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Shaw Industries has deployed a NetSuite ERP system to support its global expansion plans, deciding against costly and complex platforms offered by traditional large suppliers.

Shaw Industries has deployed a NetSuite ERP system to support its global expansion plans, deciding against 'costly and complex' platforms offered by traditional large suppliers.

The US-based firm is the world’s largest carpet manufacturer, with over $4 billion (£2.4 billion) in annual sales, and global operations across countries including the UK, Australia, China, Mexico, and India.

“There were a couple that were close in functionality to NetSuite, but each of them, whether SAP or Oracle, were much more complicated to configure and set up,” Shaw’s CIO and VP, Roddy McKaig, told ComputerworldUK at the SuiteWorld event in San Jose. “It was going to cost us a lot more upfront money compared to Netsuite.”

“SAP and Oracle got close on the price of the licence, but they really couldn’t compete on the cost of the services. They were going to charge a lot more - almost double for getting configured and installed.”

Following an internal agreement to expand its international business with a new 210,000 square foot manufacturing plant in Shanghai two years ago, the company decided to implement a new ERP system to manage its new operations.

With its Australian subsidiary having previously had success with Netsuite, prior to being acquired by Shaw in 2007, the company went live with its OneWorld software as a service platform in 2013.

Two-tier ERP approach

The SaaS solution was rolled out as part of a two-tier ERP approach, with the firm continuing to rely on its central ERP systems. These consist of a variety of in-house developed systems to cover its supply chain, order entry processing, manufacturing and shop floor control demands, as well as Oracle PeopleSoft for financials, HR and payroll.

These systems would have been difficult to expand to China as they were configured only for the American industry, explained McKaig.

“Our systems are very good at supporting our business, but they only handle English language and US currency. When we went to China with a manufacturing plant we had to have something that could handle Mandarin and China currencies,” he said.

“We are also in India and Australia, so what I wanted was a solution that had a lot of flexibility in the language, currencies, and the local regulation that the government puts on us.”

NetSuite OneWorld is now used at the China plant for financials, reporting, order management, inventory management, manufacturing and purchasing.

Cloud benefits

A major factor in its decision to use NetSuite was its cloud delivery model. This offered the agility to set-up in new areas without large investments in on-premise infrastructure that would need to be managed on the ground.

“When the company announced that it would be expanding outside the US, I did not want to be deploying software and hardware and resources everywhere they went to support that system. That would have been a huge financial burden on the company,” said McKaig.

“With Netsuite we hooked them into the software, we manage it and administrate it from the US. So we have not hired any more technical people to support the China location. We are doing it all from our offices.”

He said that there was slight reticence about the performance of a cloud product at first. However, these misgivings were overcome following the deployment.

“Our user base has always demanded instantaneous, sub-second performance, and that was one of my main concerns with Netsuite - having systems located in California and a plant in China. However, we have been online now for about a year in China and we have had no performance or systems issues whatsoever,” McKaig said.

Expansion plans

Shaw now plans to use Netsuite for all future international expansion, as well as with new areas of development domestically.

McKaig added that, despite the success of the implementation, the company does not expect to replace the firm's complex central ERP system - largely built up over decades of operation - with Netsuite software.

“Our business is too tailored to adopt Netsuite. It would be a multi-year conversion to try and do that. It won’t happen in the foreseeable future,” he said.

“Anywhere the company goes in growing our international business, our intentions will be to use Netsuite no matter what we are doing.

"We are in several places in China, we are also in Hong Kong, India and Australia. We also have a lot of work going on in South America - we haven’t deployed Netsuite there, but that will be coming too.”