This Supply Chain Matters This Week in Supply Chain Tech commentary highlights how Oracle’s prior acquisition of NetSuite has ow resulted in augmented supply chain management technology capabilities for NetSuite users.

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Supply Chain Matters This Week in Supply Chain Technology

Background

In July 2016, enterprise Cloud infrastructure and software applications provider Oracle announced its acquisition of Cloud based ERP provider NetSuite for an estimated $9.3 billion. One of the more important aspects of NetSuite’s technology was its native multi-tenant Cloud architecture appeal to mid-market companies that can little afford expensive and elongated ERP implementations.

After closing on the NetSuite acquisition, this technology provider exists as a business subsidiary of Oracle, but with the ability to leverage its broader infrastructure, advanced data analytics and supply chain management product technology capabilities.

At the time of this acquisition this supply chain analyst anticipated significant opportunities from a supply chain and product management perspective and noted such in a Supply Chain Matters update.. NetSuite’s product strategy was highly industry-centric, focused on addressing specific business process support needs.  It further included presence in mid-market retail, wholesale distribution, and manufacturing industry segments. Regarding the latter, for instance, there was a strong presence in the apparel and fashion industry.

Unforeseen at that time was the subsequent explosion in online buying brought about by the COVID-19 pandemic.

 

Today’s Snapshot

Last week, Oracle NetSuite held a On Air Power Up online event to update customers on current product innovations and customer momentum. Evan Goldberg, Co-Founder of NetSuite and now Executive Vice President at Oracle hosted both a press briefing and anchored the keynote of the online event.

In terms of market momentum, NetSuite has experienced 24 percent year-over-year revenue growth during its most recent quarter, with upwards of 5,000 customers added last year.  Customer adoption now surpasses the 24,000 mark and ranges from start-ups to growing mid-sized businesses. Goldberg was proud to note that NetSuite had 26 customers go public on the ERP platform representing 70 percent of 2020 Tech IPO’s. We found that statistic to be insightful as to the customer base that the company has garnered, that being fast-moving companies seeking growth.

What especially caught this Editor’s interest was the maturing of supply chain management focused business process support capabilities.

The forces of the pandemic that led to a surge in product demand for home office, technology and home exercise equipment, personal care products and increased online shopping needs included such opportunities for NetSuite customers.

Natural personal products producer Hello Products Founder Craig Dubitsky indicated that COVID-19 and an acquisition by Colgate Palmolive prompted a surge in overall demand. He boasted that his company’s supply chain team was amazing and provided credit to NetSuite’s application software as a valuable partner in maintaining needed inventory levels and online sales support needs. The fast-growing company outgrew its dependence on spreadsheets and adopted NetSuite which his implementation team described as a seamless experience. He especially noted the ease of implementation and employee acceptance of the use factors of the software.

EVP Goldberg added that the acquisition by Oracle provided opportunities in leveraging more advanced analytics and in deploying Oracle’s intuitive Redmond user interface among NetSuite applications.

Augmented supply chain management business process support is provided under the umbrella term of intelligent supply chain and now includes:

Augmented online commerce support capabilities including Intelligent Fulfilment and Pack Station, applications to manage order pick and pack. NetSuite Commerce now includes the ability to quickly stand-up online web sites with multi-language capabilities. Goldberg indicated that 78 million transactions were supported over last year’s Black Friday holiday shopping period.

A centralized purchasing and billing process is now supported that can consolidate purchasing activities among multiple subsidiaries.

Inventory management support includes the ability to optimize based on profitability or channel parameters.

In the area of warehouse management support (WMS) a recent introduction has been support for wave picking and automation.

A form of supply chain control tower capability has been introduced supported by AI/ML decision making capabilities that includes orders at risk or suppliers at risk.

With a higher customer uptake in manufacturing industry sectors. NetSuite executives described a significant amount of investment has been directed at outsourced manufacturing support including re-architected MRP and supply chain planning engines.

NetSuite has further leveraged Oracle’s advanced data management and analytics capabilities among certain supply chain process support needs.

In the soon to be released category is leveraging of Oracle’s Internet of Things (IoT) enablement capabilities, pre-integrated with workflows for specific supply chain process areas.

 

Added Perspectives

We have highlighted the above because just after the acquisition, NetSuite teams seemed reluctant to talk in-detail to this analyst regarding specific supply chain management process support features that existed at the time. That is obviously not the case today.

Large acquisitions involving a large technology provider and a smaller, focused tech provider can sometimes be synergistic or a clash of cultures and vision. We do not sense that this has been the case with Oracle and NetSuite in the area of supply chain management support.

Thus far it has shown to be synergistic and quite promising in terms of smaller, growing businesses, manufacturers and retailers having access to supply chain management focused technology that bigger businesses leverage today. That’s a win for all.

 

Bob Ferrari

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