Manufacturing & Distribution: It’s All About the Cloud and Logistics

December 16, 2013

Recently I have seen a few wonderful articles about the state of the wholesale/distribution and manufacturing(opens in new tab) industries and the growth of the cloud.

One article from software strategist Louis Columbus(opens in new tab) highlighted recent Gartner research that found cloud computing (opens in new tab)was the third highest priority for CIOs for 2012 through 2015:

Interestingly, Gartner’s research found that manufacturing companies and distribution companies are about to accelerate their embrace of cloud and Software-as-a-Service (SaaS) technology:

To sum up the table, up to 32% of wholesale distribution companies will be using cloud technology within two to five years, while up to 10% of manufacturing companies will use the cloud. That’s impressive growth—especially when you consider that just a few years ago no one had ever heard of manufacturers running their business in the cloud. We are honored and humbled by the success of NetSuite customers such as GoPro winning the prestigious ML100 award for Game Changing Technology!

Meanwhile, traditional ERP vendors are trying to “SaaS(opens in new tab)ify” their applications, but trying to repurpose an on-premise application to run in the cloud is a losing proposition, as David Linthicum eloquently outlines in this GigaOM Pro article, “Why Enterprise Software Will Hit a Wall When Moving to the Cloud.” As David put it:

 “…existing enterprise software is locked into older structures and architecture that will severely limit that software’s ability to support features that are expected in cloud-based technologies.The heart of the problem is how traditional enterprise software deals with multi-tenancy and elastic scalability.”

Why move to the cloud for your business? The answer is to ensure business profitable growth, flexibility, and responsiveness to your customers’ requirements, a point well made by NetSuite customer Mountz Inc., a manufacturer and marketer of precision torque tools, control equipment, and measuring equipment, in a recent article by Area Development(opens in new tab). As company President Brad Mountz put it:

“We are able to link all of our subsidiaries and facilities with the cloud-based supply-chain software. It’s a strategic part of our business in order to leverage growth. I was tired of being held hostage by computer programmers. They did not add any value to our organization…they were a drag. Now we have better planning, budgeting, and control over the supply-chain process. We have eliminated bottlenecks and improved delivery with less overhead. We eliminated the non-productive assets and redistributed that cash flow toward assets that would re-emphasize growth of our business.”

The Area Development article concludes:

“Perfecting your supply chain can take many forms, but always involves strategic thinking and sharing of information. Management must take an overall view of the business and supply chain risks and rewards in order to perfect its supply chain network and reap the benefits.”

So, manufacturers and distributors are moving to the cloud and we are here to build great products and support our customers’ vision and goals. Enjoy the journey, it’s changing industries!

-Roman Bukary - AVP of Manufacturing and Wholesale & Distribution

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.

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