Earlier this week NetSuite announced its latest strategic partnership with Autodesk to provide seamless integration between its ERP solution for manufacturing and Autodesk PLM 360. As NetSuite dives deeper into manufacturing, it is a logical move since the link between design engineering and manufacturing is a necessary one, although often a contentious one.
While MRP and its successor ERP have been regarded as necessary tools for manufacturing for decades, the truth is, early MRP and ERP solutions didn’t support the needs of the engineers very well. That set the stage for engineers to go off and do their own thing, often and very successfully avoiding any connection to other applications. If there was a connection, it was arm’s length. Engineers sent paper drawings and electronic bills of material (BOMs) over to manufacturing where they tended to take on a life of their own.
That might work well enough from a pure product design point of view. Yet in reality there is much more to a product life cycle than just design and manufacture… as well there should be. For example:
- Do you co-develop with customers or partners?
- Does marketing coordinate and collaborate with engineering on new product introductions?
- What about the list of suppliers of raw materials and/or components?
- What about the cost and impact of engineering change orders?
- Do changes made in manufacturing ever make their way back to the engineering design?
- Do you service and repair your products?
- Does customer feedback influence product innovation and design?
- How about feedback from service technicians or sales?
Of course it will take some discipline on the part of the NetSuite/Autodesk customers, but tight integration between ERP and PLM will remove many of the reasons engineers have struck out on their own to purchase and implement solutions. With this integration, product concept, design and engineering data are developed in Autodesk. Once released, bills of material (BOMs) are fed to ERP. Engineering can also suggest vendors from which to source component parts. But these need to be approved by purchasing within the ERP and confirmed back to PLM with a handshake.
Engineering change orders (ECOs) can also be managed with the same level of automation and control and gives the engineers added visibility to the impact on cost and profitability as well as capacity.
But probably more important in terms of change control is the bi-directional aspect of the integration. How often does manufacturing feel the need to tweak a design for manufacturing? Do those “tweaks” ever get communicated back to engineering? If not, the next change order from the engineers could be a nightmare. Integration ensures that changes are properly documented, propagated and managed in both PLM and downstream manufacturing.
The bi-directional integration can also have an impact on both quality and innovation. Without that closed loop from manufacturing back to engineering, there is an increased the risk the engineers can operate from an ivory tower. Quality issues are hidden without feedback from manufacturing operations and including suppliers in this feedback loop makes it that much more effective.
But NetSuite is also proposing the seamless integration will enable a cycle of innovation. In many industries, most notably in (but not limited to) consumer electronics, the expected life spans of products are shrinking. It’s not enough just to close the loop between manufacturing and engineering. It is equally important to capture feedback from customers and partners to understand customer acceptance. NetSuite is positioned to capture that feedback from CRM, service and PSA modules.
This is strictly a marketing agreement. NetSuite and Autodesk do not sell each other’s products. They will however work together on a deal. Expect them to work cooperatively and collaboratively.
And of course, it wouldn’t be an announcement from NetSuite without a reference to cloud. This partnership is unique in that both solutions were born in the cloud, designed specifically to be multi-tenant solutions deployed as Software as a Service (SaaS). So while it might be stretching it to say this was a marriage made in heaven, at least it is up there in the clouds.