Supply chain execution market growing off shore
Catalyst International says the next market for supply chain execution may be in China and India.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 8/7/2007
It’s 1 a.m. Do you know where you’re customers are?
If your answer to that question is: Home in bed, you might be wrong, cautions Noah Dixon, vice president of product management for Catalyst International, a provider of supply chain execution software and warehouse consulting services.
“One of the things we’ve noticed over the last three or four months is that we get more hits at 1 a.m. on our Web site than at any other time of day,” says Dixon. “And what we’ve discovered is that it’s traffic from India and China.”
But it’s not just an increase in traffic. Dixon says that Asian visitors are hungry for information about supply chain management. “They’re looking at all the content we offer, and they’ll spend 15 minutes a visit on the site,” says Dixon.
What’s more, as Dixon has drilled down further, he has discovered that the visitors aren’t from multi-national companies doing business in China. They are from locally owned companies apparently looking for information on improving their operations.
Dixon believes there is a lesson in all of this for supply chain software providers. And that lesson may apply to anyone doing business in the developing world, or competing against companies from those parts of the world.
There’s a new focus on warehousing and distribution operations (for more on this, read warehousing in China in the August issue of Modern Materials Handling). “The Chinese companies we’ve dealt with are expert merchants and manufacturers,” says Dixon, “but modern logistics is new to them. They can’t do order turnarounds and meet the shipping and data requirements of their multi-national customers just with manpower.”
At the same time, Dixon adds, there isn’t a home-grown supply chain execution software industry to turn to for applications. “India has an established IT industry, but they do a lot of custom programming,” says Dixon. “There aren’t a lot of out-of-the box supply chain execution solutions available.”
That creates an opportunity for smaller software companies with under $100 million in revenue, like Catalyst. “The question we’re asking, and I think all of our competitors need to ask, is whether we spend money in China or not, and whether we do it now or wait,” says Dixon.
It also presents a challenge for the supply chain execution software industry. “In the U.S. and Europe, we have always sold our solutions on the basis of cost savings, especially from labor,” says Dixon. “Given that their cost of labor is so low, we have to present a different message.”
That’s going to be around the quality of customer service that comes from a best-of-breed supply chain execution solution, the ability to meet customer data requirements, and the ability to control those things that do represent a high cost to the business, like inventory and transportation.
It’s 1 a.m. Do you know where your customers are?
Software Alert! - July 2006
07/19/2006More supply chain execution trends
08/31/2002Supply chain execution software
07/31/1999
View All On-Demand Webcasts
