NetSuite Eyes Midsize Manufacturers

With a last-minute name change, NetSuite June 12 released a new version of its software-as-a-service ERP suite tuned for midsize manufacturing companies.

Called NetSuite for Manufacturers, the package is part of NetSuite’s effort to compete with SAP for small and midsize companies in vertical markets.

The time is right for NetSuite to release this package, said Mini Peiris, NetSuite’s vice president of product marketing, because SAP doesn’t have a manufacturing suite that is scaled for the budgets of most midsize manufacturers.

Nor does SAP have a SAAS ERP suite since it pushed back the release of its Business ByDesign by 12 to 18 months, and the SAP R3 ERP suite is well beyond the budgets of most midsize manufacturers, she said.

However, SAP strongly denied that it was behind in deploying vertical applications or that it was delaying the deployment of Business ByDesign.

“In the US market alone, SAP and our partners provide over 35 distinct SAP Business One and SAP Business All-in-One vertical solutions specifically geared to the business and resource needs of small and midsize manufacturers," Jeff Stiles, senior vice president of small and midsize enterprise solution marketing at SAP said in a statement.

"Moreover, the US continues to be one of the focus markets for SAP Business ByDesign, where we continue to steadily increase the number of customers we serve across industries, including manufacturing,” Stiles said in his statement. 

NetSuite decided to develop the manufacturing edition based on requests from potential customers and because the product already had application support for this vertical, Peiris said.

“We have always had strong inventory management capabilities and strong warehousing capabilities” in NetSuite, Peiris said. Because of this, the company built the core functionality to support manufacturing on top of the existing features, she said. This includes assembly management, work orders, bills of materials and demand-based inventory replenishment.

These functions are built in to ensure that the right parts and materials are always in place to allow the orderly production of any finished product.

Evaluating a SAAS vendor? Here's eight questions you should be asking. 

However, NetSuite officials made it clear that the package was designed more for light manufacturers who are mainly assembling relatively simple finished products from pre-manufactured parts, as opposed to heavy manufacturing, which starts with raw materials to produce the components to build complex products with relatively large numbers of parts.

In fact, in the last few days before its June 12 release, company officials were calling the product NetSuite for Light Manufacturing. However, apparently to expand the potential market for the product, NetSuite officials notified the media June 11 that the product would be called NetSuite for Manufacturers.

Will Gregerson, CEO of Schaeffer Manufacturing, a 169-year-old producer of lubricants, said the package in its current state is clearly designed for light manufacturing. Although he considers Schaeffer a light manufacturer, Gregerson said his background is in heavy manufacturing. NetSuite for Manufacturers is “still a fairly new product. It still has some things they need to improve on,” and it doesn’t currently have the features to support anything but light manufacturing, he said.

Schaeffer Manufacturing evaluated NetSuite along with SAP BusinessOne, Microsoft Dynamics GP and a HarrisData manufacturing package, Gregerson said.

His company selected NetSuite because it is a Web-based product and frees his company from having to support the software with Schaeffer’s IT resources, he said. The other decisive factor was that at its core NetSuite for Manufacturers is based on a CRM package.

That factor “really makes it easy to have all the information at our fingertips for each customer,” and it's customer orders that start in motion the whole manufacturing process, Gregerson said.

Schaeffer Manufacturing went live with the NetSuite package about six weeks ago and is still working through the implementation process. “Things are going OK,” Gregerson said. “Every implementation has its bumps in the road.” The company encountered a data migration glitch in which it couldn’t automatically move assembly items listed in bills of materials from the old system to the new system. This required a significant number of part numbers to be manually entered into the system, which takes time and mistakes inevitably occur, he said.

"[That’s a sign] that you still have a fairly immature product. But I think it was designed very well and it’s very flexible. We can customize just about every field to make it do what we want it to do,” Gregerson said.

NetSuite for Manufacturers is available online now for $999 per month and $99 per user per month.