The past two years or so have been an interesting if not a tumultuous period for the Ottawa, Canada-based, privately-held Webplan Corporation (www.webplan.com), which felt compelled to further refine its original supply chain planning (SCP) and business-to-business (B2B) collaboration value proposition.. The vendor has refocused on highly actionable Response Management software (a subset of broader Corporate Performance Management [CPM] software, which is about communication and delivering actionable intelligence at the right time) for manufacturers and distributors, what it believes will be a growth market.
Thus, at the end of 2003, Webplan announced that changes made to its business direction in 2003—including a drive toward delivering value to manufacturing customers through Response Management software—has gained acceptance with both its manufacturing customers and strategic partners, laying the foundation for growth in 2004 and beyond. Despite the fact that many manufacturers have invested in enterprise resource planning (ERP) systems and many also have supply chain management (SCM) systems, most continue to use inopportune batch reports and pesky spreadsheets to manage their operations performance. These have proven to be inefficient and error-prone methods of supporting decision-making, resulting in reliance on "educated guesswork" rather than on accurate dynamic analysis to align decisions with strategic objectives.
For a detailed discussion of supply chain management—both planning and execution, see the tutorial Bridging the Reality Gap Between Planning and Execution.
Webplan, however, faces a number of challenges in its quest to further promote RapidResponse, its innovativeness notwithstanding. Namely, given its advanced planning systems (APS) heritage, Webplan appears to be ahead of the pack in applications for concurrently optimizing demand, order promise and inventory management, taking constraints into consideration. Yet, in many markets, Webplan is far from a household name, in part owing to its small size ($13 million in fiscal 2003 revenues) and the lower visibility of a privately-held vendor. Additionally, in most markets, it might be known either only as a SCP/APS provider or a combined optimized operational performance management/SCEM provider. These marketing gaps must be addressed for Webplan to progress to the position in the market justified by its broad product offerings.
Still, RapidResponse at this stage does not encompass the holistic view of the entire supply chain, which may still make one area more efficient at the expense of efficiency in other areas. For example, the product does not address transportation as a shared or coordinated service, which leaves the manufacturer's purchasing team to "own" the inbound goods, while someone else (sales, shipping, third-party logistics [3PL] provider, etc.) will own the outbound. There is not much integration of transportation and warehousing processes at this stage either. Nor do merchandise planners have much useful output from the system to decide which promotions and product assortments to run, and gauge different effects on demand.
Other collaborative SCM areas that Webplan has to better address in the future are—computer-aided design (CAD) document exchanges; sourced components and parts compatibility testing; pricing aggregation and fluctuations; cooperative marketing within trading partners; coordinated field and external services; international trade logistics (ITL) and accompanying documentation; payment adjudication; and so on.
That will not happen soon based on the product's devised roadmap, and on the vendor's limited resources, albeit with a notable cash position of $20 million and backing of its investors, GE Equity, Intel's 64 Fund, and TechnoCap. Namely, while RapidResponse 7.3 introduced Live Scorecard and enhanced financial analysis and engineering change analysis, the next release code-named "Aruba" and slated for the release in the second half of 2004 will be 100 percent Web-based, and will feature customer enabled setup, enhanced alerting (with links to Scorecards), as well as Cognos and other partner products' integrations.
The mitigating factor, though, is that on one hand most competitors do not cover all the bases of wider supply chain either. Indeed, the functional capabilities tend to reflect the given vendor's birthright, so that the vendors coming from the logistics place exhibit strong collaborative planning capabilities in transportation management, but are typically lighter in demand planning or in intelligent response to constraints and exceptions, and vice versa. On the other hand, the existence of so many vendors, with so many nuances in offerings, presents a challenge both to the vendors in differentiating their products and to the users in selecting a vendor.
Indeed, many other vendors can enable companies to efficiently manage trading relations, demand management and fulfillment processes. Companies such as Prescient Systems, Escalate, Demand Management, Descartes, Arzoon, RiverOne, WorldChain, SoftChain, Logility, Demantra, John Galt, PipeChain, VCommerce, Ortems, SeeCommerce, and Tradec (now part of Agile Software) in supply chain event management (SCEM), visibility, and performance monitoring are able to connect disparate systems to provide all the parties with near-real-time information on current movements and trends.
Adexa too has been posting growth and good financial results lately, economic hardships notwithstanding, by providing a homegrown like solution that is flexible and integrated on a single data model and can be incrementally implemented as required. One should also note the capabilities of Viewlocity, which came as a result of a three-way merger and that combines former SynQuest's "quick-solving" planning and execution capabilities that have been linked with former Viewlocity and Tilion's event management capabilities (see Merger Mania at Its Extremes). The combined solution aims at supporting the real time enterprise through adaptive supply chain capabilities, including explicitly planning to maximize supply chain profit in a dynamic environment, while meeting or exceeding customer expectations.
Furthermore, pure-SCM leaders, i2 and Manugistics, have made forays into marrying these components of SCM, while leveraging the best practices across multiple industries. In a mass-manufacturing environment these systems may still provide deeper granularity for operational planning, while Webplan is more oriented to problem identification and resolution, even if it is not closely tied to the SCE layer yet. Not to mention the former core-ERP eight-hundred-pound-gorillas' (i.e., SAP, Oracle, PeopleSoft, SSA Global, QAD, etc.) ever increasing footprint in the SCM market, and their displeasure with the likes of Webplan "piggybacking" on their install bases.
At the same time, other best-of-breed SCP vendors have been stripping down and streamlining products sets, given their cumbersome and confusing offering in the past, which have consequently resulted with a bad image in many cases. An emerging SCP approach espoused by the likes of Optiant, SmartOps and LogicTols has been to use inventory optimization techniques that create plans to minimize inventories across the network, but with achieving desired customer service targets.
Therefore, owing to the plethora of solutions with no immediate or apparent differences, Webplan needs to more aggressively spread the message of offering much more than glorified event management applications, whose stand-alone application provider days are numbered. Even without the extraneous market drivers, like recession, the future of a plethora of SCEM vendors remaining as viable stand-alone entities would be highly dubious. Like the former material requirements planning (MRP) providers, which are nowadays all but extinct due to either their evolution or merger into materials resource planning (MRPII) first, and eventually in manufacturing-oriented ERP providers (or the demise of the less decisive others), today's SCEM vendors simply cannot remain as viable stand-alone component providers. Consequently, as MRP stands today, it is part and parcel of ERP, SCEM, being rather an enabling technology in a supply chain network than an application on its own, will gradually be blended into the SCM family of "matter-of-course" modules, losing thereby its functional sovereignty.
Also, while RapidResponse is an impressive product that adds some response value proposition to customer demand events, it nonetheless does not necessarily insure the execution of plans, given its output remains a mere simulation. The challenge and irony, that is not only applicable to Webplan, is that not many companies are yet able to connect SCM operational metrics to the strategic corporate metrics. Given human nature, Webplan, by bringing greater transparency to supply chain operations, may even be stonewalled by some managers because they perceive that it will prevent the covering up of unattractive figures or pushing the blame to someone else (see Why Most Balanced Scorecards are Subverted).
Thus, at the end of 2003, Webplan announced that changes made to its business direction in 2003—including a drive toward delivering value to manufacturing customers through Response Management software—has gained acceptance with both its manufacturing customers and strategic partners, laying the foundation for growth in 2004 and beyond. Despite the fact that many manufacturers have invested in enterprise resource planning (ERP) systems and many also have supply chain management (SCM) systems, most continue to use inopportune batch reports and pesky spreadsheets to manage their operations performance. These have proven to be inefficient and error-prone methods of supporting decision-making, resulting in reliance on "educated guesswork" rather than on accurate dynamic analysis to align decisions with strategic objectives.
For a detailed discussion of supply chain management—both planning and execution, see the tutorial Bridging the Reality Gap Between Planning and Execution.
Webplan, however, faces a number of challenges in its quest to further promote RapidResponse, its innovativeness notwithstanding. Namely, given its advanced planning systems (APS) heritage, Webplan appears to be ahead of the pack in applications for concurrently optimizing demand, order promise and inventory management, taking constraints into consideration. Yet, in many markets, Webplan is far from a household name, in part owing to its small size ($13 million in fiscal 2003 revenues) and the lower visibility of a privately-held vendor. Additionally, in most markets, it might be known either only as a SCP/APS provider or a combined optimized operational performance management/SCEM provider. These marketing gaps must be addressed for Webplan to progress to the position in the market justified by its broad product offerings.
Still, RapidResponse at this stage does not encompass the holistic view of the entire supply chain, which may still make one area more efficient at the expense of efficiency in other areas. For example, the product does not address transportation as a shared or coordinated service, which leaves the manufacturer's purchasing team to "own" the inbound goods, while someone else (sales, shipping, third-party logistics [3PL] provider, etc.) will own the outbound. There is not much integration of transportation and warehousing processes at this stage either. Nor do merchandise planners have much useful output from the system to decide which promotions and product assortments to run, and gauge different effects on demand.
Other collaborative SCM areas that Webplan has to better address in the future are—computer-aided design (CAD) document exchanges; sourced components and parts compatibility testing; pricing aggregation and fluctuations; cooperative marketing within trading partners; coordinated field and external services; international trade logistics (ITL) and accompanying documentation; payment adjudication; and so on.
That will not happen soon based on the product's devised roadmap, and on the vendor's limited resources, albeit with a notable cash position of $20 million and backing of its investors, GE Equity, Intel's 64 Fund, and TechnoCap. Namely, while RapidResponse 7.3 introduced Live Scorecard and enhanced financial analysis and engineering change analysis, the next release code-named "Aruba" and slated for the release in the second half of 2004 will be 100 percent Web-based, and will feature customer enabled setup, enhanced alerting (with links to Scorecards), as well as Cognos and other partner products' integrations.
The mitigating factor, though, is that on one hand most competitors do not cover all the bases of wider supply chain either. Indeed, the functional capabilities tend to reflect the given vendor's birthright, so that the vendors coming from the logistics place exhibit strong collaborative planning capabilities in transportation management, but are typically lighter in demand planning or in intelligent response to constraints and exceptions, and vice versa. On the other hand, the existence of so many vendors, with so many nuances in offerings, presents a challenge both to the vendors in differentiating their products and to the users in selecting a vendor.
Indeed, many other vendors can enable companies to efficiently manage trading relations, demand management and fulfillment processes. Companies such as Prescient Systems, Escalate, Demand Management, Descartes, Arzoon, RiverOne, WorldChain, SoftChain, Logility, Demantra, John Galt, PipeChain, VCommerce, Ortems, SeeCommerce, and Tradec (now part of Agile Software) in supply chain event management (SCEM), visibility, and performance monitoring are able to connect disparate systems to provide all the parties with near-real-time information on current movements and trends.
Adexa too has been posting growth and good financial results lately, economic hardships notwithstanding, by providing a homegrown like solution that is flexible and integrated on a single data model and can be incrementally implemented as required. One should also note the capabilities of Viewlocity, which came as a result of a three-way merger and that combines former SynQuest's "quick-solving" planning and execution capabilities that have been linked with former Viewlocity and Tilion's event management capabilities (see Merger Mania at Its Extremes). The combined solution aims at supporting the real time enterprise through adaptive supply chain capabilities, including explicitly planning to maximize supply chain profit in a dynamic environment, while meeting or exceeding customer expectations.
Furthermore, pure-SCM leaders, i2 and Manugistics, have made forays into marrying these components of SCM, while leveraging the best practices across multiple industries. In a mass-manufacturing environment these systems may still provide deeper granularity for operational planning, while Webplan is more oriented to problem identification and resolution, even if it is not closely tied to the SCE layer yet. Not to mention the former core-ERP eight-hundred-pound-gorillas' (i.e., SAP, Oracle, PeopleSoft, SSA Global, QAD, etc.) ever increasing footprint in the SCM market, and their displeasure with the likes of Webplan "piggybacking" on their install bases.
At the same time, other best-of-breed SCP vendors have been stripping down and streamlining products sets, given their cumbersome and confusing offering in the past, which have consequently resulted with a bad image in many cases. An emerging SCP approach espoused by the likes of Optiant, SmartOps and LogicTols has been to use inventory optimization techniques that create plans to minimize inventories across the network, but with achieving desired customer service targets.
Therefore, owing to the plethora of solutions with no immediate or apparent differences, Webplan needs to more aggressively spread the message of offering much more than glorified event management applications, whose stand-alone application provider days are numbered. Even without the extraneous market drivers, like recession, the future of a plethora of SCEM vendors remaining as viable stand-alone entities would be highly dubious. Like the former material requirements planning (MRP) providers, which are nowadays all but extinct due to either their evolution or merger into materials resource planning (MRPII) first, and eventually in manufacturing-oriented ERP providers (or the demise of the less decisive others), today's SCEM vendors simply cannot remain as viable stand-alone component providers. Consequently, as MRP stands today, it is part and parcel of ERP, SCEM, being rather an enabling technology in a supply chain network than an application on its own, will gradually be blended into the SCM family of "matter-of-course" modules, losing thereby its functional sovereignty.
Also, while RapidResponse is an impressive product that adds some response value proposition to customer demand events, it nonetheless does not necessarily insure the execution of plans, given its output remains a mere simulation. The challenge and irony, that is not only applicable to Webplan, is that not many companies are yet able to connect SCM operational metrics to the strategic corporate metrics. Given human nature, Webplan, by bringing greater transparency to supply chain operations, may even be stonewalled by some managers because they perceive that it will prevent the covering up of unattractive figures or pushing the blame to someone else (see Why Most Balanced Scorecards are Subverted).
No comments:
Post a Comment