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The last industry to move to the cloud

Zach Nelson is the CEO of NetSuite Inc.

SAN JOSE, CALIF. – Zach Nelson, CEO of NetSuite at the SuiteWorld conference revealed the last industry to move to the cloud. It’s manufacturing.

Nelson said that manufacturing is at the moment preparing to move to the cloud and believes that NetSuite is targeting the manufacturing sector “at the right time with the right products.” He introduced NetSuite’s next-generation cloud manufacturing solution in hopes to bring manufacturing to the cloud age.

NetSuite has been developing a solution for manufacturing for two years and this new release focuses on design on a single platform for both business-to-business and business-to-consumer. The new product will also have capabilities such as forecasting, pricing, tracking, and scheduling products.

Manny Buigas, vice president of Baass Business Solutions’ U.S. & Caribbean operations, said what NetSuite has done is fill in the missing components for manufacturing to go into the cloud.

“This is fantastic and it will complete the entire suite, while giving us a wider audience to offer our solutions too,” Buigas said.

In the past, NetSuite has addressed manufacturing from an outsourcing perspective, but Nelson said there is sea change happening in manufacturing today where more organizations are moving on-shore instead of off-shore. For example, Lenovo, a PC vendor with roots in China has decided to start building products in North Carolina to augment its manufacturing in Asia.

Another factor is with 3D printing. Nelson said breakthroughs such as 3D printing will create more on-demand designs.

“Manufacturing has been tied to ERP and this is a hair ball on steroids because they have manufacturing in Asia and the U.S., multiply that by the fact they have to go global quickly with suppliers and distributors,” Nelson said about the challenges manufacturing has had with getting to the cloud.

“The cloud at the end of the day is transforming everything and every company. Being a cloud company I believe we will transform manufacturing,” Nelson said.

The expansion of customer touch points such as smartphones and tablets only played a small part in forcing manufacturing to the cloud. Collaboration actually played a bigger role, according to Memjet director of IT Martin Hambalek. Memjet is a printer-head technology and components manufacturer based in San Diego and ideally they liked to work with design partners and suppliers that use the same software. “I can’t roll out software to all facilities some in Asia and some that are not mine and ask them to use this software. The cloud allows me to do that and it saves time and resources. You also do not have to open up your firewall to other people and enables you to collaborate without moving intellectual property to another company in building a new product,” Hambalek said.

Buigas added that this development will open up new market opportunities for Baass as they will now have the ability to offer manufacturing clients a choice. “It doesn’t matter if it’s a smaller company or a major player, this will help them in terms of speed to market and improve collaboration not just in their North American operations but the world,” Buigas said.

Roman Bukary, vice president of NetSuite’s manufacturing and wholesale distribution industry verticals, said manufacturers need to know their customers and supply network to protect their margins, while also being innovative. “They cannot have a boat anchor for an on-premise solution. The reality is that manufacturing has to be innovative and manage costs efficiently improving speed to market by moving the product lifecycle quickly. The cloud is a natural way to run this business because of the market pressures they face today,” Bukary said.

NetSuite also forged a strategic alliance with San Francisco-based Autodesk Inc. specifically for the manufacturing opportunity. The two companies will integrate Autodesk PLM 360 and NetSuite ERP.

The combined plan for NetSuite and Autodesk in manufacturing is to open up the cloud to this sector and reduce the high costs during the design phase, while trying to meet ever-changing customer demands.

Joe Arnone, CEO of Baass, who is attending the SuiteWorld conference to evaluate if they will make further investments in NetSuite, called the partnership with Autodesk critical. “A lot of companies are looking for lifecycle features and right now manufacturing does not have that,” he said.

The strategy behind the partnership is for bi-directional integration. The goal is to give manufacturing a single, closed loop solution for product design, overcoming errors and delays, increasing collaboration with suppliers and gaining a real-time view of costing and scheduling.