The Rise of the Adaptive Enterprise: Takeaways from QAD’s Explore 2019

Last week I spent two days at QAD’s Explore 2019 conference. The first day of this annual event was filled with keynotes from executives covering the company’s product capabilities and roadmap as well as overall marketing messaging activities. It was robust with customer discussions and offered opportunities to interact with key company executives.

This article provides a brief summary of key strategic takeaways from the event.

Explore 2019: QAD Updates

First, let’s define the context for these strategic takeaways. At the event, the firm unveiled QAD Adaptive Applications and QAD Adaptive ERP. QAD also rebranded its three divisions, each of which supplies solutions into the portfolio.

• To better reflect the value it brings to manufacturing customers, the QAD solution portfolio is now called QAD Adaptive Applications. Additionally, QAD’s flagship ERP solution has been renamed QAD Adaptive ERP.
• QAD Adaptive ERP features the Adaptive User Experience (UX), and is built upon the QAD Enterprise Platform. Its adaptive solutions portfolio also includes a number of adjacent solutions (for example, QAD Supplier Portal, QAD Cloud EDI and QAD Automation Solutions, and others) — all of which integrate seamlessly with QAD Adaptive ERP.
• QAD also rebranded its three divisions. Precision Software, which provides global trade management and transportation execution software, has been renamed QAD Precision. DynaSys, a provider of demand and supply chain planning solutions, becomes QAD DynaSys. CEBOS, which produces enterprise quality and compliance management solutions, has been renamed QAD CEBOS.

And QAD’s goal? Whether a manufacturer needs supplier relationship management, eInvoicing, EDI, trade management, supply chain planning, demand planning, transportation execution, or other enterprise solutions, QAD Adaptive Applications aims to provide a proven set of purpose-build solutions for manufacturers and the changing requirements they face.

Having defined the context, now let’s consider five strategic takeaways.

A Disruptive and Uncertain World Requires an Adaptable Enterprise

Today, manufacturing business pressures abound. As transformation sweeps the industry, an increasing intensity of disruption and the exponential acceleration of uncertainty prevails (Figure 1).

Figure 1: Top Manufacturing Business Drivers

The smart manufacturing environment exists in a global economy where geo-political events (think Brexit or tariffs) can change the competitive environment faster than the blink of an eye. To thrive in this volatile environment, enterprises must quickly adapt (sense; plan; act) by responding to these business needs.

The adaptive enterprise is rapid, agile, effective, and flexibly prepared to deal with the uncertainty of various possible futures. Manufacturers need agile enterprise systems that can be rapidly deployed and provide the ability to continuously adapt to changing business models — what they make, how they make it and how they deliver it (Figure 2).

Figure 2: The Adaptive ERP Cycle

ERP systems must provide the requisite level of speed and agility to help manufacturers respond rapidly to changing business conditions, and leverage those disruptions into business advantages. The rise of the adaptive ERP cycle meets this need through no code / low-code functionality, modular upgrade capabilities, IoT support, real-time analytics, extensibility, limited need for training, brilliant web and mobile interfaces, and QAD Cloud support.

Disruption Destroys and Renews

While industry disruption dismantles some, it offers others the opportunity to rise to the occasion. In 1964, the average S&P company lifespan was 33 years; by 2016, that had dropped to 24 years. By 2027, the average lifespan is projected to fall to 12 years.

In the new disruptive environment, the fastest fish wins, not the largest fish. Moreover, winning companies take on the characteristics of the adaptable chameleon, not the ostrich that buries its head in the sand.

• Consider the past cases of Netflix and Research In Motion (RIM). Even when technology restricted Netflix to sending CD-ROMs through the mail, it knew that streaming movies was ultimately its final goal. On the other hand, RIM went from leadership to irrelevance in a matter of years by ignoring competition from rival mobile operating systems iOS and Android.
• Now consider the future; in automotive, the ICE business model (internal combustion engine) is giving way to CASE (connected, autonomous, shared, electric). Within 20 years, this hundred-year-old industry will be unrecognizable compared to its form today. In Norway, this change is already underway; 58% of cars sold in April 2019 were electric.

The point here is clear; as whole industries transform before our eyes, flexible manufacturing software allows the agile to act quickly in anticipation of imminent change. Through such agility, it is possible to thrive by being the “fastest fish.”

The Rise of Anything-as-a-Service

Smart, connected manufacturing and Industry 4.0 is enabling anything-as-a-service — a shift to selling outcomes, not products.  The classic example is GE jet engines, which shifted to selling “thrust hours,” but many other examples abound.  For instance — in life sciences, diagnostics companies will offer laboratory equipment and reagents as a service, bypassing the sale of highly-complex equipment requiring high levels of post-sales support.  In the new business model, diagnostics companies will be evaluated on SLA (service level agreement) uptime, accuracy, training, and management of reagents.

Technology Adjacencies Are Integral to ERP Success in the Cloud

As cloud ERP continues to build on itself in manufacturing, so too does its synergy with emerging technologies in areas like machine learning, data lakes, digital twins, and production execution (Figure 3).

Figure 3: ERP Technology Adjacencies in Manufacturing

Strategically, ERP is evolving to further extend to the factory floor. QAD Labs, which researches advanced development trends, has specifically earmarked “production execution” as a future area of development. While not yet productized, there were many displays, demonstrations, and presentations of this capability at Explore 2019. Although production execution is not intended to be a substitute for MES, it is intended to push ERP deeper into the factory floor.

Enterprise Quality Management is an Overarching Concern

Top-notch, cloud-based quality management is key (see The Best-in-Class Decisively Advance QMS to the Cloud).  In manufacturing, Aberdeen finds that 90% of Best-in-Class organizations have a unified enterprise quality strategy in place. Further, the Best-in-Class are 2x more likely to manage data quality at the enterprise level.

Overall, a fully-integrated enterprise quality management system (EQMS) is key to maximizing end-to-end capabilities — from industry-specific regulatory compliance; to production execution; to project deliveries to training. The integration of quality into ERP and its adjacent applications is a direction that pays off in many ways. The Best-in-Class are 94% more likely than All Others to employ a real-time visibility and quality workflow strategy for product and supplier planning (APQP / PPAP, CAPA / NCR, Document Control, FMEA, alarms, events, etc.).

Prepare for the Future with Agility

The rise of the agile, adaptive corporation is necessitated by waves of industry disruption and the exponential acceleration of uncertainty. A next-generation cloud ERP system built for that change will adapt to evolving requirements, enabling manufacturers to run their operations effectively using industry best practices. When world events happen, competitive environments change, or new business models arise, Best-in-Class firms must be ready to sense, plan, and act on those eventualities.

Which of these strategic trends currently impact your manufacturing environment? Tell us what’s in your plans for the rest of 2019 and beyond.