LAN of Opportunity
Four business people tell how they selected their local area networks and offer advice in the selection process.
Networks do more than help you share data and printers. They can transform your business
How's this for a low-cost networking solution? In 1990, long on ambition but short on cash, Pete's Brewing Co., in Palo Alto, Calif., shelled out $150 for a wheeled typing cart and plunked a PC on top of it. Then came the tricky part of the configuration -- deciding who in the specialty-beer company's three-person accounting department would get first dibs on the machine.
As an information- and resource-sharing device, the network-on-a-cart was, of course, limited. It usually started its days in the office of the clerk who input distributors' orders for Pete's Wicked Lager or Wicked Ale. When she was finished, she'd roll it over to the person who sent out invoices. Eventually, the thing would end up beside the desk of chief financial officer Jim Collins, who handled the general ledger. "Back then we used our credit cards to buy things," recalls Collins, "so it was difficult to contemplate sinking $25,000 into a network."
Many high-growth companies today are similarly hamstrung because they don't have the cash to buy a real network. Indeed, "sneakernet" -- carrying data on floppies from one PC to another -- has become the de facto networking protocol for small business.
But money is not the only obstacle. Although most entrepreneurs are unfazed by setting up a PC and loading application software, the technical complexity of choosing and installing a local area network (LAN) scares many off. Peer-to-peer or dedicated server? Which network operating system? What about dependability? Will the applications run fast enough? Will we need an MIS department to run it? What about security? To the managers of small companies, questions like these lead to migraines, not to improved margins.
Still, heartening news is coming back from companies on the networking frontier. Sure, some have taken a few arrows in the back. But the pioneers also have discovered that LANs do a lot more than allow employees to share files and printers and send E-mail. They can open up all sorts of business opportunities.
* * * Virtual brewing
At Pete's Brewing Co. the infernal cart is still in Collins's office, but it has been relegated to a more appropriate role -- today it's a plant stand. Nearly all 40 of the employees at Pete's headquarters now have a 486 PC on their desks, and the company's production and accounting information travels over fiber-optic cable that snakes through the two buildings' five floors of offices. Since installing its 50-node No-vell NetWare LAN in 1992, Pete's has become by far the fastest-growing company in its market segment. Sales in 1994 reached $33.6 million, nearly triple the previous year's revenues.
Coincidence? Not according to Mark Bozzini, Pete's president. "Our ability to manage information has separated us from a lot of our competition," he says. A former Joseph E. Seagram & Sons marketing executive, Bozzini was hired in 1989 to take over day-to-day operations.
Smart production planning is essential in the beer business, a proverbial hurry-up-and-wait endeavor. Making a batch of Pete's Wicked Ale, for instance, takes up to 40 days; once bottled, the product loses its freshness in a couple of months. Back when order-entry people were queuing up to take turns on a single PC, there was little hope of running the brewing company as a just-in-time manufacturing operation. Says Collins, "Orders drive our production, but we couldn't get the data in the computer fast enough to forecast beer requirements."
The network allows several people simultaneously to tap into Pete's PC-based accounting system, Computer International's CA-Accpac/2000, and to tackle the 300 orders that come in from wholesalers each month. More than just data-entry clerks, the folks who used to queue up now have the time to analyze orders before they're filled, and they're counted on to spot ways to optimize production and shipping. Thanks in good part to improved information sharing, today Pete's excels at what Collins calls "the freshness business," turning its finished-goods inventory 20-plus times a year.
Meanwhile, Collins and Bozzini, both self-proclaimed information micromanagers, can quickly pull up reports on raw-materials costs, market-share shifts, and sales projections -- without leaving their offices. "We don't run out of packaging material or get caught with an unforeseen increase in sales," says Collins. Nor do Pete's wholesale customers run out of stock very often.
But the next time you're in Palo Alto, don't go looking for a brewery tour at the company's headquarters, at 514 High St. Since it opened, in 1986, Pete's has functioned as a kind of virtual brewing corporation, producing all its beers and ales under contract in St. Paul, Minn.
A wide area network (WAN) zaps E-mail, using Lotus Development's cc:Mail, back and forth between brewery and headquarters. Workers in St. Paul can now check order and inventory data on the server in Palo Alto. Data usually flow so fast over the 56-kilobit connection that users feel they are connected to a server down the hall, not one 2,000 miles away.
How did Pete's make the quantum leap from cart to far-flung enterprise networks? Pete's built its LAN the way most small businesses do: it hired a network consultant. Collins reports that the vendor, Chris Spence of Edge Information Systems, in San Jose, Calif., asked a lot of questions about the business before uttering a word about network interface cards, hubs, or open data-link interface (ODI) drivers. One of the most important questions: How fast do you expect the company to grow?
