In the mid-1990’s: There was an increased focus on lowering costs as companies saw the opportunity to improves supply chain related parts of their business such as order management, manufacturing, transportation, and to a lesser degree warehousing ( distribution was largely considered a poor ‘step child’ and was typically thought of as the back end of manufacturing). Companies realized that their legacy systems we’re inadequate in capitalizing on these savings, and packaged software started to emerge: OMS, MRP and MRP II, TMS, and WMS (MA included). Companies were very much focused on processes within the four walls of the enterprise. For all intents and purposes, customers and suppliers were ‘black boxes’. The only communications with trading partners were either batch in nature (EDI, which was still on the rise) or manual- fax, phone call, etc (not even email!). (depending on your audience, you may or may not want to specifically discuss MA during this section). In regards to MA: MA had success capitalizing on companies’ need for its packaged WMS and TMS solutions. More importantly, MA saw the opportunity to help companies deal with a whole set of other business challenges. At the time, there were many Industry initiatives, such as QR, and emerging standards from organizations such as VICS and UCC…which created a whole another set of short-comings in companies’ legacy systems. Not surprisingly, MA focused on many industry that first adopted these initiatives: retail, consumer goods, apparel, food and grocery.
During the end of the 1990’s Strong economic conditions but an emphasis on growth. Much was organic (new stores, new product lines, new channels, and globalization). The rise of the internet and dot com boom added additional channels for revenue growth, and also dramatically changed the way companies looked at the supply chain. To support this growth, many companies invested in new planning technologies. ERP emerged as the successor to MRP II, helping to manage an entire enterprise and consolidate disparate systems (though ERP was mostly internally focused). Companies also invested in Supply Chain Planning systems, with inventory, transportation and demand planning software opening companies’ eyes to broader supply chain issues and the value of ‘collaborating’ across the enterprise. SCP systems offered the promise of great benefits, such as reducing excess inventory in the supply chain. Companies began to realize that their supply chain costs and capabilities were no longer a solely dependent on their internal processes, but very much dependent on their ability to work more closely with their trading partners (suppliers, customer, transportation providers included). In general, there was an increased awareness by many companies in the overall capabilities of their broader supply chain than on just their individual enterprise. New ways of doing business also began to try to connect companies on a more real time basis- e-marketplaces and B2B software drove this trend. Our customer’s distribution and fulfillment capabilities became strained while: sustaining rapid growth, handling more complex supply chains, and executing on optimized plans generated by new SCP systems. Supply chain related processes like fulfillment were now critical enablers or obstacles to our customers’ fundamental corporate strategies and thus much more in the forefront of c-level stakeholders. As the 20 th century drew to an end, the luster on planning began to fade. While SCP has the potential to drive great savings (and it does in many cases) planning solutions require solid, adaptable execution capabilities to realize the benefits promised. In regards to MA: By the end of the decade, MA had become very successful (and in fact became the leader in the WMS industry) and very strong in the TMS industry. But the market dynamics above and our customers’ requirements required us to continue to expand our scope. MA expanded its offering to included optimization, advanced TMS, event and performance management, and TPM (supply chain collaboration). As MA made it its mission to meet these demands, our position in the market took us from being the market leader in the niche WMS industry, to but now the major solutions provider in the strategic SCE market.
As the 21 st century progressed: The economy continued to lag and companies became far more focused on the bottom line and profitability. The top-line mentality took a back seat. ERP vendors (SAP, Oracle, Peoplesoft and JDE) expanded their footprints. The natural growth area was into supply chain planning and customer relationship management (CRM). Enterprises responded very positively to the idea of a single planning platform. At the same time, having implemented independent execution components (warehousing, transportation etc) larger SCE vendors began work on providing a parallel to the planning platform- Integrated Logistics. There are great benefits to be realized through an integrated, yet modular approach to supply chain execution (in the same way there is for planning). Technology and organizational advancements also led to much greater integration across enterprises. Companies are looking to synchronize supply chains and better manage inventory, shipments and orders from source to consumption. The ubiquitous-ness of the internet, the acceptance XML and web services and adoption of new standards, such as UCCnet, have all lead to greater connectivity between companies. With new technologies on the horizon, such as RFID, this will only continue to draw companies closer. In regards to MA: Because of all the things we’ve discussed, the scope of the MA SCE suite has continued to evolve. If you look at where MA is today and our vision for the future, points to be made: Obviously, our customers are no longer solely focused on revenue and growth, but on profitability and investment into solutions that are strategic, but generate tangible return on investment. Synchronization of internal and external process is more important than ever, and the importance of these capabilities ranges from being tactical necessity to competitive advantage. Our customers have demanded from us a solutions that meets all of their SCE needs, and eliminates the ‘functional silos’ common in a collection of point solutions. MA’s Comprehensive SCE solutions addresses the needs of our customers supply chain, from source to consumption. We are finding a “comfort zone” in our focus on our customer’s execution related business functions, and co-existence with their platform of planning applications (more and more consolidated in their ERP systems).
For example, the elimination of excess stock at many of our customers narrowed their margin for error in regards to order fulfillment. So in addition to the increased importance of systems like WMS and TMS in sustaining growth and more complicated fulfillment, WMS, TMS, and the entire scope of Supply Chain Execution (SCE) became an enormous part in realizing the full benefit of optimized supply chains. (allude to the shift in capital spending from SCP to SCE). As MA made it its mission to meet these demands, our position in the market took us from being the market leader in the niche WMS industry, to but now the major solutions provider in the strategic SCE market.
The result of MA’s 14 years of solution development and deployment is an integrated set of supply chain execution solutions. Today, these solution sets are referred to as “Integrated Logistics Solutions™”. These solutions enables company to effectively manage the flow of goods, using best practices from source to consumption. These solutions also place heavy emphasis on enabling companies to work effectively with their trading partners on both ends of their supply chain, which is critical in today’s business environment.
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Best of Breed vs. ERP Solutions for Supply Chain Management Matthew E. Menner Vice President | Transportation Manhattan Associates, Inc.
1995: Focus on Internal Processes <ul><li>Inwardly focused </li></ul><ul><li>Industry initiatives </li></ul><ul><ul><li>Quick Response </li></ul></ul><ul><ul><li>EDI </li></ul></ul><ul><ul><li>Bar Coding </li></ul></ul><ul><li>Rigid legacy systems unable to adapt </li></ul><ul><li>Distribution lacked strategic focus </li></ul><ul><li>Visibility outside of the enterprise limited to EDI and manual methods </li></ul>Challenges / Trends Order Management Manufacturing Legacy Systems Warehousing Transportation EDI, Fax EDI, Fax
1999: Awareness of Broader Supply Chain <ul><li>Growth, growth, growth </li></ul><ul><li>ERP replaces legacy systems </li></ul><ul><li>Promise of supply chain planning </li></ul><ul><li>Awareness of the entire supply chain </li></ul><ul><li>Execution required to fulfill optimized plans </li></ul>Supply Chain Planning ERP Customers Suppliers Warehousing Transportation EDI, Fax EDI, Fax Challenges / Trends
2003: Integrated Logistics <ul><li>Focus on profitability & ROI </li></ul><ul><li>Integration across functional silos </li></ul><ul><li>Real-time ties with trading partners </li></ul><ul><li>Emergence of two paradigms: ERP & SCE </li></ul>Challenges / Trends ERP SCE Warehousing Management Systems Transportation Management Systems Trading Partner Management Customer Relations Planning Procurement Source to Consumption Customers Suppliers
Decision Criteria Is this decision driven by technology or by business process? Financial Strategies Corporate Strategies Business Initiatives SHAREHOLDER VALUE Process Change Enabling Technologies
Why Shift From Planning to Execution? 6 months Now Planning Horizon 1-2 days accuracy & usability of supply chain data ERP, SCP SCE Despite benefits received from planning, companies need execution to cope with volatility and demands of their trading network
What is Supply Chain Execution? A Single SCE Solution ! TMS WMS SCP ERP CRM Execution Planning Collaboration & Optimization OMS
Technology Adoption Curve The impact of SCE is now being recognized
Integration: Actual Choice VS. Customers Customers Customers Customers Customers Customers Customers Customers Customers Customers RF MHE Voice Recog. RF ID Carriers Time & Attend. Customers Suppliers Customers Customers Customers Customers Customers Customers Customers Customers Customers Customers RF MHE Voice Recog. RF ID Carriers Time & Attend. Customers Suppliers WM/TMS Module ERP SCE ERP
Integrated Logistics Solutions™ Managing the flow of goods from source to consumption Logistics Hub Management Yard/Dock Management Order Entry Order Visibility Appointment Scheduling Warehouse Management Transportation Procurement Labor Management/ Slotting Optimization Transportation Planning & Execution Supplier Enablement/ Visibility Reverse Logistics Management Distributed Order Management Stores/ Customers Distribution Shipment Management Trading Partner Integration R F I D
For Additional Information 678.597.7091 [email_address] www.manh.com 2300 Windy Ridge Parkway 7th Floor Atlanta, Georgia 30339 USA Matthew E. Menner VP, Transportation Manhattan Associates, Inc. 781.238.5860 [o] 617.851.8485 [w] [email_address]