For Software Modeling Firm, Seeing Is Believing

An ambitious company president pushes to double his firm’s U.S. federal business.

If his eyesight had not failed him, Scott Dixon Smith might never have embarked on a career in technology, let alone one supplying visualization software to corporations and federal agencies. In fact, even before he entered college on a tennis scholarship, Smith already had charted a completely different course.

Politics was his passion and his first choice in professions. That is one of the reasons he decided to major in political science at Westminster College, a private liberal arts college in Fulton, Missouri. The school is about half an hour from the Missouri capital of Jefferson City, the center of the state’s political life. More importantly, having grown up just a couple of hours east in Bellville, Illinois, Smith was all too familiar with Westminster’s unique role in U.S. political history.

Some of the greatest thinkers and political leaders of the late 20th century spoke at Westminster. Perhaps none had as dramatic an impact as Winston S. Churchill, who delivered his famous “Iron Curtain” address there in 1946 that warned of the perils of communist totalitarianism descending over postwar Europe.

But it was while he was on the tennis court that the idea  his life might be taking a major detour began to form for Smith. After playing on the Westminster team for two years, Smith found his game starting to slip. Despite what his coach said, Smith was not just hot-dogging around—he could not focus accurately on the ball.

With his vision becoming increasingly blurred, Smith went to a doctor and was diagnosed with a genetic visual disease known as retinitis pigmentosa. The condition is marked by a progressive degeneration of the retina that causes a wide range of visual problems such as night blindness or loss of peripheral vision and often leads to total blindness.

Today, the legally blind Smith is a leader in the field of simulation software that helps large organizations improve their operations. He serves as president of the U.S. subsidiary of the Lanner Group Incorporated, a British technology concern, and is determined to increase the size of the company’s business with U.S. defense and civilian agencies.

The 45-year-old Smith is polite and soft-spoken but appears to be a hard-charging executive; he says he learned long ago how to get by on five hours of sleep a day—or less. He credits his visual impairment for his career path and for at least part of his determination to succeed. “It has probably driven me to go as fast as I can and to appreciate all that I can each and every day because I know that tomorrow is never promised,” Smith says from the company’s Houston headquarters. “I have to make the best of what I can, and that’s driven me.

“When I was leaving college, I asked myself did I really want to go on from there [into politics] or did I want to get into the business world? And I realized that going into the business world was really the thing for me in trying to make a name for myself, not knowing how soon I was going to lose my vision completely or the path that it would take. I felt that I needed to get started right away.

“Now, it [the condition] has gotten to the point where I’ve got both whiteout and blackout, and shades of gray and I’ve got tunnel vision. It’s like I’m looking into small binoculars, and you could say it’s kind of kept me focused,” he relates.

In joining Lanner in May 2003, Smith says he was attracted to the small company because he believed it was at least a year ahead of its competition in the rapidly evolving field of business process management software tools that allow large organizations to simulate a wide array of input and output variables. These could include personnel, supplies or manufacturing techniques that can predict outcomes based on static or dynamic models. For instance, an auto company using Witness, Lanner’s main product, can color code various machines to show where there is a blockage in the system or to reveal a breakdown.

Taking that one step further, users can add on three-dimensional capabilities for an even more accurate simulation of the production process that creates a virtual reality tour on the computer screen. Lanner says Witness allows customers to produce visually appealing, accurate and graphics-rich reports that greatly aid decision making about a wide range of customer projects.

This capability helps explain how Smith closed a deal in early May to provide an enterprisewide licensing agreement for Witness with Ford Motor Company. Thus, employees of Ford and its subsidiaries around the globe will have access to Lanner’s simulation software for use in areas such as stamping plants, engine shops, tool and die, fabrication, design and assembly-line management.

Smith says Witness is playing an integral role in the U.S. Army’s effort to refurbish more than 1,200 UH-60 Black Hawk helicopters. Officials say this is one of the larger projects ever undertaken by the Army’s Redstone Arsenal in Huntsville, Alabama.

The software dashboard helps Army personnel coordinate work done by parts suppliers, helicopter maker Sikorsky Aircraft Corporation and the military units providing the helicopters. Army officials say the ability to simulate the work is critical because they cannot fall behind schedule and need a way to track key metrics of performance, such as parts turnaround times and production throughput, as well as a way to estimate the impact of parts or labor shortages.

Smith says most of the major agencies within the U.S. Defense Department are Lanner customers. The U.S. federal market represents about 20 percent of the U.S. subsidiary’s business. He would be surprised if in the next three to five years Lanner could not double that figure to 40 percent and also double company revenues from federal work, he notes.

Meantime, he is targeting technology contracts that are becoming available from the U.S. Department of Homeland Security. Last March, he hired a new federal sales manager to help in that effort. Smith says Lanner will grow its federal revenues because nearly every major agency is working to improve the visual display of critical data needed to make better decisions faster.

“The federal market is very exciting for us right now,” he maintains. In fact, he believes the federal market will be one of the company’s larger growth areas. His opinion is based on several different government initiatives that highlight simulation technology, and he is encouraged by the move toward using simulation capabilities prior to making decisions or acquiring products.

“I believe that the White House management objectives are key. I think where we’re seeing part of the growth that’s very exciting is in the Defense Department and in homeland security where there is a combination of traditional discreet event simulation and what I would call dynamic simulation that drives process performance management. And I see that as part of the continuing growth that will continue to expand.

“Seeing is believing. Part of simulation—and the strength that we also have—is the virtual reality aspect. And so not only can we tie the numbers together to the process model, but also we can give you the visual aspect. That just really solidifies a deeper and clearer picture of what is happening and/or what could be happening in the future,” he offers.

Founded in 1996, Lanner is a closely held private company that resulted from a spin-off of AT&T Istel.

The company makes little in the way of financial data available, saying it is proprietary. For instance, the amount of venture funding that came from a European investment concern has not been disclosed. But Smith says the venture funding occurred as part of the spin-off nine years ago and that the company has remained self-sustaining based on operations ever since.

With senior management still maintaining voting control and the company funding its own growth through operations, Smith notes that Lanner officials see no need to go public any time soon.

Though he will not provide the exact figure, Smith acknowledges that Lanner’s annual growth rate is in the double digits, meaning it could conceivably double in size every five to seven years. Business analysts say this is a benchmark for high-growth technology companies. Lanner’s U.S. operations constitute roughly 20 percent of the parent company’s revenues.

Besides the federal market, Lanner targets such key industries as automotive, chemical and pharmaceutical, energy, finance and health care. Lanner’s Web site and marketing materials are replete with case studies of satisfied customers. For example, Nissan produced three car models on two assembly lines, a rarity in the auto industry. The car company used Witness to integrate production of the new Almera hatchback into an existing two-model plant. Witness showed Nissan how to optimize the body shop schedule, improve paint shop throughput and reduce trim bottlenecks. These changes enabled Nissan not only to produce three models on two assembly lines but also to increase production of all models.

Another example is GuinnessUDV, makers of the popular stout and other beverages. The company realized multimillion-dollar cost savings in a packaging process. It used Witness to develop a customizable packaging model to improve the efficiency of several lines. Within its first three months of operation, the simulation model helped GuinnessUDV justify the cost of a $600,000 shrink-wrapper and avoid millions of dollars in overhead by showing that a mid-line buffer would not achieve expected results.

In addition, Lucent Technologies saved $8 million by using Lanner’s software to evaluate options for improving the process of manufacturing printed circuit boards for a new network processor. The Witness simulation showed Lucent engineers how they could improve routing-logic and board-testing procedures to increase productivity by 50 percent, eliminating the need for a planned third shift.

An avid art collector with holdings valued at $1 million that include a Picasso and a Renoir, Smith is no stranger to quality control issues. From 1989 to 1991, he served on the Malcolm Baldridge National Quality Control Committee and is a certified examiner for that group. He also is considered a Deming Fellow, a reference to the noted expert who used statistical probability to provide Japanese automakers with quality breakthroughs that later helped them take market share from U.S. companies.

Although he has worked for corporate behemoths IBM and Xerox, Smith says he likes to keep entrepreneurial edges sharp. In 1992, he co-founded Holosofx Incorporated, an international software company based in El Segundo, California, that IBM acquired in 2002.

Smith devotes some of his energies to issues involving the disabled. He started as an adviser on disability to the governor’s office in Missouri and later served on committees in the Ronald Reagan and the George H.W. Bush administrations. He currently is affiliated with a foundation that helps people with retinitis pigmentosa and advises corporations on sensitivity toward disabled workers.

In a sense, his charitable contributions dovetail with his work at Lanner. Both involve helping people see better and giving them a different point of view.

Web Resource
Lanner Group Incorporated: www.lanner.com