What is the role of PLM vendors in Salesforce Manufacturing Cloud?

What is the role of PLM vendors in Salesforce Manufacturing Cloud?

Last year, I asked if the Salesforce platform can accelerate cloud PLM. if you missed my article navigate your browser to this link. The discussion was about how Salesforce.com platform can provide a foundation to develop PLM system. The jury is still out and, in my view, looking at Propel PLM traction and potential success.

Meantime, Salesforce came with an interesting announcement – Salesforce doubles down on verticals, launches Manufacturing and Consumer Goods Clouds.

Manufacturing is one of the latest industry to move into cloud computing. Salesforce.com believes that when manufacturing companies will be looking at how to build a sales process for manufacturing and CPG. Salesforce considers manufacturing special capital intense businesses. According to Cindy Bolt, SVP and GM, Salesforce Manufacturing the role of manufacturing cloud is to bridge the gap between sales and operation teams.

“Manufacturing Cloud bridges the gap between sales and operations teams while ensuring more predictive and transparent business, so they can build deeper and more trusted relationships with their customers.”

Salesforce press release will give you more ideas about Manufacturing Cloud. In a nutshell, the solution is focusing on Sales agreements and Account-based forecasting. This is the core functionality of Manufacturing Cloud. Together with Manufacturing cloud, Salesforce is releasing additional product innovations such as Analytic, Community and Integration.

Some other products are mentioned in the context of Manufacturing Cloud – Prebuild Solutions and Accelerators. In such a context, I found interesting to see Rootstock (cloud ERP system based on Salesforce).

My favorite comment is the following one:

At its core, the problem sales and operations planning had tried to solve and continues to try to solve is a lack of coordination between business functions. Manufacturers tend to operate in silos, resulting in less-than-optimal achievement of KPIs and stresses the business’ ability to achieve its revenue and profit target,” said Reid Paquin, Research Director for IDC Manufacturing Insights. “Digital transformation dictates that planning decisions be made with a 360-view using near-real-time information on demand and consumption”

The key problem to address is siloed manufacturing environment with multiple ERP systems and CRM environment. Check Manufacturing global article. Here is the passage:

Critical customer insights are often siloed across spreadsheets and multiple ERP systems, which can negatively affect service level agreements, account performance and ultimately the ability to accurately predict demand. The resulting inventory stockouts, buildups and warehousing costs reduce operating margins and negatively impact revenue. In order for manufacturers to provide a seamless customer experience, they need a solution that helps them better understand customer needs while improving visibility across the entire value chain. 

There is no mentioning of PLM vendors in the context of the Manufacturing cloud announcement. Even, Propel PLM, which is built on top of Salesforce platform was not a part of the announcement. What does it mean?

Some guesses and questions. PLM is considered as primarily an engineering function and not exposed to sales. Salesforce is selling in the industries underserved by current PLM. Operational vision and silo-breaking strategy of Manufacturing Cloud is not expanding (yet) to engineering, production and manufacturing planning, maintenance.

I found all above really strange. Especially in the context of manufacturing business transformation. While manufacturing companies are changing from selling a product to selling services, it is not clear to me how information silos will be organized to prevent data to be fragmented between product engineering, manufacturing, and sales. I’m sure Salesforce has a good understanding of the importance of integrations. It was one of the reasons for Mulesoft acquisition for $6.5B last year. However, Salesforce is not doing yet any steps to introduce PLM and related engineering software to manufacturing cloud.

What is my conclusion? Salesforce is not connecting with PLM vendors to partner in Manufacturing Cloud. At least didn’t mention it during the initial press release. Which means for manufacturing company that the most critical information silo is missed. Sales, maintenance, support – all these three activities are intertwined together. It will be interesting to see how Salesforce Manufacturing Cloud will be changing Manufacturing Companies without the ability to bring design, production and maintenance information for sales. Such a bridge can allow Salesforce to get into the building of new manufacturing sales strategies. But, I didn’t find any hints on building one. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.

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  • Lou

    Just speculating, but if there is any possibility salesforce will want buy propel down the road, that would be a reason for not promoting them now. Salesforce tends to eventually buy one key player in their strategic app categories.

  • beyondplm

    I’m the wrong person to ask. You need to ask Ray about it. The problem with your logic is that there is 1 out of 1 in this category. And I’m not sure PLM is strategic for Salesforce (yet).

  • Lou

    Don’t see a problem with the logic. Salesforce does not need a bunch of options to decide whether or not Propel is a good investment. It looks like they have built a capable PLM app very quickly. With ERP, CRM, and CPQ covered, PLM must be in their long term focus.

  • beyondplm

    It is possible, but all 3 statements are pure speculation. But you said it from the beginning, so it is fine 🙂