Back To Basics?


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Manufacturing is a complex topic with many different kinds of needs that require all kinds of fancy, highly specialized applications that can meet high performance needs. Right? Not quite, says Grant Fraser, owner of Navigator Business Solutions, a Salt Lake City VAR that resells SAP's Business One.

"When I look at other manufacturing systems, they have 30 years of feature functionality, and while that is great, I find most customers don't need all that. They just want a more streamlined, easier to use system versus these big things that take months and months to implement."

Although Fraser's efforts with SAP kicked off in 2005, he has more than a passing knowledge of manufacturing software. He has been in the business for 20 years, much of that time marketing Visual Manufacturing, a product line that he sold to Infor two years ago.

Partner Insights

So while manufacturing covers a wide range of businesses with differing needs, smaller operations have a lot of things in common that can be handled by tailoring a system like Business One that has relatively basic capabilities off-the-shelf.

"We have been able to extend it to meet the needs of most small and midsize manufacturers. We have kept the focus keeping it simple and yet powerful. We tend to focus on the key features that most manufacturers need," Fraser says.

Businesses in the mountain states are primarily light manufacturers that are assembling, configuring or making to order, and who have basic software needs.

"They need to track labor and do some scheduling. They don't need this huge system to do this," he says. And the small companies, although they have some of the needs of their larger colleagues, don't have the staff resources to take advantage of the features in the bigger systems.

David Bilbrey, president of Everest Software Solutions, agrees with Fraser's assessment. For many small operations, fancy isn't needed. "Nobody is talking about RFID and hardly any are talking about barcoding," says Bilbrey, based in Saint Clair Shores, Mich. "The needs are so elementary."

Most companies still have out-of-control inventory and many can't take advantage of the features of higher-end products because they don't have any IT personnel on site. "The majority of manufacturers are low-end and the majority are unautomated," he says, pointing to broad opportunities to resellers who understand the segment. Most, he says, don't.

Both vendors and VARs are trying to make sense out of the manufacturing market because it has so many different segments and the general ledger companies want to make an impact in narrow markets that are often the stronghold of highly specialized, but smaller competitors.

That can require choosing which niches to target and also where to cultivate the development of add-on or complementary products. It's just another version of the build or buy discussion that comes into play in much of the business market.

Sage Software executives have said that it can be difficult to address manufacturers because they think of themselves as sheet metal manufacturers, for instance, not manufacturers. That sense drives a move towards verticalization in manufacturing at an even greater pace than the movement to serve niches in other markets.

Sage has decided to launch a series of focused manufacturing products.

"We formed a manufacturing team and distribution team," notes Scott Pugmire, senior product marketing manager. "The manufacturing team picked a set of verticals and the distribution team picked a different set of verticals."

Complicating the verticalization is the fact that different verticals have sectors in common. Manufacturing companies must deal with distribution, for example.

"One of the things we are trying to do is reeducate ourselves. How do we target these other needs? Are there still pure manufacturers? Are there still pure distributors? Are there hybrid business developing," he ponders.

The quest has led Sage to look into the SIP codes, down to the subsegment level. Sage has settled on 12 segments, with plans to roll out software editions four at a time. These will start with industry equipment and supply; consumer electronics, appliances and computers; food and beverage; and building equipment and supply. The next wave will include versions for electrical, plumbing and heating, ventilation and air conditioning; furniture and home furnishings; home personal and leisure goods and petroleum and chemicals.

Sage must also determine how many manufacturing segments it can address directly and which ones it will reach through third-party products, such as Escape Velocity and Pugmire indicated that Sage will also be looking at when to partner with third parties and when to acquire them.

Pugmire says that Sage is also exploring ways the reseller community can promote certain products and to which markets. For example, with MAS 500 getting more process manufacturing features, the package is starting to push into what has been the market for Platinum for Windows.

To date, the company has seen PFW as suitable for smaller companies in that area; promoting MAS 500 for larger operations.

"I am trying to find out if there is a better technique than that," says Pugmire, who described his job as working as a vertical market architect.

Dividing the market may be a matter of offering referral programs and getting MAS 500 and PFW dealers together, so that they can make money when they refer a lead to a VAR that markets the more suitable package.

"They can make a good bit by dong nothing but making a referral," says Pugmire, describing the possible mechanism for better segmenting the market.

Building Industries

Microsoft's Dynamics business hasn't been known for its manufacturing industry capabilities. While it has used a vertical marketing focus for about five years, it has only had a global manager of manufacturing for Dynamics for little more than a year.

That's when Sarah Ward was brought on board to fill that newly created position, after what she says was a gap for a couple of years between Dynamics programs designed to target the manufacturing market.

The effort largely involves Dynamics NAV for the mid-market and below and AX for the mid-market and up. While Dynamics GP "does have a lot of manufacturing customers, it's not really designed for heavy manufacturing," Ward notes.

A major tool in reaching various manufacturing sectors is the Microsoft Industry Builder program, through which it encourages and supports the development of vertical products.

The programs include testing these third-party applications so they can be labeled Certified for Microsoft Dynamics. That is necessary so that development partners that make sure applications "don't step on each other," says Ward and so end users "can be assured it will work with Microsoft Dynamics out of the box."

Microsoft also works with these partners to enable them to purchase Microsoft and Industry Builder applications via a single contract, on the same CD with Dynamics AX, with Microsoft also coordinating the release cycles.

The company this year has also introduced Microsoft Surestep, an implementation methodology designed to ensure users have a consistent implementation experience.

One Industry Builder application will be a package for the process manufacturing market developed by Fullscope, an Athens, Ala.-based Dynamics reseller.

Such partner-developed applications are not just designed for the American market, Ward notes.

Fullscope "has not expanded globally and they are closing very large deals," she says.

Similarly, Microsoft is using the Industry Builder initiative to develop applications for Life Sciences, which Ward describes as "a hugely explosive part of manufacturing" that includes the pharmaceutical industry, which has strong needs for traceability.

Back To The Source

Such demands are spurring one of the biggest opportunities in the manufacturing market, which is less about putting things together than determining where the components originated.

That is the burgeoning market for traceability, which is huge in the days of concerns over the quality of food, whether it is accidentally contaminated or deliberately tampered with.

The issue has been highlighted by publicity about contaminated spinach and pet food products in recent months.

Robert Distler, owner of Northborough, Mass.-based WAC Consulting, says his company sees the arena as an opportunity for expanding its manufacturing businesses.

"We are looking to capitalize and develop a marketing plan," says Distler, who notes that increasingly stringent requirements by the Food and Drug Administration are pushing businesses to consider upgrades.

The company already works with a material tracking system, writing a link with Sage Pro and MAS 500. For example, the company was working with a medical products company that "spent well into six figures to get validation done."

The client's concern for security was deep, including asking what kind of HVAC equipment Sage uses in the facility in which it conducts programming.

One AccountMate reseller, Tamlin Software Developers of Dallas, has made its mark in implementing software for manufacturers who must track the ingredients used in food processing. These demands are driven both by the FDA and by major retailers.

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