Kenandy raises $10.5M for cloud “social manufacturing”

Kenandy is taking the old world of industrial manufacturing into the new world of the cloud with its “social manufacturing” platform. And today, the company is coming out of stealth and announcing it has raised $10.5 million in a first round of funding led by Kleiner Perkins Caufield & Byers.

Sitting atop Salesforce.com’s Force.com cloud software, Kenandy is creating a service that combines the nuts-and bolts of manufacturing software with cloud technology and social media. The company hopes to modernize manufacturing right under the nose of big enterprise resource management software companies such as SAP.

In the past two decades, manufacturing has moved from a vertical operation — where divisions within the same company all interact to build something — to a horizontal one, where various companies work together to make a product. But the software used to manage all of this hasn’t been adapted to deal with the new structure.

The Redwood City, Calif.-based business was started by Sandra Kurtzig, founder of Ask Group, which pioneered manufacturing management within the walls of a large corporation. With Kenandy, she saw the need for collaboration beyond the walls of a company.

“By building the core manufacturing applications on a social platform, we’re providing the structure to use the new tools of social media and collaboration for greater efficiencies in global supply chain networks,” Kurtzig said.

This company almost didn’t get off the ground. Kurtzig sold Ask Group to Computer Associates in the 1990s and then she retired to Hawaii. Marc Benioff, CEO of Salesforce.com and a neighbor of Kurtzig’s, convinced her to come out of retirement and start the business.

“I said, Marc, I checked my bucket list, and coming out of retirement to run another company wasn’t on it,” Kurtzig said. “He replied, ‘You’re old and blind – check it again.'”

Other investors include Salesforce.com and the law firm Wilson Sonsini Goodrich & Rosati. Ray Lane, managing partner at Kleiner Perkins, will join Kenandy’s board. He said Kurtzig has figured out how to innovate in a market that hasn’t seen any significant innovation for two decades.

Kenandy’s team includes Rod Butters, chief marketing officer, and Pravin Kumar, chief technology officer. Both have extensive experience in software-as-a-service and enterprise supply chain businesses.

Kenandy has introduced a limited product, the Kenandy Manufacturing Cloud, to potential customers. It performs a wide range of functions such as inventory management, engineering management, purchasing, production, and resource planning. But it can do so with cloud-like benefits that allow for greater speed, global operation, mobile usage, and social sharing. Initial customers are expected to begin using the service before the end of the third quarter.

Kenandy was founded a year ago. Kurtzig will be part of Benioff’s keynote speech this week at the Dreamforce ’11 conference in San Francisco. The company declined to disclose the number of employees. Rivals include Oracle, SAP, NetSuite, and Plex Systems.