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Product Momentum
The Longmont lobby is something of a wheelchair showroom. An antique wicker model that looks like a deck chair sits in a corner. Nearby is a sporty wheelchair with slanted tires, which make it hard to tip over and popular for basketball games or tennis matches. Then there's the Quickie Shark, a sleek $15,000 hand-cranked bicycle, or "handcycle," as Sunrise calls it, for people who've lost the use of their legs but still want to ride.
"We make stuff you never want to use," notes Cooper. "Yet you really appreciate the product when you need it. The things we make really help people."
Not yet on view are the Quickie Rhythm and Groove, the company's latest power wheelchair models, which are just hitting the market. The wheelchairs were designed by engineers in the U.S., the U.K. and Germany and feature a modular base that can be reconfigured with front, mid- or rear-wheel drive, depending on local sidewalk conditions.
"It's the first real product designed from the ground up with this vision," Cooper says. "That's the way to success in this market, we think. It can be easily reconfigured for the markets we're going into. We've tried to design our business systems the same way."
The modular approach is key to the company's mantra: Design globally; execute locally. Over the past two years, that has meant that Sunrise has shifted from being vertically to horizontally integrated, moving its supply chain and manufacturing to Asia. Low-margin items such as crutches and walkers are made in China, and parts for virtually everything else come from there as well for assembly in various regional factories.
"In the mid-'90s, when Sunrise manufactured almost everything it sold, you could flex your shifts, add more people, react more efficiently to the marketplace," says Cooper. "Now you have to think three to six months out."
Integrating suppliers into the company's IT solutions is the company's next challenge. Sunrise's ERP rollout, which is scheduled to finish in 2008, should help. A single ERP system will replace 13 different systems. One measure of the deployment's pace is the fact that the original vendor has changed from JD Edwards to PeopleSoft to Oracle as each company was acquired by the next.
Ray Wang, an ERP analyst at Forrester Research Inc., says that Sunrise's approach is not without pitfalls, noting that it can be difficult to manage integration and data synchronization efforts back to the central system during software upgrades and patching.
"The biggest challenge is understanding the business processes and having change management in place," he says. "You can never underestimate change management. Especially in health care, the regulatory requirements will create a lot of customization in the apps. The regulations by different countries will kill you. You can't run a single instance. It's a big project, a difficult challenge, but it's not insurmountable."
But Cooper says Sunrise has already seen benefits from its consolidation strategy. The percentage of revenue spent on IT has declined by .4% in four years. In absolute terms, Cooper says the budget is 80% of its size seven years ago and has been flat for four years, while the department's head count has also declined and company revenue has reached almost $1 billion.
"It's a more demanding environment than it was previously, and we're doing it with less dollars and fewer people," says Cooper. "Most of our people were programmers or system administrators. Now we're moving more people into business analysis or client services."
Cooper says that the JD Edwards EnterpriseOne system will build a foundation for order management and lean manufacturing that will finally allow the company to leverage its far-flung operations into a true global enterprise.
"We thought globalization was inevitable for us as a business," says Cooper. "There are very few manufacturing/distribution businesses that are geographically limited to the U.S. anymore. All manufacturing companies are facing the same type of challenges we are: Is it the right thing to do to organize yourself as a global business? Are there companies out there taking other approaches, being insular with your business systems? We didn't feel that was the right approach. We're competing in a global market."
Michael Ybarra was a senior features writer for CIO Decisions. To comment on this story, email editor@ciodecisions.com.
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