Manufacturers of all sizes are looking into hosted software for core supply-chain functions, such as demand planning and factory scheduling.
In a recent supply-chain spending survey, AMR Research found 26 per cent of companies are considering on-demand service offerings. Driving interest is the need among manufacturers for tools to streamline business-to-business processes across increasingly distributed supply-chain networks.
Going the software-as-a-service route lets companies avoid the capital investment and complex deployment associated with conventional licensed applications.
It’s a model that has done well in the CRM world. The success of NetSuite, Salesforce.com and Salesnet has influenced traditional software makers to tweak their lineups — including SAP, which unveiled an on-demand version of its CRM software earlier this year.
Web-centric environments are not new to manufacturers. Online business-to-business trading hubs peaked in the 1990s and some, such as E2open, thrive today as community marketplaces and hubs for tradingpartner collaboration.
But the hosted, multitenant software model is relatively new to the supply-chain world.
“The reason software-as-a-service has taken off in CRM but not in core supply chain is that a lot of supply-chain applications are computationally intensive,” says Mark Hillman, a senior analyst at AMR Research. Users traditionally have needed the speed and power of a client-server application, Hillman says.
That’s beginning to change. Broader availability of wireless and broadband has improved access and performance, while Web services APIs have helped streamline application integration efforts.
In response, vendors have built hosted applications that offer core supply-chain features such as distribution planning, contract management and factory scheduling — delivered over the Web.
JRG Software, which CDC Software acquired in February, is tackling one of the more computationally intense elements of SCM.
It offers Web-based factory planning and scheduling applications aimed at helping companies improve store fulfillment rates, trim order-to-production times and respond more quickly to demand fluctuations.