Suite Solutions

Supply chain software is still a best-of-breed world, but integrated suites of these solutions are shaping up as the way of the future.

By -- Modern Materials Handling, 12/1/2000

Once upon a time, the boundaries separating supply chain software providers were clearly drawn between management, planning, and order fulfillment applications. Each of the players knew their distinctive role in the supply chain.

Enterprise resource planning (ERP) suppliers provided management solutions for financials, human resources, and manufacturing.

Planning providers created solutions for short-, medium-, and long-term business strategies.

Order fulfillment was the bailiwick of execution systems such as warehouse and transportation management that provided the tools to pick, pack, and ship inventory.

Today, the geography is not so neatly defined. ERP, planning, and best-of-breed warehouse management systems (WMS) vendors have each broadened their footprints and invaded one another's domains, creating integrated software suites across supply chain practices that are hard to pigeon hole.

In fact, even the term "best-of-breed" is taking on a new meaning. It once implied a robust, highly-specialized solution. But today's WMS and transportation management systems (TMS) providers are rolling applications together. The result is a new type of best-of-breed solution that may combine warehouse, transportation, and order management solutions that interface with the Internet to provide real-time inventory and order-status information to customers.

"What we saw in the past were niche solutions, like distribution resource planning, forecasting, WMS, and TMS," says Erik Kertz, product marketing manager, at Manugistics, Rockville, Md. "But those applications didn't speak to one another, so users weren't getting the efficiencies they could get if they were working as one."

Fear and need are behind this latest evolutionary stage of these software packages.

Software developers fear being left behind by their competitors in a market characterized by mergers, acquisitions, and constant change.

"The trend began 3 or 4 years ago when the big ERP players tried to encroach on the supply chain planning and execution markets by offering planning and warehouse and transportation management systems," says Irving Chernofsky, director of research for the Gartner Group, Stamford, Conn. "Those markets responded by expanding the functionality of their products into packaged solutions. Once they started doing that, the land grab for a larger share of the market was on."

The need comes from supply chain system users, who are searching for new ways to optimize their supply chains. "In the last 18 months, a number of customers have told us they have to deal with a new level of complexities imposed on them by e-commerce," says Chris Heim, president of HighJump Software, Eden Prairie, Minn.

Supply chain suites provide solutions to deal with those complexities and come in a variety of configurations.

End-to-end supply chain suites from leading ERP vendors offer a complete enterprise solution from accounting and manufacturing applications to logistics execution applications. "We have a clear mission to link the warehouse at one end of the supply chain with the planning and ERP systems at the other end," explains Chrstoph Lessmoellmann, product manager for logistics execution systems at SAP, Wayne, Pa. "Our challenge is to provide a broad offering, and still be able to configure a system to meet the needs of an individual user."

While best-of-breed WMS systems are more robust on the order fulfillment side than their typical counterparts in ERP systems, the logistics solutions in end-to-end packages are well-suited to mid-tier companies with straight-forward needs. This is particularly the case if the companies have limited in-house information technology resources to maintain a system and want to work with one provider.

Planning, TMS, and WMS suppliers have focused their offerings around related applications that address specific areas of the supply chain, like collaboration and order fulfillment.

"Look at a suite as all of the processes you need to satisfy your customer's demand, including the tools to collaborate over the Internet with a customer to forecast demand," says Andrew White, vice president of product strategy for Logility, Inc., Atlanta, Ga.

Those processes also include capturing the order from a Web site, a call center, or an electronic data interchange (EDI) message, and then providing visibility across the supply chain as that order is picked, packed, and delivered. It also includes the ability to provide alerts and notifications about changes in an order.

"Supply chain suites are filling the space between the warehouse, the Web, and an ERP system," says David Landau, product manager at Manhattan Associates, Atlanta, Ga. "By integrating those applications together, you get a real-time transactional view of what's happening in a facility and in a supply chain."

Advantages of a suite

There are several advantages to implementing a suite solution.

For one, an integrated suite presents a single view to the user from screen to screen. Information is stored in a single database for information. That eliminates rekeying information from one system into another. "You're not operating in silos of functionality," says Sean Rollings, director of applications marketing, B2B, for Oracle, Redwood Shores, Calif. "All of your data is consistent across the system in real time."

A single database also results in a tighter integration of business processes. "In a typical best-of-breed solution, you have features in one program that you can't leverage in another," says Doug Erickson, vice president of sales for irista, a subsidiary of HK Systems, New Berlin, Wisc. "If I change something in the warehouse in an integrated suite, my order management and transportation management systems make that change automatically."

John Pulling, COO of Provia, Grand Rapids, Mich., agrees. "We design our WMS to take advantage of features in our transportation system," says Pulling. "The applications understand one another and can drive more savings. You can solve more complex problems by integrating them together."

Finally, maintenance is cheaper and upgrades are easier when there is only one system to upgrade and one supplier to work with.

Despite those advantages, providers recognize that even the best suites have their limitations. This is especially true as companies integrate across their supply chains with their trading partners who may have completely different systems.

For that reason, flexibility and interoperability is a hallmark of the suites now coming to market.

"A big differentiator between today's systems and the suites that were offered a few years ago is that they have to leverage existing technology and be open to accommodate a competitor's applications," says Henry Bruce, vice president of market strategy, Optum, White Plains, N.Y. "There can't be a single solution because the enterprise doesn't control what the trading partners do or don't do."

"Today, if you can't share information with your partners' systems, you're going to be at a severe disadvantage," says Andy Carlson, director of marketing for advanced planning at J.D. Edwards, Denver, Colo.

The change is coming

Analysts and experts agree that it's still a best-of-breed world. While vendors are developing suites, buyers are still looking for point solutions when they go shopping for a new system. "Most of our clients are looking for a standalone warehouse management system or a transportation management system when they call us," says Chernofsky from the Gartner Group.

In part, says Chernofsky, that's because buyers aren't aware that integrated suites are available until they start talking to vendors. But that's also because many end users still haven't integrated their own internal operations. Transportation departments and distribution centers, for instance, often operate independently of one another.

"We recently received requests for four different proposals from one potential customer," says Erickson of irista. "One department is looking for an order management system; another department needs a billing package; and other departments need a warehouse and transportation management system. There's a lot of silos of information out there."

That is expected to change as the complexities of e-commerce increase, and as supply chain vendors continue to merge. In the future, the best of the best-of-breed providers will be providing suite solutions.

"In 2 or 3 years, we believe all of the dominant players will be offering supply chain suites with one touch point to the ERP system," says Pulling of Provia.