ERP and supply chain: Emerging vendors support global business models
The severe economic downturn of the past couple years has caused manufacturers to take a closer look at how they run their businesses. And this period of self examination has made two things clear: When these factors are taken into account, it's not surprising that a large percentage of the business software vendors who have managed to hold their own financially during this turbulent economic p...
The severe economic downturn of the past couple years has caused manufacturers to take a closer look at how they run their businesses. And this period of self examination has made two things clear:
Operating a global supply chain can improve a manufacturing company's bottom line by, among other things, providing access to a broader base of suppliers who will compete on both capabilities and price; and
Global supply chains must be monitored closely—in real time if possible—because they introduce new elements of risk, such as a higher potential for late deliveries as goods travel greater distances, and the possibility of the company's products being sold on the black market.
When these factors are taken into account, it's not surprising that a large percentage of the business software vendors who have managed to hold their own financially during this turbulent economic period have solutions that address these issues in one form or another. It's also no coincidence that companies whose applications focus on managing business processes that span the enterprise and/or supply chain make up the largest group of vendors—17 of the 40—on the 2009 Manufacturing Business Technology Emerging 40 Software Vendors list.
Several of these companies are benefiting, at least in part, from the choice to offer their solutions in the Software-as-a-Service (SaaS) model. This approach, sometimes also referred to as “cloud computing,” is becoming increasingly attractive to business executives seeking the benefits of new technology without the high costs and long implementation times that traditionally have come with installing a new ERP or supply chain solution.
For instance, Plex Systems, among the first to offer a SaaS-based ERP system, claims to be attracting new customers at a record rate. “The triumph of the SaaS model over outdated on-premise software continues to accelerate,” Plex Systems President and CEO Mark Symonds said in announcing the company's total revenue had grown 14 percent in the third quarter of 2009 when compared with the same period in 2008.
Of course, it's not the SaaS model alone that is allowing these vendors to buck prevailing economic trends.
For example, Amitive bills itself as the first company to offer “supply chain management in the cloud.” Its Amitive Unity platform is geared toward helping companies communicate with contract manufacturers in real time around issues related to demand forecasts, shared capacity, and inventory. Early adopters of the Amitive platform say the ability to configure it to match the way they want to do business is just as important as avoiding the hassles that typically come with purchasing and installing an on-premise solution.
Thomas Pichler, CEO of Orthera, a recent startup that sells custom-made orthotics to shoe stores, believes the Amitive Unity platform adapted perfectly to his company's unique business model, which involves scanning customers' feet at the retail location and sending that information back through the supply chain for order processing.
“Because this kind of business model was unheard of just a few years ago, taking any off-the-shelf software product with a pre-defined data structure meant that we would have compromised the very nature of how we run our business and what we promise the customer,” says Pichler. “Retrofitting an existing solution—if it could be done at all—would have resulted in not only higher costs to us, but more importantly, compromising the consumer experience.”
Vendors like Exostar, FusionOps, New Momentum, Panjiva, and River Logic have similar stories of attracting new business by being able to solve specific supply chain problems. See the following pages for more information about these emerging ERP and supply chain vendors.
ERP and supply chain emerging software vendors list
Amitive Inc. , www.amitive.com
Flagship product : Amitive Unity, supports collaborative supply chain management
Most recent upgrade : Unity 5.0, billed as the first cloud-based supply chain management system
Major business problems addressed : Helping companies maintain real-time communication with contract manufacturers on issues related to demand forecasts, capacity, and inventory
Factors driving growth : Interest in systems that can be installed quickly and adapt to the user company's business model.
Specific customer benefits : Orthera, a startup that sells custom-made orthotics to shoe stores, was able to implement a unique business model exactly as envisioned.
Compiere Inc. , www.compiere.com
Flagship product : Compiere ERP, an open-source ERP solution
Most recent upgrade : Compiere Cloud Edition, a comprehensive business application suite with functionality ranging from accounting to warehouse management running on the Amazon Elastic Compute Cloud (Amazon EC2).
Major business problems addressed : Enabling manufacturing and distribution companies to improve productivity, lower costs, and improve customer service.
Factors driving growth : Companies' desire to replace outdated ERP systems or complement centralized systems, such as SAP or Oracle, with more modern systems.
Specific customer benefits : OSG Europe, the European arm of a multinational manufacturer of precision cutting tools used in the automotive, aerospace and precision instrument industries, deployed Compiere to standardize processes across eight locations.
Exostar , www.exostar.com
Flagship product : The Supply Chain Platform, promotes timely, accurate, efficient, and secure collaboration among constituents throughout global, multi-tier supply chains.
Most recent upgrade : Partner information management solution allows companies to confirm the financial and corporate health of their suppliers in real-time, at any point in time.
Major business problems addressed : Manufacturers need to reduce the cost and risk of leveraging global supply chains, without sacrificing their competitive positions.
Factors driving growth : Running processes on the Exostar Supply Chain Platform gives companies the ability to scale their IT infrastructure up or down as business conditions warrant.
Specific customer benefits : Aerospace industry leader BAE Systems used the Supply Chain Platform to automate and standardize its purchase-to-pay process, reducing cycle times and operating expenditures while improving productivity across the ecosystem.
FusionOps , www.fusionops.com
Flagship product : Streamline, on-demand solution for procurement and supplier collaboration linked to a customer's on-premise ERP system.
Most recent upgrade : FusionOps Insight, an on-demand business intelligence solution.
Major business problems addressed : Improving visibility into business performance related to the supply chain, procurement, supplier performance, and inventory.
Factors driving growth : The unprecedented pressure companies are facing to increase revenues, cut costs, run their businesses on facts, and get more value from their ERP investments.
Specific customer benefits : Major Japanese automaker lacked visibility into the procurement process, making it difficult to predict the costs of new cars. FusionOps helped shorten the product development cycle by minimizing material shortages and delays, improving visibility into material costs to support pricing models.
Llamasoft , www.llamasoft.com
Flagship product : Supply Chain Guru, supply chain design software
Most recent upgrade : Inventory optimization, a strategic supply chain solution incorporating network optimization, inventory optimization, and simulation in a single application with a single, common database.
Major business problems addressed : Enabling organizations to identify “high-impact” changes to the supply chain that can significantly reduce costs while simultaneously meeting or exceeding customer service requirements.
Factors driving growth : The solution allows customers to answer a broader set of supply chain questions with one technology.
Specific customer benefits : North America's largest manufacturer of residential and commercial roofing used Llamasoft's network optimization technology to determine the optimal structure for its production and distribution network.
New Momentum , www.newmo.com
Flagship product : Enterprise Brand Protection, an on-demand solution to help companies track counterfeit, black market, or gray market activities related to their products.
Most recent upgrade : MAP Monitor, new solution stops the brand, margin, and channel loyalty losses resulting from rogue distributors selling products at lower-than-minimum advertised price (MAP).
Major business problems addressed : Helping companies stem revenue loss and brand erosion stemming from black market and gray market activities.
Factors driving growth : The escalating problem of counterfeiting and channel violations.
Specific customer benefits : A major pharmaceutical manufacturer was losing $2 billion annually to counterfeit sales. New Momentum helped the company uncover multiple sources of counterfeit sales, saving the company 80 percent of what it had been spending on test buys to identify counterfeits, among other savings.
OB10 , www.ob10.com
Flagship product : OB10 is a secure, business-to-business global network that enables buyers to receive electronic invoices directly from their suppliers.
Most recent upgrade : PO Distribution and PO Flip allow suppliers to receive PO information and “flip” it into an accurate invoice; Pre-delivery invoice validation ensures that each invoice is validated before it's delivered to the customer.
Major business problem addressed : The OB10 network allows for the electronic transmission of invoices between buyers and suppliers. The network provides fast delivery and confirmation of the receipt of invoices, accelerating payment cycles and improving cash management.
Factors driving growth : The growing desire among business executives to streamline all business processes.
Specific customer benefits : OB10 offers benefits to a variety of Fortune 500 organizations as well as their suppliers. For customers, OB10 provides a customizable electronic invoicing solution where organizations can connect to their suppliers and receive invoice data—regardless of either company's accounting structure or format. For suppliers, OB10 ensures that invoice data is delivered immediately, offering the ability to be paid more predictably, improving cash management.
Panjiva , www.panjiva.com
Flagship product : Panjiva Alerts identifies meaningful changes and unusual activities in a supply chain, on a monthly basis.
Most recent upgrade : Panjiva SinoScreen, a new solution designed to help U.S. companies quickly determine which of their Chinese suppliers are at greatest risk.
Major business problems addressed : Helping companies stay abreast of potential risks related to offshore suppliers.
Factors driving growth : Greater concern about the risk of dealing with new suppliers in global supply chains.
Plex Systems , www.plex.com
Flagship product : Plex Online, an on-demand ERP suite
Most recent upgrade : Support for open database connectivity (ODBC), making it easier for users to access data from manufacturing operations and combine it with data from other sources as required to generate custom reports.
Major business problems addressed : The growing desire for flexible, low-cost business systems that can be implemented quickly.
Factors driving growth : Growing popularity of the SaaS model
Specific customer benefits : Jagemann Stamping Company deployed Plex Online to reduce ongoing IT maintenance costs, enabling consistent real-time reporting and information access, and supporting improved quality and traceability.
River Logic , www.riverlogic.com
Flagship product : Enterprise Optimizer, a suite of advanced planning and decision-support solutions
Most recent upgrade : Cost-to-Serve, solution can model both manufacturer and retail activities to develop optimal processes for maximizing customer service while minimizing operational costs.
Major business problems addressed : Enables users to optimize across multiple, inter-dependent options to financial outcomes (profit, cash flow, minimum cost, working capital, etc.).
Factors driving growth : Pressure on companies to understand and optimize business decisions to maximize profits and cash flow.
Specific customer benefits : A large carpet manufacturer used Enterprise Optimizer to determine if it should eliminate two product families that contributed negatively to overall performance, saving $3 million in capital expenditures and $600,000 in operating costs.
RollStream , www.rollstream.com
Flagship product : Enterprise Community Manager, a Web-based platform for establishing secure, online communities of suppliers or customers.
Most recent upgrade : RollStream Registration, Web 2.0 solution that helps companies easily register new suppliers or vendors.
Major business problems addressed : Organizing, rationalizing, and integrating data in a way that makes it easier to share timely, accurate information with supply chain partners.
Factors driving growth : Cloud-based solutions help manufacturers gain control of partner master data and collaborate more effectively with customers and suppliers.
Specific customer benefits : RollStream is helping Ethicon, a division of Johnson & Johnson, create platforms in which members of various communities—including distributors and end customers—can more easily communicate about how new products are brought to the market and then used once available.
Smart Software , www.smartcorp.com
Flagship product : SmartForecasts, an advanced demand forecasting, demand planning, and inventory optimization solution
Most recent upgrade : SmartForecasts Version 8.2. Enhancements include the ability to handle an expanded variety of forecasting situations—including those made more difficult by current economic challenges, such as increased demand volatility, stocking shortages and surpluses, and uncertain cash flow.
Major business problems addressed : Helps manufacturers make the best use of corporate data to forecast sales, product demand, safety stock, inventory levels, and many other key business variables.
Factors driving growth : The growing need for manufacturers to keep costs down while satisfying customer requirements.
Specific customer benefits : Godiva Chocolatier has used SmartForecasts together with the company's Web-based reporting tools to increase forecast accuracy by 60 percent, cut finished product inventory levels by $2 million, and maintain 99.5 percent service levels.
SupplierSoft , www.suppliersoft.com
Flagship product : An on-demand supplier relationship management solution built on Force.com, the multi-tenant SaaS platform from salesforce.com.
Major business problems addressed : Managing supplier risk by making sure all components coming from suppliers comply with quality, environmental, and other standards.
Factors driving growth : The need to manage risk in global supply chains.
Specific customer benefits : KLA-Tencor, maker of equipment for the semiconductor industry, uses the SupplierSoft solution to manage the movement of product definition data from the company's engineering and production systems to systems used by a field-service organization.
Terra Technology , www.terratechnology.com
Flagship product : Demand Sensing, a demand sensing and inventory optimization solution for consumer goods companies.
Most recent upgrade : Multi-Enterprise Demand Sensing, delivers better end-to-end planning by creating a single, more accurate forecast that analyzes and reconciles multiple daily demand signals.
Major business problems addressed : Helps consumer goods manufacturers keep up with volatile customer demand.
Factors driving growth : Increased demand volatility created by uncertain economic conditions.
Specific customer benefits : “ConAgra Foods selected Terra Technology's Multi-Enterprise Demand Sensing solution to improve short-term forecast accuracy, reduce inventory, and improve cash flow,” said Steve Vielmetti, VP, demand planning and supply chain optimization, ConAgra Foods. “MDS will enable us to more capably predict changes in consumer behavior, helping us reduce safety stock by up to 15 percent and reduce costs in our supply chain.”
Treeno Software , www.treenosoftware.com
Flagship product : ECM Suite, an enterprise content management platform
Most recent upgrade : Integrated management modules for users of Salesforce.com and Intuit QuickBooks
Major business problems addressed : Allows companies to store a wide variety of documents in a central repository, where they can be used for internal and external information sharing.
Factors driving growth : The need to manage the explosion in the numbers and types of documents generated in corporations.
Vendavo , www.vendavo.com
Flagship product : Enterprise Pricing Suite
Most recent upgrade : Enterprise Pricing Suite available on Force.com platform from salesforce.com
Major business problems addressed : Vendavo combines pricing science, pricing best practices, and enterprise-class software to drive improvements in average prices at every stage of the pricing process, from segmentation to deal close.
Factors driving growth : The need for companies to explore all avenues, including strategic pricing, to improve profit margins.
Specific customer benefits : The Vendavo solution helps Eastman Chemical determine the best price for each single transaction by giving company executives, pricing managers, and sales people up-to-the-moment snapshots of all the factors that go into setting prices.
Zilliant , www.zillliant.com
Flagship product : A pricing optimization suite, with functionality for analyzing, managing, and maximizing profit margins.
Most recent upgrade : Margin Insight 7.0. The newest version of Zilliant's solution for analyzing the source of margin leakage employs proprietary scientific intelligence to uncover new opportunities for increasing profitability.
Major business problems addressed : Zilliant delivers clear and specific pricing answers that help manufacturers ensure they are getting the best price—and not leaving money on the table—for each transaction.
Factors driving growth : The need for companies to explore all avenues, including strategic pricing, to improve profit margins.
Specific customer benefits : Zilliant helped a building products manufacturer simplify an extremely complex pricing process that was resulting in as many as 50 percent of sales orders transacted below lowest-approved prices. Within six months of applying Zilliant's tool, the company had substantially increased profit margins.
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.