SAN FRANCISCO – Oracle cloud ERP is branching out into manufacturing, as well as supply and demand planning, while...
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the company beefs up related order management and supply chain management (SCM) applications.
In presentations at its annual OpenWorld conference here this week, Oracle called its Manufacturing Cloud the industry's first new software as a service (SaaS) product for manufacturers in years -- and the first comprehensive SaaS offering for discrete manufacturers -- while touting itself as the leader in SaaS ERP, a market traditionally dominated by smaller SaaS pioneers, such as NetSuite and Workday.
"This is a huge effort," Oracle CTO Larry Ellison said in his opening keynote, referring to the broader Oracle SCM Cloud suite of which manufacturing is a part. "This is a lot of software. And this is not taking our existing software, lifting it up and hosting it. Let me be very clear. This is 100%, every line of code rewritten on top of Fusion Middleware. This is Fusion manufacturing."
Oracle has struggled to release software based on the decade-old Fusion Middleware, and it has not enticed significant numbers of companies to buy Fusion Applications.
Plan-to-produce in a single flow
In a press release, the vendor said Oracle Manufacturing Cloud will enable users to design manufacturing processes and standards, create and manage work orders, and monitor shop-floor status. It has a graphical editing tool for building the sequence of manufacturing operations and integrates with Oracle cloud ERP software for product lifecycle management and product master data management, which it said can streamline product innovation from idea to manufacturing.
Larry EllisonCTO, Oracle
The other entirely new product, Oracle Planning Central Cloud, is intended to streamline the "plan-to-produce" process into a single, efficient flow, integrating supply and demand planning into a modern, graphical analytics workbench, Oracle said. The software can combine forecasting, inventory and supply planning in a multidimensional analytics framework and provide recommendations. Integration with other Oracle SCM Cloud applications allows users to execute on plans by triggering material transfers, work orders and requisitions, according to the release.
In addition, Oracle Order Management Cloud now supports multiple order-capture sources, has new tools for managing orders across channels and provides more ways to execute complex fulfillment flows -- such as configure-to-order -- both inside Oracle SCM Cloud and through external fulfillment systems.
Ellison also showed a new, tile-based graphical user interface that makes all of the SaaS products -- including the new Oracle cloud ERP modules -- accessible from consumer-style mobile screens.
Oracle cloud ERP called most complete SaaS for manufacturers
In an interview at OpenWorld, Jon Chorley, Oracle's chief sustainability officer and group vice president for SCM applications, said the new products would be available by the end of the year. He said Oracle SCM Cloud is meant to provide SaaS for the core business flows of the production process, from sourcing to order-to-cash, but also in the early product-design stages.
"Folks looking at moving to a cloud solution until now have really had to look at things from a point-solution basis," Chorley said. "The net result is, particularly for supply chain-centric companies, that they have either a complicated set of applications or they have major holes in core business processes."
Chorley acknowledged that manufacturers tend to be tied heavily to on-premises legacy equipment and systems, and will look for a "point of entry" to Oracle cloud ERP -- starting, for example, with multichannel order management while running fulfillment from existing systems, then "gradually deprecate those setups.
"That again is something we're very well able to support," Chorley said. "There's obviously going to be niche solutions, particularly at that very technical low end, and we'll integrate with those. We'll provide the transactional backbone."
Asked about the future of Oracle's current manufacturing ERP offerings -- E-Business Suite and JD Edwards -- Chorley said: "What we're doing with this new development is provide a 100%, built-for-the-cloud enterprise-cloud solution for manufacturers. We believe that over time, folks will adopt that cloud technology, but meanwhile, of course, we'll continue to support and enhance our current on-premises solutions."
Chorley said previously released offerings in the Oracle cloud ERP line are attracting new business in the lower midmarket. "A lot of our cloud sales have new business sales for us," he said. "I think we'll see the same thing for the supply chain." He added that Oracle Manufacturing Cloud will compete with manufacturing ERP systems from rival SAP, which he said has not made the same kind of "consistent, concerted, long-scale focused effort to deliver the next generation of cloud applications" as Oracle.
Analysts at the conference told SearchManufacturingERP that Oracle Manufacturing Cloud is a major new entry in SaaS ERP. However, they threw a little cold water on Oracle's enthusiasm for taking over a market long served by older SaaS players and still dominated by bitter rival SAP, which historically has led in on-premises ERP for large manufacturers.
"As always, look at the business case," advised Holger Mueller, vice president and principal analyst at San Francisco-based Constellation Research Inc. "One driver is new manufacturing equipment. When that is replaced, there is usually a software upgrade. Same for all [capital expenditure] intensive SCM pieces like trucks, delivery centers, etc."
Mueller said Constellation Research expects companies to run hybrid ERP, with old equipment staying on legacy ERP and new equipment running on the newer, cloud-based systems. "Oracle, with for example, JD Edwards, can make this transition easier than other vendors," he said.
Get an overview of JD Edwards EnterpriseOne
Read a case study on Oracle E-Business Suite
Learn about the details behind Oracle Cloud ERP
Understand why cloud ERP appeals to midmarket manufacturers