The best laid plans
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 8/30/2005
Earlier this month, Manhattan Associates (877-596-9208) agreed to pay $50 million to acquire Evant (415-283-1880), a provider of supply chain planning and replenishment systems.
That the leading best-of-breed provider of supply chain execution (SCE) solutions, like warehouse (WMS) and transportation management (TMS) systems, is jumping into supply chain planning says something about how the world of supply chain management is changing.
For one, the acquisition takes Manhattan’s solutions from the warehouse into the executive suites, where major decisions are made. That’s an area that ERP players have had to themselves.
For another, it demonstrates just how the lines between execution and planning, two disciplines that were once distinct, are beginning to blur.
Manhattan says the move was a natural once the company began offering labor and transportation management. Those two execution systems require a certain amount of advance planning to make the best use of constrained resources like labor, trucks and trailers.
“As the lines grayed, we asked ourselves whether it makes sense to start thinking about the planning, replenishment and forecasting side of the business,” says Eddie Capel, senior vice president of product management at Manhattan.
The answer was “yes” for more reasons than just thinking outside the lines. Manhattan, like other SCE providers, is facing stiffer competition from ERP providers who now offer planning and execution solutions.
What’s more, the struggles of stand-alone planning vendors like i2 (800.926-9286) and Manugistics (301-255-5000) potentially opened the door to more competition, especially from end-users who want to reduce the number of vendors they deal with. To that end, Manhattan now offers a complete supply chain management platform.
Beyond the business benefits, there may be operational reasons to bring execution and planning together, according to Steve Banker, service director, supply chain management, ARC Advisory Group (781-471-1000). “In the past, when we talked about inventory optimization, we were really talking about maintaining the minimum level of safety stock needed inside a DC to meet customer service levels,” says Banker. “That’s a WMS function.”
The real gains come from looking at the whole flow of inventory, from the manufacturing plant through the distribution centers and on to the end customer. That’s a process known as multi-echelon inventory optimization. “That is something that a replenishment planning solution does,” says Banker. “There is a fit between these things.”
In fact, Banker expects to see other execution vendors follow suit.
Some of that is already happening. For instance, Logility (404-261-9777) has long offered demand and inventory planning as part of its suite. More recently, providers like Provia (616-285-3311) added planning functionalityto their optimization applications.
“If you want to know where WMS is going,” adds Ronald Riggin, chief technology officer for MARC Global (678-287-4040), “it’s going enterprise wide and it’s going to integrate more tightly with demand planning and management. That is going to become an integral part of our business.”
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