HighJump opens Innovation 2007

Modern's dispatch from HighJump's user conference, where supply chain solutions from WMS to TMS to direct-store delivery are on display

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 9/11/2007

Just what does it mean to be a warehouse management system (WMS) company today?

That’s the first question that came to mind in San Diego yesterday during the opening session of Innovation 2007, HighJump Software’s annual user conference.

I started thinking about this after Joel S. Levinson, HighJump’s new president, noted that 50% of HighJump’s revenue comes from core WMS. That, of course, means that 50% comes from applications other than WMS.

In fact, some of HighJump’s most notable achievements in the last year don’t involve WMS:

• The purchase of an on-demand transportation management system (TMS) provider (Pinnacle Distribution Concepts)
• The purchase of a provider of direct-to-store delivery solutions (Global Beverage Group)
• Continued development of its manufacturing execution solution (MES)

That’s a huge change from the industry I began writing about back in 1998. Then, industry leaders Manhattan Associates and EXE Technologies derived almost all of their revenues from core WMS. HighJump, now No. 7 on Modern’s Top Ten list of WMS providers with $90 million in 2006 revenue, wasn’t even a player. Today, on the other hand, Manhattan also derives at least half its revenue from applications like TMS and supply chain planning. EXE, meanwhile, is owned lock, stock and barrel by Infor, an enterprise resource planning provider.

So what does it mean to be a WMS company today? Based on the presentations at Innovation 2007, I came up with the following list:

Supply chain execution (SCE) is the name of the game: As end users reduce the number of software vendors they deal with, it’s hard to imagine a Tier I or Tier II provider that could survive just on WMS deals. Offering transportation management and other applications that complement and extend WMS functionality is a necessity.

Financial stability and scale count more than ever: Anyone who doubts the days of the mid-size WMS company are numbered, if not over, need only look at the announcement this week that Catalyst is being purchased by CDC Software. With that in mind, it’s no accident that HighJump touts the fact that it’s a 3M company along with its experience and technology.

You have to go global: While HighJump still does the bulk of its business in North America, the company will generate an estimated $15 million—or more than 15% of its business—in international revenues this year. That’s a figure HighJump expects to grow, aided by 3M’s global presence. “Doing business internationally is critical,” says Chad Collins, vice president of global strategy. “To compete today, we have to be able to go where our customers go, and they’re going global with their businesses.”

On-demand solutions are a factor: When HighJump strengthened its TMS offering, it did so with an on-demand solution. “We have customers who don’t want to go through a lengthy TMS implementation process,” Collins says. “With an on-demand TMS, they can be up and running in six to eight weeks.” Collins says the jury is still out as to whether HighJump will offer an on-demand WMS for the Tier I market, but he does expect to offer managed IT services to large users.

Vertical depth is a competitive advantage: Even with consolidation, the SCE space is crowded. Manhattan has always differentiated itself with its retail distribution know-how and now with supply chain planning. RedPrairie, meanwhile, is focusing on labor management inside the DC and the retail store. With the purchase of GBG, HighJump is staking out its territory in the food and beverage business. “That’s part of our broader strategy to focus on the food and beverage industry,” says Collins. “We want to be the preferred supplier in that industry, starting with those companies that do direct-to-store delivery.”