Analyst Shares Insights on ERP and Manufacturing Trends

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Advances in ERP Technologies and Manufacturing Trends

At Powerplex, industry analyst, Frank Scavo sits down with Plex Systems VP of Strategy Jim Shepherd to discuss trends in manufacturing, and ERP technologies. Watch this video to find out more. (11:27)

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Advances in ERP Technologies and Manufacturing Trends

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- [Brett] I'm Brett Larson. We are at PowerPlex and I'm talking now with Frank Scavo and Jim Shepherd. Lots of questions for the two of you about PowerPlex today, about some of the announcements from the keynote. What's sort of your overall view of the technology and manufacturing industry?

- [Frank] Well, from my perspective, it's really all about connectivity. We've had manufacturing systems for decades really.

- Yeah.

- But what we're seeing now and I think that was brought up very much during the keynote this morning is the whole concept of connectivity not only to other systems but also to machines, to sensors, to wearable devices that Plex has been on this theme for some time and I think we're really starting to see this really gain some traction.

- I'm noticing in talking with a lot of the different companies, you hit the nail in the head with connectivity, there's been these disparate pieces of data that were from over here in this corner and on this guy's computer and on somebody's notepad that was down on the floor. Now it's all in one. Has it been good for businesses in the manufacturing space?

- Well, it varies business by business. And there was a time where in manufacturing systems you could pretty much assume that the data within the system was self-contained, but today we're taking in all sorts of data, structured and unstructured, from a variety of sources. So how you integrate that data, how you get access to it, what level you summarize it, where you store it, what you do with it, how you gain intelligence from it are all big questions right now that companies are struggling with.

- [Jim] Well, and people are getting a lot smarter about data. It used to be the case if there are relevantly small number of people in a manufacturing company who really used data all the time, used it to make decisions and to drive their job. And now that's almost everybody in the company needs to have access to a lot of real-time information and expects to.

- And it's obviously become quite helpful.

- Right.

- We were speaking with the candy maker who was talking about the ability to... Now when I take an order, I'll know, "Yeah, I'll actually be able to have that ready in 24 hours." And then you can call the shipping company to be here to pick up in 24 hours.

- Well, and the 24 hours is a factor as well. Part of the reason that data is so important is the timeframes are so compressed. The expectation of how quickly you'll respond whether the response is giving somebody an answer or the response is delivering a product or showing up to service something that's broken, the expectations are entirely different.

- That's right.

- Expectations used to be weeks or months and they're now hours and maybe days.

- That's right.

- In the keynote announcements today, what were the most exciting parts about it for the both of you?

- Well, I was particularly interested in the relationship with Salesforce and with Workday. These are human capital management in large-scale international financials in the case of Workday. And then with Salesforce, the whole CRM advanced salesforce management, funnel management, opportunity management. These are areas that Plex has had some functionality for, but certainly I think this greatly expands the addressable market that Plex can go after and I think it's good for customers. There are customers right now that have Salesforce as their CRM, and I think having that out of the box connectivity is good for customers and I think will be attractive to prospects.

- Yeah. For me, it was Plex Insight. I'm well-aware of how much data we have, how much we gather every day from our customers either from transactions that they enter or from machine transactions and center transactions and so forth. And so giving them the ability to actually use that information in new and creative ways, whether it's to drive better decisions or to optimize throughput, or in some cases, to actually use that data to provide whole new services to their customers. That's really exciting.

- Right. I like this concept of machines that...although not to be a science fiction movie, but the machines that can talk. And I've heard from a few of the manufacturers say, "This is great for me because now my machines can tell me when I need to be serviced as opposed to stopping."

- That's right, that's right.

- And that seems to be like a huge moment.

- Well, Jim and I, we had a presentation yesterday we gave together. And the thing is that these machines have always been talking for decades literally. Just we haven't been listening, right? And we haven't had a way to listen. So the fact now that the back-end systems, manufacturing planning and control systems are now taking advantage of what the machines are telling them for preventative maintenance, for scheduling, for quality. This really, really will be an acceleration of innovation on the shop floor with this capability.

- And, Jim, there was a study on The State of Manufacturing today. Tell us a little bit about that. What technology are they manufacturing?

- Well, what we did was go out to our customers and do a really comprehensive survey to ask them about what are the factors that are impacting their business, what do they think is coming, what are the things they see happening. And some of those were things that Frank and I discussed yesterday was smarter processes, smarter products, so the products themselves now ship with intelligence. It was the change in supply chains from very local, self-contained supply chains to these very long, highly dynamic extended supply chains. So it was a lot of those things that we covered in the manufacturing report.

- Where do you see the future of technology and manufacturing going 5 to 10 years down the road?

- I really think that we're going to see even greater acceleration of people using technology to drive productivity to improve quality, to allow even very small manufacturers to serve global markets and participate in global markets. And we see that today. It used to be you had to be a pretty big company before you had multiple plants and before you were serving Asian markets and European markets and so forth. That's not the case today. Even our smallest customers often have multiple sites in multiple countries. And that's the power of technology. They couldn't afford to put big salesforces there and so forth. That's all because of what you can do with technology. And I think you're just gonna see more of that.

- I think technology, as Jim just said, is really the great equalizer that allows small companies now to compete with larger companies for worldwide markets. In the past, it was hard for a global company to find a supplier that maybe was a small supplier, because they just didn't have the reach, manufacturers, reps, salesforce and so on. But now you combine the technology we're talking about here with ecommerce and web commerce, marketplaces that allow customers to find smaller suppliers. I think it's a great time to be in manufacturing, and small companies have a way now to compete.

- Yeah, we saw that with the Floorcraft announcement that they are the best in...

- What are the chances of this little company in Southeast Michigan being the number one supplier for Walmart?

- For Walmart, yeah.

- Out of 60,000 suppliers.

- Yeah.

- And it's because they can do ... Walmart has incredibly demanding standards for their suppliers about outcome, but about the things you have to be able to do in terms of taking orders and responding in a certain amount of time and shipping to all these locations...

- Very demanding.

- ... and so forth. And they can afford to have the kind of information systems that allow them to do that.

- Right.

- They not only wouldn't have been supplier of the year, they wouldn't have been a supplier.

- That's right.

- It is a boom for small business to be able to have. They've got big data to swing around to really help them no matter what.

- That's right.

- Real quick on the wearable technology. Everyone seems very excited about that. It seems to be not just 'cause we're geeky and we like to wear stuff, but it seems like it's bringing some... I've heard people talk about safety with these things. I've heard efficiencies and just more easier ways of doing things.

- I think that's true. And I think there's a lot of hype and excitement about Google Glass and other wearable technologies. And in the case of Glass, it never really caught on in the consumer marketplace, but it's probably the case that in special use cases like in manufacturing on the shop floor in the warehouse that that's really where this type of technology belongs where the style factor is not significant, because people already look like dorks. So putting Glass on them is not going to make it any worse.

- Yeah, one of the things we discovered when we started what we were thinking was going to be a trial at Fisher was by accident one of their scan guns, which everybody uses by the hundreds and hundreds, happened to be broken that day, which was why Barry just wired the guy up and put him to work. It was like they needed the ability to do that kind of scanning. The fact is that whole generation of technology, virtually all manufacturers rely on today on those scanning guns, is really very old, out of date technology. They're expensive and there really hasn't been anything that's come along to replace it. There's been a lot of talk about potentially consumer devices and people using their phones and stuff. But it may be that the wearables turns out to be for a lot of those use cases. That becomes the capability that replaces those barcode readers and scan guns that are ubiquitous right now. In fact, it's...

- Yeah, there has got to be a better way.

- There has to be.

- Well, and it turns out that this new stuff is cheaper.

- It is. Those industrial products are very expensive.

- You think of this as state of the art stuff, but you could equip somebody with Glass and a ring scanner and those location beacons and stuff for a fraction of the cost of the scan guns.

- Right.

- Right, excellent, gentlemen. Thank you both for chatting with me.

- Brett, thanks so much.

- Great, thank you.

- Thank you.

- Appreciate it.

- Thanks. Thank you. It was good.

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