QAD's lean manufacturing mission

Information Age (London, UK), August 10, 2004

"A customer wants three things from a software provider," asserts Pam Lopker, chairman and president of QAD, a US-based mid-market enterprise resource planning (ERP) software provider for manufacturing companies. "Its current services, a clear vision of where its products are heading towards in the future and to be treated well by the software company for the next five to 10 years."

Lopker claims that QAD offers all of these in abundance to its customers - and certainly, the company has an impressive 23-year history of providing manufacturing applications to customers that includes Ford, Gillette, Philips, Coca-Cola, Black &Decker and Johnson &Johnson. By selling to such companies at the plant-level, it has become a popular choice for companies that use the enterprise resource planning (ERP) megasuites (from companies such as SAP, PeopleSoft and Oracle) on a corporate level, but implement smaller packages in individual manufacturing plants and subsidiaries.

QAD has notched up these achievements in relative obscurity. Its global headquarters are based in the sleepy, Southern Californian seaside town of Carpinteria (population: 19,000) and the company has long been regarded as something of an also-ran (albeit one with respected technology) in the world of mid-market ERP. Around two-thirds of its annual sales are derived from its installed base of customers.

Given the fall-out that has occurred in the mid-market sector in recent years, perhaps that anonymity has protected QAD to some extent: most of its competitors have been acquired, some have gone out of business. But the mid-market landscape that remains is an intimidating place, overwhelmingly dominated by two companies. One is Microsoft, which bought QAD rivals Great Plains and Navision in 2001 and 2002, respectively in order to make a convincing foray into the sector. The other is SSA Global Technologies, which has made a series of acquisitions since emerging from Chapter 11 bankruptcy, most notably former QAD rivals Baan and Marcam. Both can boast sales of ERP applications that outstrip QAD's by a factor of around three.

In its favour, QAD has respected technology and a reputation for close attention to its user base. "QAD has a business model and product that suggests it spends more time listening to customers than its competitors," says Jim Shepherd, an analyst at AMR Research.

Lopker, meanwhile, argues that the company's applications enable organisations to think and operate globally while preserving their ability to meet local requirements by providing business-critical functions and processes at three levels: enterprise, extended enterprise and the networked enterprise.

That may be true, but it seems unlikely that QAD is about to step out of the shadows.