SAN FRANCISCO -- The manufacturing world hasn't exactly been an early adopter of the cloud. As an industry that...
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has long relied on legacy technologies built to move physical products through a lifecycle from design to delivery, shifting to the cloud for production and supply chain management, or SCM, was a much tougher call than in sectors such as finance or retail.
But that distinction is slowly eroding, as growing numbers of manufacturers are turning to the cloud to tap the cost savings, data availability and efficiencies it promises them. At the recent Oracle OpenWorld 2017 gathering, a panel of companies that have committed to the Oracle SCM Cloud suite shared the thinking that led them to the cloud, some of the benefits they've reaped and the lessons they've learned.
For Fairfield-Maxwell Ltd., a 60-year-old global holding company that provides a variety of seismic technology and services to the oil and gas industry, data was the driver. Brian Vogt, director of information services at the New York-based company, told OpenWorld 2017 attendees that until less than a year ago, the company did everything on paper. He quipped it hadn't even gotten around to using spreadsheets much.
When a new management team took over earlier this year, it took a look around and knew the company had to chart a new path -- not just on the manufacturing front, but also across the business.
"Nothing was integrated, [and] nothing talked to each other," Vogt said. "We needed better visibility. Everything was disjointed."
Having since deployed a number of Oracle cloud offerings, including Oracle SCM Cloud, Fairfield-Maxwell has quickly learned what it was missing. Vogt reported monthly and quarterly closings have been slashed from 15 days to as few as two, and the company has been able to reduce its accounting and IT staffing by a third. What's more, he said the sales force has clearly become more effective, and the company has gained operational and financial reporting capabilities that have further propelled it.
That said, Vogt admitted the transition has been rougher than expected, and it's mostly the company's own fault. The key lesson: Project leaders should have paid more attention to change management.
"Getting people off of pen and paper and using a system has been a whole lot more difficult than I'd expected," he said.
Oracle SCM Cloud is manufacturer's first ERP
Brian Vogtdirector of information services at Fairfield-Maxwell Ltd., on the company's move to Oracle SCM Cloud
Consistent data was just the tip of the iceberg for Ballard Power Systems when it decided to adopt the cloud. The nearly 40-year-old maker of hydrogen fuel cell membranes was exhibiting many pre-cloud warning signs: It was saddled with myriad disconnected and antiquated systems, had too much data residing in spreadsheets throughout the organization and was overly dependent on a longtime employee who hadn't documented the critical tasks he performed.
"We weren't really what you'd call a mature sales company," the Burnaby, B.C., company's IT manager, Adam Brooks, told the roomful of OpenWorld attendees.
To illustrate just how recently removed from 20th-century business practices Ballard is, Brooks said that as recently as five years ago, when customers requested custom products, sales reps would verbally promise they could deliver such products and take the requests back to the engineers. The resulting products would be sketched out and documented on paper, meaning if the company wanted to duplicate the product for another customer, or if a product had problems a year or two down the line, it was a challenge to access designs, determine the warranty status, find a service history or find any useful historical data. Yes, Ballard was delivering a product, but not a repeatable or sustainable one.
Enter Oracle SCM Cloud, which Ballard adopted aggressively in two phases earlier this year, deploying everything from planning, budgeting and financials to projects, manufacturing, and order and inventory management. Company leaders looked upon the effort as Ballard's first ERP implementation.
"We went full-bore," Brooks said. "We hit every area of the company from start to finish."
Naturally, there were lessons to be learned along the way. For instance, the company was underprepared for the numerous course corrections that occurred during the project, and it underestimated the "backfill" requirements related to moving its scattered historical data into the system.
But Brooks said such lessons paled in comparison to the transformative effect the cloud has brought to the company. Every stage of product development is now tracked, and all data flows into the Oracle SCM Cloud environment and stays there.
"It really took us from building single systems and one-offs to how a mature company would do it," Brooks said.
Expect the unexpected
Of all the pieces of advice the session's panelists offered to their audience, perhaps the one that resonated most came from Chris Hutton, director of operations and international at Carbon Inc., a Redwood City, Calif., maker of 3D printing hardware and software that was launched four years ago during a TED Talk.
Carbon spent a lot of time going through all the parts of its environment in preparation to deploy Oracle's cloud-based financial, inventory, purchasing and supply chain modules, but it didn't account for the unexpected challenges its heterogeneous workforce would present as the project built momentum. Hutton made several references to how the company saw its employees learn and adapt at different paces, and how important it is to accommodate a range of abilities to understand and get acclimated.
He stressed such unpredictability was a reminder that no matter how much a manufacturing organization prepares for a migration to the cloud, it can't possibly plan for every potential contingency.
"Know that it's going be a bumpy ride, and it's OK," Hutton said. "If it goes amazingly smoothly, you probably missed something."
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