If you're debating the benefits of cloud-based computing, consider the experience of Data Physics Corp., a San Jose, Calif.-based manufacturer of vibration and sound testing and measurement products for a wide range of industries, from aerospace and automotive to electronics and engineering. Data Physics, which moved to the cloud more than 10 years ago, attributes its successful track record and steady growth to that strategic decision.
Back in 2003, the company was using a number of different software packages, including ACT! Goldmine for CRM, Microsoft Access databases, and Solomon financials. Such a wide array of systems meant that its business and manufacturing data, residing in different repositories, wasn’t integrated, nor was the workflow between systems. It was nearly impossible to have a complete view of its manufacturing and operational performance, which hurt the company's ability to track and control inventory--a crucial capability for any manufacturing firm hoping to optimize profits--as well as managing the production process and customer order management. Many tasks had to be done by hand. For example, work orders were processed manually and any data required in other programs from the work order had to be re-entered by the employee. That made it extremely difficult to track the status of orders.
Without better insight and analysis into performance and market opportunities, Data Physics couldn't successfully expand; and manual data entry was taking a big bite of the payroll, just as lack of inventory management capabilities was adding costs to production. Funds for expanding the company via marketing or product development were limited. In addition, the company had locations in six countries around the globe, making access to the different applications more complicated.
Management decided to make a major change and move off its multiple in-house applications and onto a single cloud-based platform, NetSuite’s cloud-based business management system. It was considered a risky decision at the time, when few companies had embraced cloud computing. Data Physics has been operating happily in the cloud ever since.
"NetSuite provides a platform that helps us gain efficiencies on the manufacturing side which we can then invest back into sales and marketing and R&D," explained Sabine Castagnet, Data Physics COO.
Today, Data Physics relies on NetSuite OneWorld for business management, CRM, sales and HR. The manufacturing capabilities of NetSuite runs all of the manufacturing specific processes, including work orders, assemblies, cost estimates, production change management, and bill of materials. The role-based customizable dashboards enable employees to know instantly if a problem appears or performance metrics are behind. The unified system spans Data Physics locations in Asia, Europe and North America, and has made it possible for the company to reduce costs and invest that money in growth. It’s able to track production using real-time data on orders, parts and costs, and more efficiently order and manage the multitude of components needed to make its products.
With cloud based computing, Data Physics has no need to maintain its own IT systems. That means no more servers or backup systems to buy and service, no local applications to upgrade, fewer IT employees to maintain the systems—and ultimately, a greatly reduced IT budget.
Those cost savings, along with the efficiencies gained from integrating processes and data, gave the company room to invest in new product development and market opportunities. It recently launched a line of large industrial shakers, used to test the durability of other products from cell phones to satellites.
"NetSuite’s manufacturing capabilities allow us to track materials and manage tens of thousands of inventory items," explained Castagnet. "All of the insight we gained into those manufacturing processes, and all the efficiencies in administration, let us invest in marketing and R&D.”
Between launching a new product line and increasing its customer base with big-name companies like Apple, Boeing, Exxon Mobile, and Toyota, Data Physics has quadrupled its sales – a feat that Castagnet attributes largely to its move to the cloud.
"We’re a very decentralized company,” she noted “and the fact that NetSuite was cloud based made it ideal for us.”
To learn more about Data Physics and its move to the cloud more than 10 years ago, check out this YouTube video:
- Ranga Bodla, Director, Industry Marketing, Wholesale Distribution and Manufacturing, NetSuite