Above the cloud: Strong focus on quality evolves in SaaS-enabled supply chain software

The big name in the Software-as-a-Service (SaaS) model for enterprise software delivery—Salesforce.com—focuses on CRM functionality, but that doesn’t mean SaaS stops at the front office. Here’s a look at up-and-coming vendors offering SaaS with a supply chain bent, including supplier and quality management.

03/16/2009


The big name in the Software-as-a-Service (SaaS) model for enterprise software delivery— Salesforce.com —focuses on customer management functionality, but that doesn’t mean SaaS stops at the front office. Some lesser-known vendors are offering SaaS solutions with a supply chain bent, covering processes such as supplier and quality management.
Among the newest vendors to enter this niche is SupplierSoft ,rnal collaboration focus, make it different from previous on-demand solutions that cover quality management.


“Companies don’t want shelfware in these economic times.”— Balu Sharma, CEO, SupplierSoft

While users often start with just one module—e.g., for environmental compliance, corrective actions, or business-oriented modules such as supplier risk management—they can expand incrementally at low cost under a SaaS model, says Sharma. “Companies don’t want shelfware in these economic times,” he says. “They want to buy what they are going to implement first, and on-demand, pay for additional modules or users.”
While SupplierSoft is relatively new, it already has manufacturing industry users, including KLA-Tencor , a Milpitas, Calif.-based maker of equipment for the semiconductor industry. According to Edwin El-Kareh, a manufacturing design engineer with KLA-Tencor, SupplierSoft’s solution is being used to manage the movement of product definition data from the company’s engineering and production systems to systems used by a field-service organization.
The solution’s workflow and status visibility functions proved a good fit for overseeing these end-of-life tasks, says El-Kareh, especially because the tasks involve multiple organizations—including a team of engineers in India.
KLA-Tencor had first looked at the solution for material compliance, but when this need subsided due to a combination of regulatory exemptions and compliant components being readily available, says El-Kareh, the company decided to use SupplierSoft for the end-of-life product data management process.
“It didn’t take us long to realize that [SupplierSoft] offers a very malleable service,” says El-Kareh. “Keeping track of what everyone is doing in a distributed, global team is now very doable.”


While the Plex Online suite now consists of more than 350 modules to manage operations from the shop floor to the top floor, Plex Systems CEO Mark Symonds says a good starting point is quality management as a stand-alone solution.

The SaaS model also allowed the solution to be tested at low cost, and without the type of approval scrutiny received by on-premise software. The performance of the Salesforce.com infrastructure also was a plus. “It has a really good user interface, a good security model, and is very scalable,” El-Kareh says.
Quality out in front
Two well established vendors of quality management software— AssurX and Pilgrim Software —have offered their respective solutions on-demand for years. According to Nikki Willett, VP of marketing with Pilgrim, its on-demand option was first offered about 2-1/2 years ago, and in 2008, the company saw its on-demand solution sales grow by 300 percent.
Tamar June, VP of marketing for AssurX, says its SaaS offering dates to shortly after 2000, when its on-premise solution became fully Web-based, after which the company began offering the solution on-demand. Today, says June, about 45 percent of its sales come from the on-demand model. The company even has one medical device customer that integrated the on-demand quality management solution with an on-demand ERP solution from NetSuite .
Another vendor involved with on-demand quality functionality is Plex Systems , which offers SaaS-based ERP, quality management, and production management software. In some cases, a customer will start with quality management as a stand-alone solution, according to Mark Symonds, president and CEO.
On-demand quality and supplier management isn’t exactly new, concurs Simon Jacobson, a director with Boston-based analyst firm AMR Research . “It’s not a whole new growth area—in the sense of whole new market—but it does continue to be an opportunity for vendors,” he says.
Jacobson cites SupplierSoft’s use of the Salesforce.com platform as a differentiator. However, he sees one of the strongest opportunities in on-demand quality functionality coming at the statistical process control (SPC) level, rather than higher-level workflows. At this level, InfinityQS offers an on-demand, Web-based SPC solution.
Michael Lyle, president and CEO of InfinityQS, says its eSPC on-demand solution is meant to allow a company and its supply base to proactively manage quality in near-real time. The solution has been on the market for about 1-1/2 years, says Lyle, but differs in focus from systems that manage procedures.
“[Our solution] is literally used on the production floor doing real-time quality monitoring,” explains Lyle.
Vendors differ in their definitions of what constitutes a SaaS-based offering versus something that’s delivered on-demand. Yet everyone involved with this niche agrees that with the pay-as-you go aspect of the model, solutions can be approved and deployed rapidly.
As El-Kareh at KLA-Tencor explains, a similar solution acquired under a traditional delivery model would likely require more IT costs and IT approvals. Concludes El-Kareh, “If we had tried involving the larger resources in the company, it never would have happened.”





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