ZBy David F. Carr | Posted 2003-01-17 Print
If it's possible for an office chair to create buzz, Herman Miller's Aeron did. But it's still counting on 3-D technology to juice sales.
-Axis and the Birth of SQA">
Z-Axis and the Birth of SQA
One of the most visible symbols of that transformation was z-Axis, which started life as part of Bix Norman's strategy to transform a subsidiary that was competing at the low end of the market, using remanufactured furniture to achieve a price advantage.
To get away from this bottom-feeding, he devised a strategy focused on offering small, growing businesses a basic selection of quality furniture, simplifying the sales and ordering process, and shipping orders quickly and reliably.
Unlike Herman Miller's big customers, these businesses didn't place the same value on high-end products with a vast range of options, but neither was cost the only factor. Thus, the new division was named SQA for "simple, quick, and affordable"—putting price third on the list after simplicity of service and speed of delivery.
Z-Axis became the entry point, the tool that dealer salespeople used to show customers how Herman Miller products fit together to meet a specific need.
What makes z-Axis work is that it's more than a drawing tool but does not require as much training or expertise as software aimed at engineers, architects and designers.
More about selling than design, the software offers a two-dimensional tool for laying out the office; a three-dimensional tool for presenting the result; and a bill of materials for all the Herman Miller products in that result—with their prices neatly totaled up.
If the price is too high, or the configuration isn't quite right, a sales representative can make changes on the spot rather than having to come back another day with new drawings and a new quote.
A Seattle company called Computer Human Interaction , formerly known as Lembersky/Chi after founders Mark Lembersky and Uli Chi, created the first version of z-Axis in 1992. Early editions of the software had to be run on specialized Tadpole Technology laptops, which featured high-powered Sun Microsystems processors and its Solaris operating system. Often that meant a dealership would have just one laptop to serve an entire sales staff.
Today, z-Axis runs on Windows and standard PC hardware, meaning it can be deployed much more broadly. Herman Miller gives it away to dealers and supplies it to facilities managers with some large customers. A freely distributed z-Viewer lets a customer view and annotate a z-Axis file e-mailed by a dealer.
Lembersky and Chi created their original sales aid for a previous employer, lumber giant Weyerhaeuser Co., to help market products for outdoor decks and home improvements.
When Weyerhaeuser cut funding, Lembersky and Chi came to Herman Miller looking for a new sponsor. While they initially got a "we'll study this and get back to you" response from a corporate committee, Norman, then president of SQA predecessor Phoenix Designs, heard about their visit from a friend in the information technology department.
"It was one of those weird coincidences, where I was looking for a technology to make the specification of furniture easier to do, and I'd actually written a business plan saying we should do something just like this," Norman says.
He intercepted the software developers, got a look at the deck design application and recognized that "the guts and basics were pretty close to what I wanted," he says.
As z-Axis matured, SQA's sales cycle—the average time it takes to close a deal with an interested customer—shrank from about 12 weeks to 12 days, and many salespeople reported securing orders within a day or two.
At the same time, SQA emphasized speed and reliability in every other aspect of customer service, production and order fulfillment. Factory systems were tuned to ensure that all parts of a given order were assembled quickly and ready for shipment at the same time, even if they were produced at different locations. Fulfillment capabilities were redesigned to ensure that every order would arrive on time and complete.
The use of z-Axis also helped with order accuracy because it enforced rules about the proper configuration of SQA products. This prevented SQA dealers from discovering at installation time that they had forgotten to order critical parts.
Because SQA did such a good job of building products to order and minimizing inventory, it earned comparisons to supply-chain paragon Dell Computer. "Herman Miller is a much less well-known story, but it's equally impressive," says David Bovet of Mercer Management Consulting, co-author of the 2000 book Value Nets: Breaking the Supply Chain to Unlock Hidden Profits (John Wiley & Sons).
Dell stands out because it turned what had been a build-to-stock business into a build-to-order one, giving visitors to its Web site the feeling of designing a PC specifically for their needs.
The office furniture business had a stronger tradition of tailoring the creation, delivery and installation of products to meet the needs of a specific customer, but the range of choices is also much greater than it is in the PC business, Bovet says. SQA figured out how to make the process simpler for customers and more efficient for itself, he says.
"It's a classic example of the skunkworks approach," Bovet says. Other executives at the company were initially skeptical of SQA's approach, but they allowed the experiment to proceed. Now that experiment has transformed the company as a whole, he says.
Custom applications included what former SQA Information Technology Director Jim Von Ins Jr. calls "a poor man's APS tool." That's a reference to the advance planning and scheduling capability that the parent company later implemented using software from i2 Technologies, the Irving, Texas, company that pioneered "supply-chain management" systems.
SQA employed an artificial intelligence tool called Aion (now owned by Computer Associates) to create an expert system derived from the knowledge of SQA plant managers. The system scheduled most production tasks automatically and identified issues.
For instance, if a date forecast by the automatic scheduling couldn't meet SQA's guarantee of delivery within two weeks, perhaps because a critical part was not in stock, a manager would be alerted to troubleshoot that order.
SQA operated so independently that it selected a different enterprise resource planning system, OneWorld from J.D. Edwards, while the parent company was busy implementing Baan. In each case, the ERP system was a linchpin for coordinating manufacturing and controlling finances, but SQA thought it had distinct requirements that dictated a different vendor choice.
Von Ins says he sold that decision on the grounds that SQA was a fast-growing operating company with a much simpler product line and different needs than Herman Miller as a whole. "It was also somewhat of a hedge because the Baan project was starting to stumble at that time," Von Ins says. SQA also adopted supply-chain software from SynQuest (now a unit of Viewlocity Inc.), while the parent company chose i2 Technologies.
But that degree of independence proved temporary, as Miller tried to implement what SQA had achieved throughout the company.
When SQA was integrated into the parent company in 1998, its technology lived on for a while as a separate fulfillment and production capability known as SCR (speed, convenience and reliability). But the last of the SQA production and supply-chain systems were retired over the past year, and Von Ins was laid off at the end of 2001. He has since co-founded a business called 2Think (www.2think.biz), which distributes SynQuest's software with custom enhancements.
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