new ideas that deliver unique value

– Must have competence to develop new ideas

– Must have innovative technology support

The Innovative Attitude

• The magical, time sensitive combination of courage, creativity and commitment.

– The courage to change … to leave the familiar behind

– The creativity … to identify what is needed at a given time

– The commitment … to get it done, on time, while the opportunity is still fresh and profitable

Technique 2. Simplification

The objective of all business is to create value for customers and shareholders, but the biggest barrier most companies now face in delivering value is the complexity of managing their own businesses.

“My guiding light has always been simplicity. When I look at anything, I ask, ‘How can we simplify this and put a smile on your face when you use it?’ This is the question I ask myself and my team everyday.”

Bob Glass, CTO, Weaver Aerospace

Let’s look at how complexity grows

Not So Complex

No Integration Required

A Bit More Complex

Not Much Integration Required

Getting Out of Control

Required integration rapidly increasing

How did aerospace manufacturers solve this magnitude of complexity?

By Understanding The Law of Complexity

The Law of Complexity

The Number of Relations is Geometric

R = n2 - n

2 = (4 – 2) = 23 = (9 – 3) = 6

4 = (16 – 4) = 129 = (81 – 9) = 72

10 = (100 – 9) = 90

The Self-Destructive Impactof Complexity on an Organization

The Challenge is to Reduce theComplexity Gap

Seeking the Ideal State of Perfection

Reducing Complexityby Simplifying Methodology

Shifting from R = n2 – n to R = 2N

Technique 3. Integration

“The 777 consists of millions of objects of intellectual capital

flying in close formation.” -- Boeing

Many departments in one company, one goalMany companies, one goal

Value DeliveryValue Delivery

Putting it all Together

This is the Cincom Value Story

High Value. Low Cost.Rapid ROI. Low Risk

2006 Cincom Systems, Inc. All Rights Reserved

Developed in the U.S.A.

Cincom, the Quadrant Logo, and Simplification Through Innovation are registered trademarks of Cincom Systems, Inc.

All other trademarks belong to their respective companies.