NetSuite Dives Deeper Into Supply Chain Management
Supply chain management (SCM) has not been Oracle NetSuite’s strongest suit to date, but the cloud ERP company has recently poured significant resources into beefing up this critical business area. NetSuite, which Oracle bought about a year ago, rolled out a slew of tools for managing complex supply chains at the recent SuiteConnect customer conference in San Francisco.
The most notable of NetSuite’s SCM offerings is an umbrella project called the Supply Chain Control Tower. The new offering, described in more detail below, is nearing the end of its extensive customer-test phase, and the company hopes to roll out the first release in February, said Gavin Davidson, director of product marketing for ERP, NetSuite.
The control tower was just one of many announcements at the show, part of the huge Oracle OpenWorld conference. In a global economy, these advanced manufacturing capabilities are particularly important for product companies—distributors, retailers, and manufacturers.
SCM systems facilitate the planning, movement, and storage of materials from the earliest stages of procurement through intermediate stages of production to final distribution to customers. Whereas ERP systems focus primarily on the internal operations of the business, SCM looks outward to encompass the activities of suppliers, customers, and partners (including contract manufacturers), as well as internally to the movement and storage of materials within the organization’s operations.
NetSuite also unveiled enhanced global bill of materials (BOM) functionality, a quality management solution coming in November, and an SCM portal that is moving through development and should be launched in around 18 months, Davidson said. In addition to the capabilities discussed below, many more are coming over that 18-month period, he said.
Supply Chain Control Tower
The idea of the Control Tower is to provide the manufacturer with visibility of inventory and movement of material across all supply chain locations, including vendors, subcontractors, and logistics providers. The tower encompasses four areas: The design area now includes, or will soon include, new product introduction and product data management, which includes functionality for engineering change orders and advance BOM features.
The planning area now includes (or soon will include) available-to-promise (ATP) calculations across multiple subsidiaries, along with a planners’ workbench.
The execution area includes (or soon will) functionality for quality management and traceability, along with better support for contract manufacturing. The fourth area, support, includes capabilities to manage product end of life.
Davidson said the Supply Chain Control Tower solutions have come about through extensive collaboration with customers and much feedback. “A lot of these things that we’re working on are solutions that we’ve built for other customers over the years … so it’s productizing some of that stuff,” he said.
Quality Management System
A new quality management system allows companies to define inspection plans that dictate how an item is to be tested, along with acceptable parameters and additional product details. The solution also includes role-specific dashboards for quality managers, engineers, and inspectors, along with a tablet-driven user interface for front-line workers.
The solution provides the ability to establish quality specifications and evaluate vendors against them. Customers can also evaluate and track vendor quality, contract manufacturing quality, and production quality. The response to the quality management solution has been so strong that NetSuite has decided to break it out of the SCM silo and make it available to anyone, said Dave Gustovich, AVP, Global Manufacturing Center of Excellence at Oracle NetSuite.
Bill of Materials Enhanced
NetSuite’s enhanced global bill of materials (BOM) functionality allows users to manage BOMs separately from the items they are associated with, reducing the overhead on engineering teams. Each item can now support multiple BOMs that can be specific to a location, should companies have locations that source components locally. Additionally, each BOM can be attached to multiple end SKUs, enabling manufacturers to sell the same item under different brands without the need to manage redundant BOMs when changes are required.
NetSuite’s new Inbound Shipment Management module allows customers who order large quantities of product—often from multiple vendors—to consolidate multiple purchase orders into a single container to simplify future tracking and status updates. Upon receipt, a single scan can receive all of the items in the container. The tool also includes a streamlined billing process.
The Bottom Line
Supply chain systems are complex, and organizations seeking to implement them often face challenges. A poorly run supply chain means missed order promise dates, inventory in the wrong places, and lost customers. Optimizing the supply chain is a high-payback opportunity for many companies. But SCM is not just a technology challenge. It requires a combination of best business practices, data management, skills development, and technology.
NetSuite is playing catch-up in the competitive SCM space and trying to combine a wide variety of new features into a complex product. If the Supply Chain Control Tower can live up to its promises, it will greatly increase the value of NetSuite’s system to customers in the manufacturing and distribution industries.