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NetSuite targets manufacturers
July 3, 2008
The first time I was contacted by NetSuite, about five years ago, they had an intriguing story to tell about offering ERP functionality in an on-demand, software as a service (SaaS) model targeting small-to-mid-size distributors.
Still, it wasn’t a story that was quite right for Modern’s audience. And while NetSuite took the time to keep me up to date on what they were doing, my response at the end of our calls was usually the same: “Come back when you have an on-demand warehouse management system,” I would tell them. “That’s where our readers live.”
A year or so ago, the company addressed that issue, offering on-demand WMS functionality from 7Hills. In keeping with NetSuite’s heritage, the solution targeted distributors and third party logistics providers. “So what are you doing for manufacturers,” I asked them at the time.
That question was answered a few weeks ago, when NetSuite announced a new vertical suite for manufacturing companies. Dubbed NetSuite for Manufacturers, the solution includes functionality for assembly, work order and bill of materials. The company touts the new offering as the first to include finanacials, CRM, ecommerce and manufacturing solutions in a SaaS offering.
But is it a true manufacturing execution system (MES), I wondered? Especially since MES is one of the fastest-growing segments of the supply chain execution space today and also one of the least developed. “We are not claiming to be a full-on MES solution,” says Mini Peiris, NetSuite’s vice president of product marketing. “But we do have a number of customers that do light manufacturing and assembly to order. Since this is our initial foray into the manufacturing realm, that’s who we’re targeting.”
That approach is encouraged by Simon Jacobson, a senior research analyst with AMR Research. “I think what they’re doing is a gamble and it’s going to be interesting to watch,” Jacobson told me last week. “This is not a production model MES application. Where it fits is in a low automation, low transaction and low complexity environment. They need to focus on that area and learn what their product is capable of doing before they go after a complex or high transaction environment.”
If NetSuite’s approach to distribution tells us anything, the company will move forward cautiously, learn from its early implementations, and improve functionality as it goes. “When you look at software as a service, there isn’t much out there for manufacturers,” Peiris says. “We’re going to use this to lay the ground work to eventually go from raw materials to finished goods.”
Has your company looked into on-demand software for distribution or manufacturing? If so, let us know what you’ve found by posting below or writing me at Robert.trebilcock@verizon.net
Posted by Bob Trebilcock on July 3, 2008 | Comments (0)