The right approach: Manufacturers’ desire for unique business process is spawning more niche-oriented software
As manufacturers focus more on creating unique business processes as a way of separating themselves from the competition, software vendors are responding with solutions that address specific user needs.
This has sparked several developments within the industry, such as a dramatic increase in the number of industry-specific applications on the market, and a shift in the roles of IT professionals.
“IT professionals are no longer just taking orders from business people; they must be business-savvy themselves,” observes Hussain Mooraj, research director of life sciences at Boston-based AMR Research . “They must understand that the infrastructures they are building have to support business processes.”
That means conversations between IT professionals and vendors are no longer limited to technical features and functionality, says Leif Pedersen, a VP with Siemens PLM Software .
Siemens PLM Software, a supplier of applications that support product-development processes, is one of many software vendors tailoring solutions to vertical industries.
“When you build an industry-specific solution, you get closer to the real opportunity that the manufacturing company has in that industry: potential revenue drivers, new market drivers, cost-reduction drivers, and business process drivers,” Pedersen says.
Charles Smart, president and CEO of Smart Software , says vendors that focus on industry-specific problems are indeed finding their solutions in greater demand. Smart Software offers a solution that caters to after-sales service organizations, specifically their need to manage the inventory of parts used in repair operations.
Some service organizations must manage thousands of little parts, many of them quite expensive. These parts must be on hand, but they don’t always move as regularly as other components.
“It’s called the intermittent demand and forecasting planning problem,” Smart says, “and we solve that problem with our technology.”
Peter Quinn, VP of worldwide marketing for Lawson Software , says globalization also has opened new opportunities for niche-oriented software vendors. “We have been talking for many years about the globalization of business,” Quinn says. “One of the implications of that is that when you move a manufacturing base to the Far East or South America, you bring in specific issues that you have to deal with, and they are not the same by industry.”
Quinn illustrates this by citing the food industry: If a food shipment arrives a week late, the consequences are very different than, say, if a container of automotive parts is delayed. In light of the various viral outbreaks that have made headlines over the last several years, traceability has become a prime function, one that may not be as crucial in textile manufacturing.
When Fitchburg, Mass.-based Micron Products started looking for a new ERP system, the organization’s IT team had two principle goals in mind: regulatory compliance, and the accommodation of a new business model that emphasizes growth through acquisition.
The new business model, in particular, introduced a number of issues, says Salvatore Emma, Jr., Micron’s director of technology.
With the help of Corning Data Services , an independent enterprise software reseller based in Greensboro, N.C., Micron selected a system from IFS .
Michael Pauley, general manager of the IFS business unit at Corning Data, notes that the IFS mixed-mode manufacturing functionality made the system a good fit.
“Micron had different processes from the various companies it was acquiring,” Pauley says. “We had to meet the short-term requirements of the companies already in place, but also put in place the capability to accommodate any new companies Microon would acquire.”
Dan Norrish, VP of IFS North America, says challenges like that will force vendors to keep fine-tuning their systems in line with user needs.