I bought my first computer to crunch a database of names for a mail
order company I owned. But within several months of getting my first
Apple II running, I hooked the machine up to a telephone and had a
On the other side of the phone jack, an embryonic web stirred -- the young
Net. In that dawn I saw that the future of computers was not numbers but
connections. Far more voltage crackled out of a million interconnected
Apple IIs than within the most coddled million-dollar supercomputer
standing alone. Roaming the Net I got a hit of network juice, and my
Computers, used as calculating machines, would, just as we all expected,
whip up the next efficient edition of the world. But no one expected
that once used as communication machines, networked computers would
overturn the improved world onto an entirely different logic -- the logic
of the Net.
In the Me-Decades, the liberation of personal computers was just right.
Personal computers were personal slaves. Loyal, bonded silicon brains,
hired for cheap and at your command, even if you were only 13. It was
plain as daylight that personal computers and their eventual
high-powered offspring would reconfigure the world to our
specifications: personal newspapers, video on demand, customized
widgets. The focus was on you the individual. But in one of those quirks
reality is famous for, the real power of the silicon chip lay not in its
amazing ability to flip digits to think for us, but in its uncanny
ability to use flipped switches to connect us. We shouldn't call them
computers; we really should call them connectors.
By 1992 the fastest-growing segment of the computer industry was network
technology. This reflects the light-speed rate at which every sector of
business is electronically netting itself into a new shape. By 1993,
both Time and Newsweek featured cover stories on the fast-approaching
data superhighway that would connect television, telephones, and the
Sixpack family. In a few years -- no dream -- you would pick up a gadget and
get a "video dialtone" which would enable you to send or receive a
movie, a color photograph, an entire database, an album of music, some
detailed blueprints, or a set of books -- instantly -- to or from anyone,
Networking at that scale would truly revolutionize almost every
business. It would alter:
There is hardly a single aspect of business not overhauled, either
directly or indirectly, by the introduction of networking logic.
Networks -- not merely computers alone -- enable companies to manufacture new
kinds of innovative products, in faster and more flexible ways, in
greater response to customers' needs, and all within a rapidly shifting
environment where competitors can do the same. In response to these
groundswell changes, laws and financing change, too, not to mention the
incredible alterations in the economy due to global 24-hour networking
of financial institutions. And not to mention the feverish cultural brew
that will burst as "the Street" takes hold of this web and subverts it
to its own uses.
Network logic has already shaped the products that are shaping business
now. Instant cash, the product which is disgorged from ATM machines,
could only be born in a network. Ditto for credit cards of any stripe.
Fax machines, too. But also such things as the ubiquitous color printing
in our lives. The high quality and low cost of modern four-color
printing is made possible by a networked printing press which
coordinates the hi-speed overlap of each color as it zips through the
web of rollers. Biotech pharmaceuticals require networked intelligence
to manage living soups as they flow by the barrelful from one vat to the
next. Even processed snack foods are here to tempt us because the
dispersed machines needed to cook them can be coordinated by a network.
Ordinary manufacturing becomes better when managed by netted
intelligence. Networked equipment creates not only purer steel and
glass, but its adaptive nature allows more varieties to be made with the
same equipment. Small differences in composition can be maintained
during manufacturing, in effect creating new kinds of precise materials
where once there was only one fuzzy, imprecise material.
Networking will also inform the maintenance of products. Already, in
1993, some business equipment (Pitney Bowes's fax machines,
Hewlett-Packard's minicomputers, General Electric's body scanners) can
be diagnosed and repaired from a distance. By plugging a phone line into
a machine, operators at the factory can peek inside its guts to see if
it is working properly and often fix it if not. The technique of remote
diagnostics was developed by satellite makers who had no choice but to
do repairs at a distance. Now the methods are being used to fix a fax
machine, to dissect a hard disk, or to speed repair of an X-ray machine
thousands of miles away. Sometimes new software can be uploaded into the
machine to create a fix; at the very least, the repairman can learn
beforehand what parts and tools he'll need if he visits and thus speed
up the on-site repair. In essence, these networked devices become nodes
of a larger distributed machine. In time all machines will be wired into
a net so that they warn repairmen when they are flaking out, and so that
they can receive updated intelligence and thus improve while on the job.
The Japanese perfected the technique of combining well-educated human
beings and networked computer intelligence into one seamless companywide
network to ensure uncompromised quality. Intense coordination of
critical information in Japanese manufacturing corporations gave the
world palm-size camcorders and durable cars. While the rest of the
industrialized sector frantically installs network-driven manufacturing
machinery, the Japanese have moved on to the next frontier in network
logic: flexible manufacturing and mass customization. For instance the
National Bicycle Industrial Company in Kokubu, Japan, builds custom
bicycles on an assembly line. You can order any one of 11 million
variations of its models to suit your taste, at prices only 10 percent
higher than mass-produced noncustomized models.
The challenge is simply stated: Extend the company's internal network
outward to include all those with whom the company interacts in the
marketplace. Spin a grand web to include employees, suppliers,
regulators, and customers; they all become part of your company's
collective being. They are the company.
Cases in both Japan and America where corporations have started building
an extended distributed company demonstrate the immense power it
releases. For example, Levi Strauss, makers of jeans for the whole
world, has networked a large portion of its being. Continuous data flows
from it headquarters, its 39 production plants, and its thousands of
retailers into a economic superorganism. As stone-washed jeans are
bought at the mall in, say, Buffalo, a message announcing those sales
flies that night from the mall's cash register into Levi's net. The net
consolidates the transaction with transactions from 3,500 other retail
stores and within hours triggers the order for more stone-washed jeans
from a factory in Belgium, or more dye from Germany, or more denim cloth
from the cotton mills in North Carolina.
The same signal spurs the networked factory into action. Here bundles of
cloth arrive from the mills decked in bar codes. As the stacks of cloth
become pants, their bar-coded identity will be followed with hand-held
laser readers, from fabric to trucker to store shelf. A reply is sent
back to the mall store saying the restocking pants are on their way. And
they will be, in a matter of days.
So tight is this loop of customer purchase/order materials/make, that
other highly networked clothiers such as Benetton boast that they don't
dye their sweaters until they are on their way out the door. When
customers at the local chains start ringing up turquoise jumpers, in a
few days Benetton's network will begin dyeing more jumpsuits in that
color. Thus, the cash registers, not fashion mavens, choose the hues of
the season. In this way, hip Benetton stays abreast of the unpredictable
storms of fashion.
If you link computer-assisted design tools, and computer-assisted
manufacturing, then not only can colors be nimbly manipulated but entire
designs as well. A new outfit is quickly drawn up, made in low volume,
distributed to stores, and then rapidly modified or multiplied if
successful. The whole cycle is measured in days. Up until recently, the
cycle of a far more limited choice was measured in seasons and years.
Kao, a detergent and toiletry manufacturer in Japan, has developed a
distribution system so tightly networked that it delivers even the
smallest order within 24 hours.
Why not make cars or plastics this way? In fact, you can. A truly
adaptable factory must be modular. Its tools and workflow can be quickly
modified and reassembled to manufacture a different version of car or a
different formula plastic. One day the assembly line is grinding out
station wagons or Styrofoam, the next day jeeps or Plexiglas.
Technicians call it flexible manufacturing. The assembly line adapts to
fit the products needed. It's a hot field of research with immense
potential. If you can alter the manufacturing process on the fly without
stopping the flow, you then have the means to make stuff in batches of
But this flexibility demands tiptoe agility from multi-ton machines that
are presently bolted to the floor. To get them to dance requires
substituting a lot of mass with a lot of networked intelligence.
Flexibility has to sink deep into the system to make flexible
manufacturing work. The machine tools must themselves be adjustable, the
schedules of material delivery must turn on a dime, the labor force must
coordinate as a unit, the suppliers of packaging must be fluid, the
trucking lines must be adaptable, the marketing must be in sync. That's
all done with networks.
Today my factory needs 21 flatbed trucks, 73 tons of acetate resin,
2,000 kilowatts, and 576 man hours. The next day I may not need any of
those. So if you are the acetate or electric company, you'll need to be
as nimble as I am if we are to work together. We'll coordinate as a
network, sharing information and control, decentralizing functions
between us. It will be hard at times to tell who is working for whom.
Federal Express used to deliver key parts for IBM computers. Now they
warehouse them too. By means of networks, Federal Express locates the
just-finished part recently arrived in a FedEx warehouse from some
remote overseas IBM supplier. When you order an item from an IBM
catalog, FedEx brings it to you via their worldwide delivery service. An
IBM employee may never touch the piece. So when the Federal Express man
delivers the part to your door, who sent it, IBM or Federal Express?
Schneider National, the first national trucking company to have all its
trucks fully networked in real time by satellite, has some major
customers who deposit their orders directly into Schneider's dispatching
computers and who are billed by the same method. Who is in charge? Where
does the company end and the supplier start?
Customers are being roped into the distributed company just as fast.
Ubiquitous 800-numbers just about ring on the factory floor, as the
feedback of users shape how and what the assembly line makes.