Quietly and with little fanfare, something remarkable has happened, says Infor's senior director of solution consulting, Phil Lewis. Namely, the era of true mass-customisation has finally arrived, some 15 or so years after the initial hype that first introduced the concept.
Once, manufacturing operations were insulated from the whims of the consumer, separated by a protective layer of distributors, dealers and retail operations. No longer, says Lewis. Fuelled by e-commerce, social media, and growing levels of affluence, consumers know that they can play manufacturers off against each other to obtain individually differentiated products and services.
"These days, the consumer is king," he observes. "They have an expectation that they can get what they want, when they want it. And as the distribution channels that have hitherto buffered manufacturers from the consumer have been forced to react to this, manufacturers are coming under pressures that they haven't seen before."
Take consumer durables, he points out. From cars to consumer electronics, there's been an explosion in the number of features on offer, along with an equal explosion in colours, sizes, and formats. Throw in the number of valid combinations of features, models, colours, sizes and formats, notes Lewis, and you've got a very considerable inventory management problem.
Hence, of course, the huge pressure towards Dell Computer-style 'build to order' business model, a pressure that already sees some European car manufacturers achieve built-to-order vehicle volumes in excess of 50%. And, while Dell itself these days produces built-to-forecast models for retail sale, its place as the 'go to' vendor of choice for those looking for high-end, high-specification machines built to order has arguably been taken by upstart vendors such as Yorkshire-based PC Specialist.
Yet outside a few key industries, such as automobiles and computers, viable strategies and capabilities have yet to emerge to help manufacturers to deal with this 'consumer is king' phenomenon, argues Lewis.
"Customers are clamouring for something that many mainstream manufacturers are struggling to deliver," he observes. "They can see the shift in the marketplace, but what they can't see are the internal capabilities that they must have in order to effectively respond to that shift."
Such as? Well, consider the humble bill of materials (BoM), says Lewis – the mainstay of just about every ERP and MRP system in existence. Without dynamic, easily-configurable customer-specific BoM, he points out, the manufacture of customer-specific orders is next to impossible.
But this, in turn, calls for reasonably sophisticated product configuration management systems and web-based customer engagement platforms to deliver that product configurability to consumers or channel intermediaries such as dealers. Similarly, it's pointless being able to offer customisation capabilities without being able to accurately and reliably promise and schedule the associated customer orders, which in turn calls for advanced planning and scheduling capabilities that are granular enough to deal with the resulting complexity.
Roll it all together, sums up Lewis, and in short the result is a market – and a business model – with which traditional ERP systems are struggling to engage.
"We've gone from a world in which manufacturers' ERP systems in effect said: 'This is what we're going to make, now let's sell it,' to one in which instead they say something like: 'This is what the customer wants, now let's make it.'"
And as a growing number of manufacturers become uncomfortably aware of that fact, says Lewis, Infor is poised to capitalise on the situation by pointing out the merits of two aspects of its own approach to ERP.
First, there's the strategic investment that the company made a few years back in its ION integration and middleware layer, which has since become core to its product strategy.
Originally conceived of as a way of bringing together Infor's extensive clutch of acquisitions onto a common communication and integration platform, ION has since turned out to be something of a jewel in the crown, thanks to its ability to serve as a middleware layer connecting together a wide range of both Infor and non-Infor applications. And doing so, moreover, within a cloud context that leverages Amazon Web Services' powerful and scalable cloud infrastructure, further adding to the connectivity possibilities.
Second, and leveraging that cloud context, Infor has brought to the cloud something that manufacturers really want, says Lewis. Namely, an ERP that isn't the 'me too' generic versions of basic ERP that some vendors offer, which lack industry-specific functionality and flexibility. Instead, it's genuinely best-in-class industry-specific ERP for the subset of industries on which Infor focuses, industries such as aerospace and defence, automotive, consumer packaged goods, distribution, fashion and apparel, food and beverage, and industrial equipment manufacture.
Not only does a move to Infor CloudSuite avoid such compromise, stresses Lewis, but it also provides, bundled in, the consumer-grade user experience of Infor's newest 'on-premise' ERP suite, Infor Xi, as well as Infor Ming.leTM (a social collaboration platform) and Infor's advanced cloud deployment options. Among these is the option of 'bundled in' pre-integrated best-in-class niche specialist applications, such as Infor CRM (formally SalesLogix), or Infor's own expense management system; Infor XM, and its powerful big data analytics and monitoring capabilities.
The latter, significantly, come from Infor's Dynamic Science Labs, and comprise applications to help companies gain insights from predictive analytics, anticipate problems, and uncover hitherto hidden opportunities.
Prominent among those opportunities, stresses Lewis, is the ability to harness big data analytics to better understand consumer demand and, in the process, become better able to meet and capitalise on that demand.
"Once a manufacturer is able to more accurately predict consumer behaviour, it then becomes possible for it to construct a predictive supply chain, rather than a reactive supply chain," he points out. "So, instead of building to forecast, and then discounting prices to move the resulting inventory, you're predicting what consumers will be asking for, and effectively building to order. It turns the whole proposition on its head.
And throw in the fact that cloud deployment offers immediate access to the very latest version of enterprise applications, and is flexible, scalable, accessible and agile, and it's a proposition that's difficult to resist, he believes.
"The world has changed and the consumer is king," he sums up. "Manufacturers are recognising this, and seeing the need to amend their strategies to suit. The problem is their ERP systems. At Infor, we believe that's a problem that we can solve."
