Supply chain specialisation is the way of the future for the manufacturing industry and there will be a tremendous influx of small software developers entering this market.
That’s the prediction of Boston-based Motherwell Information Systems marketing and business development vice-president Daniel Sweeney, who visited New Zealand last week.
Two years ago Motherwell bought Auckland-based process manufacturing systems developer Cimdec, which has since taken on its parent company’s name. Motherwell also holds the local agency for supply chain software specialist Numetrix.
Unlike some of the largest manufacturing software players, Sweeney believes there will be tremendous market fragmentation.
“The latest trend in most manufacturing companies is around a theme called supply chain, but the supply chain has no real model or definition. It is more of a vision or a way of approaching business that companies haven’t used before.
“Not long ago the focus was on planning and making a product. That’s where MRP came into place — you plan all the material needed and then produce a production schedule and make a quality product.”
Sweeney says now the rules have changed and manufacturers are automatically expected to make a quality product or they won’t survive. The emphasis had shifted instead to the delivery of the product.
The product has to be shipped when it is wanted, and in the quantities that are wanted.
“Companies could spend a fortune moving orders around or changing orders or trying to find the product that they need to ship.”
Sweeney says that some years ago warehouses and large inventories almost became unfashionable, but now the feeling was that you can’t survive without one. “You have to find reliable ways to manage all the inventories that are out there.” Companies had a tremendous amount of investment sitting in warehouses, or on trains or boats.
“Getting those to customers at the least cost is the only way many companies are going to stay in business.
“So what I think we’re going to see, is a tremendous influx of small, focused software developers, software companies and technologists coming in to help solve those logistics and supply chain problems.”
He believes the more that happens, the more difficult it will be for the software industry to come up with any kind of model. “It will be a challenge for companies like ours to help customers put those processes together into single solution. You’re not going to get everything you want from one vendor. You’re going to have to mix and match. This will put a real strain on the IT people in manufacturing to come up with a common technical architecture. It will be really tough if you’re sorting out an architecture because it will be a free-for-all.”
In New Zealand Motherwell concentrates on the dairy and food industry, forestry, building products and brewing.
Former Cimdec head Lindsay Rewcastle recently started a supply chain specialist firm.