Removing Kinks in Outsourced Manufacturing
Date: Friday , October 01, 2010
Businesses and supply chains have become substantially more global over the last decade, but have manufacturers been able to cope up with this rapid growth? Between 1995 and 2007, the number of transnational companies more than doubled, from 38,000 to 79,000, and foreign subsidiaries nearly tripled, from 265,000 to 790,000. In addition to spreading geographically, supply chains now involve more companies. Nearly 80 percent of executives expect the number of collaborative relationships with third parties to increase. Currently, an ever-broader range of activities are being outsourced: between 2007 and 2010, R&D outsourcing is forecasted to increase by 65 percent, and engineering services and product-design projects will increase by more than 80 percent. Supply chains must also contend with rapidly expanding and contracting product portfolios. In the consumer products industry, for example, product introductions increased by 17 percent in 2006 – more than double the 2005 rate. Portfolio rationalization is eliminating SKUs (Stock Keeping Units) almost as fast. Together, these shifts are creating constant turmoil. Confronted with such daunting complexities, supply chain executives face five major challenges — Cost containment, supply chain visibility, risk management, increasing customer demands, and globalization. These are exactly the challenges that Serus looks to address with its wide array of solutions.
Serus, a Sunnyvale based company that provides enterprises with a proven end-to-end Intelligent Operations Management solutions has a lot to say on this topic. Serus has been a pioneer of technology and managed services for companies with distributed or outsourced manufacturing operations and have been delivering solutions for the past 9 years. The Serus SaaS solutions enable efficient automated collaboration, execution, and decision making across global supply and distribution networks, saving millions of dollars for manufacturers. Serus provides an end-to-end application that satisfies inter-company business process requirements for product engineering, operations, and finance to manage outsourced partners – all driven by single source of truth. The Serus product is deployed as an affordable cloud solution, as opposed to expensive enterprise software deployment or a custom one off software implementation. “We have built an ecosystem of suppliers enabling our customers a plug-and-play information exchange. We have operations in North America and India; we established an India operation to take advantage of engineering brilliance and to potentially serve the growing manufacturing sector. Along with our products and services, we include industry best practices and domain expertise,” says Indu Navar, CEO and Founder of Serus.
The Great Manufacturing Challenge
When a company deploys the Serus solution, it addresses an organization’s three main pain points, operations, finance, and IT. "What we do is help companies manage their operations by running our solution alongside their existing ERP systems, be it Oracle or SAP, in support of the manufacturing efforts that takes place outside their four walls, which includes collaboration with their extended outsourced partners," explains Indu. In operations management and IT, Serus helps in executing everyday tasks like providing day-to-day information product specifications, testing scripts, and sending other project information to the partners, thereby, managing all the inventory information that goes back and forth, over its product platform. Furthermore, the Serus approach manages all the financial information, like the actual cost or the invoice that is paid to the outsourced manufacturers and it then collaborates with the systems at the partner and supplier site.
The company’s flagship solution is an Intelligent Operations Management (IOM) application suite. At the center of the IOM offering is a B2B Hub that provides real-time data aggregation and content management, including facilities for data cleaning and error resolution, combined with collaboration across the extended enterprise. Its customers recognize that IOM removes the need for large, complex spreadsheets that are difficult to maintain and audit, and that the IOM solution includes a set of modules for business functions on a platform that supports advanced reporting, decision-making, and action-taking.
Serus’ Global Operations Execution Suite provides real-time inventory management and operational intelligence. It provides financial inventory transparency, accurate calculation of inventory exposure, predictability, automated reconciliation, and SOX compliance.
To reduce the time associated with New Product Introductions (NPI) a challenge that all companies face, Serus has recently introduced a Global Manufacturing Process Management (GMPM) solution that ensures Bill of Materials (BOM) and manufacturing specification changes are tightly integrated with partner manufacturing execution systems. The end result is faster response times associated with changes and a decrease in manufacturing scrap. To complete Serus’ solution is the ability to provide an Execution Planning suite, closing the gap between weekly or monthly planning and day-to-day execution. The solution suite is built on a closed loop platform that validates that the instructions were executed correctly.
Serus deploys its product through a private or public cloud computing platform which is determined by the client’s requirement. Having a cloud based solution also adds an edge to the product as Serus is able to manage everything from deployment to upgrading from a remote site. "It allows us to take responsibility for everything that is happening in the customer site. This is unlike the old school software where there is no feedback loop and the ownership and partnership is missing," says Indu.
Today, the company’s technology, domain, and operations expertise have empowered operations managers and executives at semiconductor companies, contract manufacturing organizations, high-tech OEMs within the Fortune 500, and mid-market companies, to meet the demands of their market more efficiently. With its state of the art Supply Chain solutions, Serus has improved inventory visibility at subcontract manufactures from 85 percent to 99.5 percent. Being able to trace the exact status of any lot in any location at any point in time has improved product quality, customer service levels and financial reporting.
Additional real-time operations data has helped with decision support, allowing for a quick response to supply and demand changes, dramatically improving a company’s ability to hit target ship dates – and most importantly keep all their customers happy. A supply-chain dashboard with embedded analytics has also enabled management by exception improving decision making and ensuring trading partners comply with manufacturing specifications. From Product engineering, to inventory control, from finance, supply chain operations, to logistics, and from operations planning, sales operations to ERP, Serus helps a company efficiently automate every step of the manufacturing process.
When founding Serus, Indu had established firm relationships with some of the company’s early clients, such as: Cisco, Spansion, Quantum, and a few others, who were early adopters of the company’s products and services. Today, with a global clientele that includes top players like AMD, Boston Scientific, Cisco, Flextronics, Juniper Networks, nVidia, Thermo Fisher and Wente Vineyards. Serus has firmed its foothold in four major business verticals — Semiconductors, Hi-tech manufacturers, medical devices and consumer packaged goods.
"Systems have to continue to get revitalized. They don't have to get replaced. Serus is built in a very modular, extensible way. It runs on rational, commodity server products,” says Clay Cipione, former Chief Information Officer, AMD.
Solution: The Serus Way in Support of High Tech Vertical
Flextronics, a leading Electronics Manufacturing Services (EMS) provider with operations and services through a network of facilities in 30 countries on four continents, expanded their long-term relationship with Serus to include an Enterprise partnership. Flextronics chose to deploy Serus’ solution enterprise wide across their automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs.
Flextronics, like other high tech companies, faced great challenges as they aimed to optimize their operations and inventory levels. The Serus Lean Inventory Optimization Network (LION) solution helps customers achieve the benefits of lean manufacturing methodologies, including improved demand and supply chain visibility, optimized inventory levels, and improved product delivery times. LION contains embedded, proprietary, industry-leading lean business rules and algorithms developed by Serus’ partner, FlowVision LLC.
The LION web based Decision Center dashboard and alerting mechanism allowed Flextronics to optimally size their inventory to ensure compliance with all their ongoing supply commitments. It provided collaboration both internally with remote operations as well as with business partners. The integrated B2B Hub aggregated forecast and shipment information across customers and provided complete visibility into required inventory levels. The Lean Planning module provided all users a complete view of inventory levels and the ability to conduct what-if scenarios, while the Lean Triggering module initiated procurement triggers needed to support changing requirements. “LION has helped Flextronics to dramatically improve efficiency in collaborating with the customer to optimize inventory and service levels,” says Jason McLelan, Vice President of procurement at Flextronics.
Serus: Looking into the Future
Addressing the most critical challenges faced by the manufacturing industry for the last nice years, the company has not found any serious competition as Indu believes that Serus is the only company to provide subscription solution with an end-to-end footprint for its customers to manage their outsourced requirements. The only competition that she experiences from time-to-time is when companies try replicating the solution in-house. "A majority of the competition comes from the clients trying to modify excel or create a home grown solution. While with Serus one not only gets a solution that is more cost effective but also fully implemented within 6-9 weeks as opposed to an internal project that takes 6-9 months to start on,"
Since the company delivers its solution on cloud, it has found that the pay-per use option (SaaS) is most attractive to its clients, small, medium and large organizations, likewise. But the most challenging aspect of being in the business Indu feels is making organizations realize the importance of operations management solution. But the recent recession had brought a silver lining for Serus. Since the downturn, most organizations are striving to be lean while increasing their profit margin.
Analysts too have recognized Manufacturing Operations Management as a $4 billion market and this is just in the semiconductor, hi-tech electrical manufacturer, and medical devices sector alone. This opens up a vast opportunity for Serus. This is why the company plans to hire 20-25 more people by year end. At present it has 50 employees in the U.S. and 13 in India.
Since, incorporation, Serus has been on a momentum of high growth. The company has raised $19 million in two rounds of venture funding from OVP Venture Partners, Diamondhead Ventures and Samsung Investments.
Indu is very optimistic about the future, for she believes Serus is in a unique position as the market leader in her space. With most companies giving up their manufacturing facilities and opting for outsourced manufacturers, Serus is confident on riding the growth wave. “The Serus culture is one that sees no boundary, a culture that challenges the way things are done, we challenge and improve on everything. We are a driven organization that thrives on innovation without compromising Integrity and team respect,” says Indu.
So What Do Other Clients Have to Say About Serus Solutions?
One of the turnkey executions of Serus was at NVIDIA, a world leader in visual computing, they talk about the proficiency of Serus’ solutions, Ranga Jayaraman, CIO, NVIDIA says, "The custom application NVIDIA had previously used to define chip BOMs and the manual processes to communicate the BOMs and production steps to manufacturing partners were error prone and time consuming. The Serus solution suite provided a commercial alternative to additional custom development. It has resulted in significant reductions in BOM creation and maintenance times and errors. It also enabled the process to be executed outside of Santa Clara, allowing the Product Engineering team to focus on driving yield improvements. I am pleased with the Serus team’s deep knowledge of semiconductor processes and their high quality deployment on an aggressive timetable."
John Fernandez, Director of Finance at Audience, the leading provider of advanced voice and audio processors for the mobile and telecom marketplace, says that “After a thorough evaluation of various vendors, we selected Serus as our operations and planning system…Serus will not only enable us to transition to a scalable operations model, but it will also allow us to implement best practices in outsourced manufacturing and testing for fabless semiconductor companies. Their out-of-the box tight integration with Microsoft Dynamics Financials ensures quick implementation of our new system within our organization”.
Jason Goodelle, Director of Operations at Sand9, a fabless semiconductor company that develops products based on high performance MEMS resonator technology, says that “After evaluating multiple options, we selected Serus as our core operations system. The Serus solution will enable us to implement a fast ramp to production stage. In addition, its SaaS model allows us to deploy a world-class system for fabless semiconductor manufacturers without upfront IT investment and at variable costs, delivering a quicker ROI. Finally, with the quick implementation timeline of the Serus solution, we can deploy our existing resources and go-live with the system in a short timeframe, before they get extremely busy as we enter production stage”.
Alan Marten, Senior Vice President & General Manager at Smart Modular, a leading independent manufacturer of memory modules and solid-state storage products, including solid-state drives (SSDs), said that “Global supply chain operations are key to our business, so it’s imperative that we have real-time data that helps aid in the process of making critical decisions. That’s where LION comes in. Ultimately, these decisions benefit our customers,” said, Memory Business Unit. “Our deployment of the Serus’ LION suite not only enhances what we believe is a state-of-the-art IT infrastructure to better serve our customers, but it also helps us maintain our overall operational excellence.”
The Mind behind Serus
Often it is not dreaming the dream but the execution of it where people fail. But Indu Navar has accomplished more in her four short decades than most people perhaps do in a lifetime. An experienced Silicon Valley technologist and entrepreneur, Indu, a CEO of an IT company, an amateur pilot and mother of 10 year old wears many hats.
Indu’s journey in the U.S. began when she came to CSU, Chico in 1992 from India to pursue her Master’s in Computer Science. Post her education she started her career as a gifted engineering working for NASA. Her career has taken her to Silicon Graphics, and Healtheon (WebMD) prior to co-founding Serus.
Talking about how the unique name of the company, she laughs and explains, “The name derives from cirrus clouds, those feathery wisps that tornadoes leave in their wake. Serus is actually in the business of upheaval prevention, offering software that musters "the right information at the right place at the right time."
A dynamic person with always a smile on her face, Indu herself has plenty to smile about. Started from her dining room in 2001 without the help of any venture capital, Serus today sees a clear path to $100 million in sales, and boasts billion-dollar companies as clients. Today, Serus is backed by several venture capitalists, and Indu now hopes to take Serus public soon and thereby realize her dream: “to build a company from zero to public offering.”