Above the cloud: Strong focus on quality evolves in SaaS-enabled supply chain software
Roberto Michel, senior contributing editor (robertomichel@new.rr.com) -- Manufacturing Business Technology, 3/16/2009 10:20:00 AM
The big name in the Software-as-a-Service (SaaS) model for enterprise software delivery—Salesforce.com—focuses on customer management functionality, but that doesn’t mean SaaS stops at the front office. Some lesser-known vendors are offering SaaS solutions with a supply chain bent, covering processes such as supplier and quality management.
Among the newest vendors to enter this niche is SupplierSoft, a vendor of a broad-based solution for supplier and quality management whose offering is built on top of Salesforce.com’s SaaS platform and tools. According to SupplierSoft CEO Balu Sharma, this use of a proven cloud computing infrastructure, along with the suite’s breadth and its external collaboration focus, make it different from previous on-demand solutions that cover quality management.
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| “Companies don’t want shelfware in these economic times.”—Balu Sharma, CEO, SupplierSoft |
While users often start with just one module—e.g., for environmental compliance, corrective actions, or business-oriented modules such as supplier risk management—they can expand incrementally at low cost under a SaaS model, says Sharma. “Companies don’t want shelfware in these economic times,” he says. “They want to buy what they are going to implement first, and on-demand, pay for additional modules or users.”
While SupplierSoft is relatively new, it already has manufacturing industry users, including KLA-Tencor, a Milpitas, Calif.-based maker of equipment for the semiconductor industry. According to Edwin El-Kareh, a manufacturing design engineer with KLA-Tencor, SupplierSoft’s solution is being used to manage the movement of product definition data from the company’s engineering and production systems to systems used by a field-service organization.
The solution’s workflow and status visibility functions proved a good fit for overseeing these end-of-life tasks, says El-Kareh, especially because the tasks involve multiple organizations—including a team of engineers in India.
KLA-Tencor had first looked at the solution for material compliance, but when this need subsided due to a combination of regulatory exemptions and compliant components being readily available, says El-Kareh, the company decided to use SupplierSoft for the end-of-life product data management process.
“It didn’t take us long to realize that [SupplierSoft] offers a very malleable service,” says El-Kareh. “Keeping track of what everyone is doing in a distributed, global team is now very doable.”
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| While the Plex Online suite now consists of more than 350 modules to manage operations from the shop floor to the top floor, Plex Systems CEO Mark Symonds says a good starting point is quality management as a stand-alone solution. |
The SaaS model also allowed the solution to be tested at low cost, and without the type of approval scrutiny received by on-premise software. The performance of the Salesforce.com infrastructure also was a plus. “It has a really good user interface, a good security model, and is very scalable,” El-Kareh says.
Quality out in front
Two well established vendors of quality management software—AssurX and Pilgrim Software—have offered their respective solutions on-demand for years. According to Nikki Willett, VP of marketing with Pilgrim, its on-demand option was first offered about 2-1/2 years ago, and in 2008, the company saw its on-demand solution sales grow by 300 percent.
Tamar June, VP of marketing for AssurX, says its SaaS offering dates to shortly after 2000, when its on-premise solution became fully Web-based, after which the company began offering the solution on-demand. Today, says June, about 45 percent of its sales come from the on-demand model. The company even has one medical device customer that integrated the on-demand quality management solution with an on-demand ERP solution from NetSuite.
Another vendor involved with on-demand quality functionality is Plex Systems, which offers SaaS-based ERP, quality management, and production management software. In some cases, a customer will start with quality management as a stand-alone solution, according to Mark Symonds, president and CEO.
On-demand quality and supplier management isn’t exactly new, concurs Simon Jacobson, a director with Boston-based analyst firm AMR Research. “It’s not a whole new growth area—in the sense of whole new market—but it does continue to be an opportunity for vendors,” he says.
Jacobson cites SupplierSoft’s use of the Salesforce.com platform as a differentiator. However, he sees one of the strongest opportunities in on-demand quality functionality coming at the statistical process control (SPC) level, rather than higher-level workflows. At this level, InfinityQS offers an on-demand, Web-based SPC solution.
Michael Lyle, president and CEO of InfinityQS, says its eSPC on-demand solution is meant to allow a company and its supply base to proactively manage quality in near-real time. The solution has been on the market for about 1-1/2 years, says Lyle, but differs in focus from systems that manage procedures.
“[Our solution] is literally used on the production floor doing real-time quality monitoring,” explains Lyle.
Vendors differ in their definitions of what constitutes a SaaS-based offering versus something that’s delivered on-demand. Yet everyone involved with this niche agrees that with the pay-as-you go aspect of the model, solutions can be approved and deployed rapidly.
As El-Kareh at KLA-Tencor explains, a similar solution acquired under a traditional delivery model would likely require more IT costs and IT approvals. Concludes El-Kareh, “If we had tried involving the larger resources in the company, it never would have happened.”
