Giving a Business Process Management Edge to Enterprise Resource Planning

Once the proof of concept that Exact e-Synergy could be a business process management (BPM) enabler had been made, Exact realized that the technology could also provide an edge to its enterprise resource planning (ERP) product lines. It hopes that Exact Globe 2000 and Macola ES will give user enterprises a greater reach that extends beyond a selected few power users traditionally situated within financial or manufacturing departments. The successful and quick integration of e-Synergy with the Macola back-office solution to create Macola ES was impressive, delivering more information to desktops across the enterprise, and better managing customer service.

For background information on Exact Software see Exact Software Continues with Its Share of Judicious Acquisitions. For a discussion of e-Synergy and BPM see A Single Software Solution That Enables Business Process Management.

Part four of the Exact Software Continues with Its Share of Judicious Acquisitions series. This series will resume January 16.

Traditional enterprise systems typically touch only about a quarter (at best) of an organization, while bundled tools offered by e-Synergy could virtually reach every employee, bringing all employees into the process and tying them more closely to the company's business goals. Though traditional ERP systems cater to the core processes of service- and manufacturing-oriented organizations, there has long been a gap of workplace processes within an organization that yearns for some serious streamlining. For example, IT supported process optimization used to organize internal meetings, including note taking and minute distribution, and managing ensuing tasks has not been tackled. Managing processes for the internal orders of indirect goods and staples or managing and reconciling staff vacation plans, etc. are also areas that can benefit from streamlining. These processes have been neglected because they are not recognized as revenue generators. They are, however, cost generating processes can accumulate to a substantial total cost each year, and are therefore worth addressing.
Macola ES may differentiate itself from most peer ERP products through its native "closed loop" workflow management capabilities, which prevent events and tasks from "falling through the cracks". In other words, while most traditional ERP solutions are task-driven, Macola ES is process-driven, and adds structure to processes that are typically handled inconsistently or manually. The software lets users define business rules, processes, and exceptions as an integral part of their distribution, manufacturing, and other operational activities.

To that end, the embedded Exact Event Manager engine is not a mere alert producing application. It lets users define both the event and the outcome (action). Prescribed actions that are not taken within defined guidelines are escalated, so crucial tasks are neither left undone nor unattended. For example, e-mails will no longer drift into "cyber heaven" where they will be left unattended.

Some worthwhile examples of how Macola ES defines business rules include alerting the buyer when goods do not arrive on time from the supplier, and escalating alerts to the vice president of purchasing if the proper corrective action is not taken by the buyer. Macola ES manages exceptions, for example, by generating a workflow task/step to sales personnel when a particular customer stops buying, or alerting a customer service representative, via a workflow task, when credit is rejected on an order, which can allow an alternative payment method such as cash on delivery (COD) or prepayment to be arranged. This real time exception reporting eliminates the need to generate costly and time-consuming batch paper reports that are created after the fact.

The ease of creating workflows and mapping core business processes may distinguish Macola ES from its peer small and medium business (SMB) ERP products. Sure, many traditional ERP solutions will tout some BPM capabilities, but after scratching the surface, one will typically find the workflow to be a mere document routing application, where the components of content management, process execution, and connectivity are lacking. While secure role-based portals, single sign-on, event management, document management, and BPM features are now becoming a "matter of course" for tier one ERP solutions, most smaller ERP providers have yet to introduce these into their software suites, particularly in an integrated and closed-loop manner.

By automating these tasks, e-Synergy represents a broad suite of products, which may still only be a figment of its direct competitors' imagination. Rather than being a typical enterprise application that "crunches" transactions using a relational database, e-Synergy goes a bit further to support longstanding processes within and outside an enterprise that involve synchronized collaboration and document management. Therefore, the suite may indicate an emergence of a new category of software that tackles enterprise relationship management, groupware/workplace collaboration management, and so on. Some leading analysts place this type of collection in the nascent smart enterprise suite (SES) category (see Mid-market Getting the Taste of Some Emerging Technologies).

This is because extensible markup language (XML) and other, related Internet standards have given a semi-structure to the traditionally unstructured data environment, making it more agreeable to IT support. Nowadays, document management and enterprise content management (ECM) systems can store and retrieve unstructured data (see Enterprise Content Management: It Is More Than Just Web Content Management). Other technologies that should be credited for the emergence of similar enterprise systems include portals, search engines, and categorization systems that allow users to access any given information. Integrated report generators allow users to view and report any data from structured and unstructured data source.

For a discussion of the cautions and caveats associated with the emerging BPM market, see Business Process Management: A Crash Course on What It Entails and Why to Use It.

A Single Software Solution That Enables Business Process Management

Exact has focused its development on making sure that any user company can significantly benefit from data stored in different places within the organization. Accordingly, it has developed a platform that keeps all departmental data in one central information store, accessible, in near real-time, over the Web, to make sure everyone within the organization works with the same information.

Part three of the Exact Software Continues with Its Share of Judicious Acquisitions series.

For instance, every customer-related phone call can be logged into e-Synergy, whereas faxes and Web site requests can be automatically merged into the system. As a result, every customer touch point should be available through e-Synergy allowing sales staff to know the latest service or credit issues. Likewise, people in customer service and finance can see the latest sales interactions. When the user enterprise has a full history of the interactions, it can better serve the customer, and employees will spend less frustrating time shouting across the office to find out who spoke to whom, and what was said. By focusing on improving and optimizing processes instead of just the departments, any user company should be better aligned and prepared to take on the challenges ahead.

Right now, the traditional enterprise resource planning (ERP) mid-market for standard business software remains sluggish and fragmented. Pricing pressures continue to increase on products and services, but a back-office ERP, per se, does not give the same competitive advantage it use to. However, due to globalization and Internet usage within businesses, users are increasingly seeking collaborative and Web-based solutions to find supply chain cost efficiencies and to better organize content.

An example of agility includes how prospects respond to an e-mail and enter personal information. The system should automatically update the contact database, and users can check for duplicates and add or merge the information. A workflow request can then be sent to the appropriate people for follow-up. When a customer places an order, the pricing used in the back-office system should also appear on the Web site or user screen. Finally, the system should offer a centralized view of all customers and their activities, including workflow, financial transactions, support issues, etc. from anywhere, and at any time. Customers, suppliers, and partners should also manage their accounts through secure portals.

Exact's quintessential solution consists of two fully integrated (working from the same central information store) products: Exact Globe and Exact e-Synergy. Both are built on Microsoft technology and open standards and should connect to any application users may have with relative ease. To get to the next level of competitiveness, users should build their ERP investments while reducing the steps it takes to execute key business processes. They should also manage by exception through lean manufacturing concepts. Exact touts e-Synergy as a means of managing by exception and tying together processes, documents, and people. It is a Web-based collaboration platform with portal views, workflow, document, customer relationship, and human resources management (HRM). e-Synergy also integrates office productivity tools such as Microsoft Excel and Outlook.

Exact has integrated e-Synergy with most of its local ERP packages. It has only been available in North American for a couple of years, yet, the product is used by over 400 customers in North America. Exact cites this as evidence of user interest in business process management (BPM) capabilities that layer over back-office ERP solutions. The product is also supportive of the US Sarbanes Oxley Act (SOX) owing to its workflow and document management capabilities, and it meets the electronic signature requirements under the US Food and Drug Administration (FDA) "Part 11" rules. The vendor expects standard business applications to drive efficiency by connecting to mobile devices, which is in demand by new generation of users that want better and faster access to more accurate and useful data.

For background information on Exact Software see Exact Software Continues with Its Share of Judicious Acquisitions.
Exact e-Synergy is primarily the collaboration solution, and as the name indicates, it is designed to provide synergy within the user organization. It gives all employees Web-access to instantaneous information from one central information source allowing them to plan, track, and initiate collaboration, and search and retrieve content, documents, and transactional data. By making Exact e-Synergy the platform of communication and collaboration, no data should (in principle) ever be lost at the organization, because information is stored for quick retrieval. Because of its ability to align employees, information, and processes across the enterprise, users of Exact e-Synergy should be able to view the health of the entire value chain, help employees manage time more effectively and execute business processes more efficiently. Key strengths of Exact e-Synergy are

* It integrates all company information by recording data at one time and in context. It links that data to all the relevant people, products, customers, workflow, and financial transactions.

* It encourages collaboration by providing structure and context and by accommodating Web sites and portals creation (see Portals: Necessary But Not Self-sufficient ).

* It supports mobile connectivity and allows on-line add-ons for portal digital assistant (PDA) devices.

* It increases transparency by managing all business processes through electronic workflow. The workflow integrates with Outlook, which is used for external communication (since calendars and contacts can be synchronized, e-mails can be sent to contacts from within the e-Synergy contact database). The system also integrates with Microsoft Office and Exchange.

* It gives access (search and retrieval) to all information and processes, including existing back-office ERP data and non-structured content for the entire organization, since the browser-based system has a "Google box"-type feature that makes it fairly easy to look up records by using multiple parameters.

* It reduces implementation and training costs by using a common Web browser to input and access data.

* It also leverages investments in ERP systems by enabling access to this information for the entire workforce.

The Web user interface (UI) is familiar to users and provides an easy means of navigation. Consequently, Exact e-Synergy is completely built on Microsoft Active Server Pages (ASP) 3.0 and runs on top of Microsoft Internet Information Server (IIS), both on Windows 2000 and Windows 2003 platforms. All data is stored in the Microsoft SQL Server 2000 database, whereas all supported client platforms are Windows versions that support Internet Explorer (IE) 5.01 or better (i.e., Windows 95, Windows 98, Windows ME, Windows NT 4.0, Windows 2000 and Windows XP). The product also provides support for other devices, including PDAs (such as HP Ipaq) and smart phones.

e-Synergy has a broad rather than deep functional scope that is difficult to pigeonhole into a single enterprise software category. It also represents an enterprise relationship management (ERM) solution that integrates the functionality of traditional front-office applications in a single solution, providing employees, customers, and partners with virtually an immediate view of activity across an entire organization. Front-office activities (such as customer resource management [CRM], e-commerce, and portals); back-office activities (including financials, HRM projects, distribution, and production); and their workflow, event, document, knowledge management modules share one database, Microsoft SQL Server. As a result, users have no integration issues and all of their information is kept current and can be viewed using only Internet Explorer.

Exact Software Continues with Its Share of Judicious Acquisitions

Amid its competitors' high-profile strategic moves (see Is "Sage" Wiser and Better Than "Best"?), Exact Software North America (www.exactamerica.com), an Andover, Massachusetts-based (US) provider of integrated accounting, payroll, customer relationship management (CRM), enterprise resource planning (ERP), business process management (BPM), etc. enterprise software solutions remains firm on a different course. Its solutions connect the people, processes, and knowledge essential to a user organization. Exact is a division of Delft, the Netherlands-based Exact Holding N.V. (Amsterdam: EXACT.AS, www.exactsoftware.com).

The corporation appears to have "backpedaled" from the bold growth projections made by its North American strategic group in 2004. At then time, it sought to double its revenue of approximately $60 million to $120 million (USD) by the end of 2006 through some aggressive acquisitions that would give it a larger market share. Instead, it appears to have intentionally shifted away from any blockbuster acquisitions to incrementally roll-out products that will give more added-value to its customers. In doing so, Exact has avoided the piling up acquired products.

The company's refined strategy has been to acquire more digestible companies with specific capabilities that support its Business Unified solution strategy, which seeks to round out integrated solutions that encompass executive control, accounting, manufacturing, distribution, on-line commerce, CRM, human resource management (HRM), document management (DM), Web portals, workflow, and more. This will empower employees, suppliers, and customers to collaborate through virtually real-time access to central Web-based corporate information and exchange. As a result, this should provide greater visibility across the organization, and maximize control, productivity, and efficiency for the entire value chain.

Exact's current plan consists of enhancing products by business type and industry segment. It seeks to continuously improve data and process integration and judiciously incorporate specific technologies that broaden its core product set by adding products that expand its market coverage and to gain human resource expertise. In other words, the vendor will continue to expand its product footprint and operations worldwide. The last few years have been a busy and transitional period for the vendor, with the deliberate acquisitions of certain resellers and partners, including the opening of new offices, and the launch of new product enhancements.
Exact Software is over twenty years old and is an international supplier of eighteen front-office/e-business and back-office/ERP solutions that somewhat differ (or are branded differently) within diverse regions of the world. The company's software is offered in over sixty countries, mostly through its own subsidiaries (with close to 2,400 employees worldwide). It also has nearly 2,000 business partners that help the vendor handle over 180,000 customers in 126 countries. For the fiscal year ending December 2004, Exact generated revenues of 212 million euros which was an increase of about three percent over fiscal 2003, while net income was 33 million euros in fiscal 2004, which was up 3.1 percent from 32 million euros in fiscal 2003.

Though it conducts business more tacitly than its bigger archrivals, Sage Group and Microsoft Business Division, Exact is nonetheless a textbook example of a vendor that is maintaining a steadfast course of product, revenue, and geographic expansion—and it is doing so while achieving enviable profit margins, including a twenty year stretch of profitability. Thus, Exact is a stable and predictable, cash-flow generating business.

Though its market approach, conservative business management, and attention to profitability have not changed, Exact Software is quite a different company now compared to what it was several years ago, owing to its many acquisitions and new product developments. The vendor can be placed among the leaders within its target market, trailing Sage and Microsoft, and fighting with the likes of Epicor Software (see Epicor's Mid-Market Pitch Becomes Higher for (One) Scala) for the top three position in the small and medium business (SMB) market. In some markets, Exact also competes fiercely with the likes of SYSPRO.

Three Strategic Groups

Exact Software's network has been divided into three geographically strategic groups: the Netherlands, North America, and International. Each strategic group has its own leader and revenue and profit and loss targets, and each addresses the specific needs of its market in a particular localized way. However, all share the corporate-level vision that a single, integrated solution should provide the best way to improve customer efficiency and productivity. To further enhance customer satisfaction and service, the entire Exact organization is linked by a single infrastructure, which provides access to the same customer database and information worldwide.

In the last few years, Exact has, even if only moderately, built on its traditional customer base in each of its strategic areas and strengthened its position in each one.

Dutch Strategic Group

With over 74,000 customers and a total revenue of 95 million euro in 2004 (compared to 93 million euro in 2003) Exact remains both the market share and mindshare software powerhouse in the Netherlands. The Dutch strategic group expands Exact's base of SMBs, and strengthens its position within the enterprise-level market. In the Netherlands, this focus has traditionally meant providing the SMB market with innovative back-office solutions, but this is now changing towards more integrated back- and front-office solutions.

While continuing to serve its traditional customer base (the SMB market) Exact is expanding its focus to the higher-end of the market, as well as to more modest midsize operations. The increased functionality of its products, such as the manufacturing and project management functionality for Exact Globe 2003, launched in mid 2004, has reportedly made Exact's solutions even more appealing to larger organizations. The Exact Globe 2003 Enterprise product addresses this market by segmenting into more solutions areas, serving an array of different businesses, including those involved in wholesale, manufacturing, retail, education, professional services automation (PSA), rental, and accountancy. Each of these areas is served with an industry template of Exact e-Synergy.

In terms of small businesses, the target in the Netherlands is the same as the rest of the world: to integrate the customer's complete organization using the combination of Exact Globe and Exact e-Synergy. To realize this long-term goal and to better meet the immediate needs of specific customer segments, Exact has three versions of Exact Globe: Exact Globe Enterprise, Exact Globe 2003, and Exact Compact 2003.

Additionally, the vendor supports its important reseller network in many ways, and the entire network has been trained sufficiently so that every reseller can now sell Exact e-Synergy. In 2004, Exact Netherlands aligned its organization to better serve market segments that seek specific industry solutions. Together with its traditionally loyal partner channel, this has proven to be successful in delivering solutions and implementations for the higher end of the SMB market in the Netherlands.

The local leading brands in the Netherlands are Exact Globe 2003 (financial software for SMBs), Exact e-Synergy, Exact Compact 2003 (financial software for small businesses), Exact Globe 2003 Enterprise (ERP software for larger corporations), Exact Financials (financial, project management and HRM software for medium and large organizations), and Grote Beer for Windows (financial software for small businesses).

Global Software Aspirations

To address the multinational needs of enterprises and to create "one face for each customer", Exact Software, a division of Delft, the Netherlands-based Exact Holding N.V. (Amsterdam: EXACT.AS, www.exactsoftware.com), has taken steps to offer Exact Globe, the latest generation of back-office enterprise resource planning (ERP) software to North American customers. This effort, which began in 2005, should enable customers to benefit from an extensive range of ERP solutions.

Part Two of the Exact Software Continues with Its Share of Judicious Acquisitions series.

Early adopters of Exact Globe have mainly been divisions of companies that have long been using the product elsewhere. However, the vendor is planning to use early 2006 to prominently roll out its flagship product Exact Globe Enterprise across North America. Exact Globe Enterprise is a multinational ERP software suite that offers manufacturers multilingual, multicurrency capabilities that local offerings of Exact lack. Throughout 2005, Globe has been in controlled release in North America and there have been about fifteen test sites for the product. The goal is to reach twenty sites in 2006. General availability (GA) of the product is also expected in early 2006.

For background information on Exact see Exact Software Continues with Its Share of Judicious Acquisitions.
This initiative signals the start of a long-term migration to a single ERP platform, but by no means will users of systems other than local Exact ERP be forced to undergo any type of conversion soon. Still, for some time now, Exact has been focusing its research and development (R&D) efforts on a "single product" strategy, leveraging its so-called One-X (meaning one Exact) architecture framework. One-X means there is a single database (i.e., Microsoft SQL Server) and transaction table between the respective back-office products of Exact Globe or Macola ES, each with the e-Synergy front-office or business process management (BPM) product.

Initially, both product combinations were to provide customers with the full integration of back- and front-office solutions, albeit with different focuses, strengths, and markets. For example, the Exact Globe and e-Synergy combination targets non-manufacturing markets outside North America; Macola ES and e-Synergy is geared towards manufacturers. The idea is to eventually converge these three product lines into a unified global product some time in the distant future.

In the meantime, new versions of all the acquired product lines have been developed on the same architecture, which should ensure long-term economies of scale. It should also ensure the product integration of acquired brands, and product continuity for customers. To that end, Exact is using a common object repository to simplify development across its products, so that Exact Globe and Macola ES could "borrow" modules from each other accordingly, such as the warehousing, electronic data interchange (EDI) or shop floor control components from Macola ES. For more information, see Exact Software—Working Diligently Towards the "One Exact" Synergy.

However, because Exact Globe has superior multinational and process management (including grant-based) functionality, it will likely be given the "right of way" to become Exact's strategic product for its global base. It is an especially promising product since it is the first product with multinational capabilities to be offered to the North American market. As such, it should ultimately help attract new clients. In particular, while all four of the North American packages have the ability to interface with e-Synergy, none have particularly strong multilingual and multicurrency capabilities. In Globe, this functionality was built from the ground up, which is critical in addressing the needs of North America-based multinational manufacturers.
Exact Globe has extensive functionality, including financials, distribution, light manufacturing, manufacturing resource planning (MRP), a product configurator, and project management. Exact has typically targeted small and medium businesses ranging with $10 million to $50 million (USD) in revenue, as well as manufacturing and distribution companies and divisions of multinationals. This is a great potential market because parent companies often use a tier one product from SAP or Oracle (including PeopleSoft), but these systems often have unnecessary functionality for the various divisions.

Globe, which has solid, but not excessive functionality, was built to integrate with other systems using extended markup language (XML), which has become the standard for integration. The product is also appropriately priced. The configuration includes e-Synergy, general ledger (GL), accounts receivable (AR), accounts payable (AP), distribution, order processing, inventory control, and purchasing and costs about $20,000 (USD) plus $1,200 (USD) per named user (any employee who would access the system). Ongoing annual service and support costs typically average an additional $20,000 (USD). Users can also buy e-Synergy as a standalone system for $10,000 (USD), plus $1,000 (USD) per named user.

Thus, as part of the multinational push, Exact North America has also created what it internally calls the International Parenting Group, a sales team dedicated to the needs of companies operating in multiple countries, since these enterprises need to be sold to, serviced, and supported in a different way. Though these companies want to run their North American headquarters office from the same database, they still operate in different countries and have different payroll, tax law, and distribution problems. Currently, Exact has roughly 30 salespeople in the International Parenting group, which services about 1,000 multinational clients. Value added resellers (VAR) can also benefit from these services. This group will also take care of all the logistics, communications, proposal writing, and implementation. At the same time, it will protect the partner's profit margin and all of this will be done in a process that is seamless to the prospect or customer.

Ironically North American prospects might consider Globe to be a brand new product; however, Exact built it twenty years ago for companies in the Netherlands that needed an accounting package that could handle multiple currencies. It focuses on automating traditional back-office ERP processes containing structured information (transactions), such as financial, human resources (HR), sales, marketing, logistics, and manufacturing processes. Furthermore, it is fully localized, so that all legislative, fiscal, and judicial obligations are met.

Typically, the product is used by a select number of users who are responsible for transactional actions, such as moving goods, buying, selling, budgets, etc. While the number of users may be small, they have to be well-trained in the application and require a powerful environment with all the functionality that Microsoft Windows can offer in terms of ease of use. Therefore, Exact Globe is developed in Microsoft Visual Basic 6.0, with a basic technical framework in Microsoft Visual C++ 6.0 to ensure programming efficiency and consistency. All data is stored in the Microsoft SQL Server 2000 database, whereas the supported client platforms are Microsoft Windows 2000 and Windows XP. Key functional strengths of Exact Globe include

* support for fiscal, legal, and commercial regimes of more than twenty legislations;

* provides financial accounting, cash flow management, asset and contract management, project management and service management, all seamlessly integrated into a financial management system that is not traditionally general ledger centric;

* provides industry templates for manufacturing and distribution businesses;

* streamlines international payroll and improves document management;

* uses one central database for recording transactions, documents, and activities;

* uses classification of documents, making access relatively simple and easy; and

* reduces steps (data entries) needed to process a closed-loop transaction from the quote via order capture and fulfillment and shipping to payment.

Hence, Exact Globe Enterprise targets multinational companies running within global markets by offering multiple international legislation compliance, and strong project accounting and product management (in terms of R&D and intellectual property-intensive environments) capabilities, albeit mainly light manufacturing/assembly and distribution ones.

Candidates that are likely to use the solution are document-centric companies, including businesses in consulting, engineering, biotechnology research, intellectual property management, and software development companies. Also, these are project-based organizations, where a high percentage of employees require access to the system, and where trading partners require access to projects in back-office ERP systems. Also, many other Exact products worldwide have "borrowed" the Exact Globe architecture and functionality, such as Exact Macola ES in North America, Grote Beer for Windows and Exact Compact in the Netherlands, Exact Pro and Exact Pro Lohn XL/XXL in Germany, Cubic Pro in Belgium, and Exact Globe 2004 Enterprise in the Netherlands and in the International Group.

SCP and SCE Need to Collaborate for Better Fulfillment Part One: How SCP and SCE are Addressing WMS

There are two important business problems associated with today's manufacturing planning, materials planning, and supply chain environments:

1. Supply chain planning (SCP) applications need to address the lack of accurate logistics costs and service information that would enable more optimized decisions across the entire supply chain. SCP typically generates weekly or daily plans (in a better case scenario), but without adequately addressing the issues that arise almost every instant in dynamic logistics environments. Thus, plans are often invalid as soon as they have been made, while a mere re-planning does not answer the question of what went wrong in the first place (i.e., there is no facility to learn from prior plans' inadequacies).

2. Supply chain execution (SCE) applications need to further address the lack of real time inventory visibility and event management feedback information needed for SCP to respond to frequent supply chain changes when building and executing manufacturing and materials plans.

Much has been said lately about the SCE market thriving and its SCP counterpart being one of the worst performing enterprise applications segments during the still ongoing economic downturn. While core back-office ERP and possibly even more cumbersome SCP systems might have traditionally excelled at planning, conceptual optimization, and financial integration functions, they have not however, addressed warehousing, yard management, distribution network planning, or transportation/logistics management. Yet, increasingly, every user company's success is contingent upon its ability to make almost immediate finished product or service delivery to customers. Additionally, data inaccuracy and inconsistency problems, complex planning algorithms/models requiring sophisticated user skills, lack of easy integration to other applications, and plan timeliness have all contributed to traditional SCP products' steep fall from their early grace.

The demand for near real time supply chain collaboration will, in turn, place an increasing emphasis on any company's ability to immediately commit itself to promising orders' delivery dates on a global basis and to consistently meet those commitments ever after. This available-to-promise (ATP)/capable-to-promise (CTP) aptitude will be made more complex as companies rely on an increasing number of business partners and suppliers to procure raw materials, assemble, and deliver finished goods. SCE is therefore gaining increasing awareness among companies that realize that planning can do only so much without the ability to make the right and timely decisions and execute on the shop floor, in the warehouses, or within the entire distribution chain.

However, it would be too na�ve to dismiss the need for proper planning, because regardless of how responsive an SCE system may be, waiting for chaos to happen and only then trying to act would be equally disastrous, as it has been with compiling nearly ideal plans (through cumbersome algorithms) and never doing anything about executing them or obtaining feedback about their outcomes. Companies need real time information from execution systems to develop and adjust optimal plans, while the execution side should benefit from more realistic plans for the sake of readiness, rather than to merely react after the fact in a firefighting fashion. We believe that planning and execution will become more or less inseparable in a trend that will see SCP, SCE, supply chain event management (SCEM), manufacturing execution system (MES), and analytics/enterprise performance management (EPM) (i.e., decision support tools and multidimensional analysis on information aggregated from all levels of the commerce chain, and an extensive sets of predefined performance indicators, as well as strategic planning/forecasting and balanced scorecard functions) coming together into an adaptive system.

Leading SCE vendors will thus continue to mmove beyond their current SCE functionality to more collaborative and optimized holistic supply chain management (SCM) solutions, which will include more consistent functionality at all levels of the organization, including collaborative planning, forecasting, replenishment (CPFR), order management/customer relationship management (CRM), warehouse/yard/transportation management, integrated business intelligence (BI) and performance measurement, as well as industry-specific functions. Vendors lacking the technical expertise for the development of integration and business process management (BPM) platforms, and analytical planning engines will find it necessary to preferably OEM-embed or just loosely partner for this functionality.

SCP and SCE Need to Collaborate for Better Fulfillment

Vendors addressing warehouse management systems (WMS) have lately shown the ability to provide their clients with a strong standard product set that requires limited modifications, making it easier and more cost effective to upgrade and to realize the strong value proposition and new features in the upgrade. The fact that WMS software (particularly the legacy instances) tends to be among the most customized of enterprise applications, often makes it more affordable for companies to forego the upgrade process and just install newer more out-of-the-box functional WMS applications.

The following vendors have had their WMS products covered in recent TEC articles:

* RedPrairie For a detailed analysis of the RedPrairie products, see RedPrairie - New Name For A Brave New Value Proposition Paradigm

* Highjump For a detailed analysis of the Highjump products see Highjump Grows in a Period of Low Growth Through Adaptable, Broad Function Products

* Provia For a detailed analysis of the Provia products see Provia Proves Its Way To Success

RedPrairie, together with its bullish nemeses, Manhattan Associates (see Logistics.com Becomes The Newest Of Manhattan Associates), Provia, G-Log, HK Systems, HighJump, and Yantra (see Yantra � Leader in Distributed Order Management, But Wait There's More), has been thriving in part because it provides many "part and parcel" components of supply chain execution (SCE), which has apparently been growing faster than its supply chain planning (SCP) counterpart, given that back-to-basics logic driven projects nowadays have been aiming at low-hanging fruits that provide hard benefits within quick deployments.

While the above vendors have many common threads within their success stories, they all do have some specific differentiating value propositions. Otherwise, how else would one explain the ongoing plight of some publicly held SCE vendors like EXE Technologies (see SSA GT To EXE-cute (Yet) Another Acquisition), Industry-Matematik International (IMI), and Catalyst International (see SAPped Catalyst Warns in Wake of CEO Departure) if just a mere SCE designation would be a guarantee of success without keeping products abreast of the latest trends or without good execution?

Landed Cost Calculations Add Fuel to the Fire

While many companies have either made (or are in the process of making) the transition from regional, build-and-sell business models to a global sell-anywhere, build-anywhere, and buy-anywhere model, the current, mainly manual systems still typically require information to flow via spreadsheets, phones, faxes, snail mail, and e-mails within the retailer's different groups. When it is time to place an order, the data is usually no longer current and accurate. The information then has to be revised during the ordering phase, where the vendor might respond with actions based on incorrect assumptions, and one has to go through the vicious cycle again.

Determining the true costs of these activities can also become more complex since, in addition to a nominal purchase price, one has to add freight, taxes, duties, intermediaries' fees, cost of inventory, cost of quality issues (if any), and buyers' time. Landed costs also vary tremendously depending on how the merchandise is shipped, since many supply chains today originate in countries that can provide low-cost manufacturing capabilities, often thousands of miles away from the end market.
In a regional model, companies make parts-sourcing decisions based primarily on per-piece cost and traditional supplier scorecards. In a global model, though, with lengthening supply chains and increasing risk, companies must choose suppliers based on additional factors, such as inbound lead times and associated variability, protection of supply, logistics costs and risk, and inventory expense. Only a thorough analysis of potential scenarios reveals the total landed cost, and poor sourcing decisions could turn out to be counterproductive and may result in increased costs, decreased supply chain flexibility, and customer dissatisfaction.

In other words, an apparent bargain price on paper may not be quite as attractive in reality, since there may be hidden costs to consider in addition to the purchase price of components or per-hour wage rates. Landed cost refers to the total price that the importing company has paid for a resource once it "lands" at its appointed location, such as the incoming dock at the production facility. Imagine the possible, startling differences that might be brought to light with a thorough comparison of the prices of raw materials available in several regional markets around the world.

Again, while the landed cost of domestic items includes the component price plus domestic freight, the landed cost of the same or similar components in a foreign market may include all of the following: purchase price; import duty; international freight; special packaging, travel, and other communications costs involved in acquiring the component; fees and commissions for intermediaries (typically not necessary in domestic purchases); currency exchange and interest costs; costs of hiring or training personnel to deal with export-import complexities, and so on.

Further, determining the relative costs of manufacture and assembly in different markets can be as complex as comparing landed costs for goods. To that end, some vendors provide tools to help companies uncover the true costs of global sourcing to better manage this new business environment. The most recently unveiled i2 Total Landed Cost Sourcing software tool by i2 Technologies is designed to help companies analyze and determine sources of supply for parts, components, and finished products based on all conceivable factors that might contribute to cost and risk. Leveraging this solution with the closed-loop capability to capture all relevant cost elements, represent them in a model, compute and analyze multiple what-if scenarios, and make the best decision, businesses can drive the process with a complete picture of the factors impacting the total cost of a product. Total Landed Cost Sourcing delivers the following capabilities:

* analysis and decision making;
* definitions of cost targets and sourcing constraints;
* automated data management and cleansing of cost, transportation, lead time, inventory, service variability, and network data;
* the ability to make informed sourcing decisions based on supply chain modeling and corporate objectives;
* solid reporting and analytics capabilities for continuous learning and ongoing compliance management;
* supply chain network optimization to calculate variable supply chain costs through strategic network design and inventory optimization;
* the ability to issue RFQs and collect supplier-quoted costs; and
* estimation of total landed costs for all sourcing scenarios while considering optimal transportation routes.

Like its i2 CTO counterpart mentioned previously in The Promise (and Complexities) of Private Labels, i2 Total Landed Cost Sourcing will be available in the i2 Business Content Library, a repository of process and technology solutions based on i2's extensive supply chain domain expertise. The idea here is for organizations to use these solutions without modification and to help accelerate the customization and deployment of composite solutions when necessary.

The Anatomy of Retail Sourcing Processes

Another complication is the unpredictability of local markets, since what might be "hot" or “cool” in one area may not sell at all in another market. If the retail outlet guesses wrongly on a fashion piece, or if it takes too long to get items into the stores (resulting in the merchandise being considered passé by the consumer), the stock must be moved to the deeply discounted (marked down) sales racks. At best, the retail chain is wasting expensive floor space on items with little or no profit margin; at worst, the items will have to be discarded or transported to other resellers. Profit margins are tight on some lines, since price points (the price at which the young shopper with limited finances shrugs and goes somewhere cheaper to shop) dictate aggressive pricing. In spite of these challenges, competition is growing for this customer segment, and it is becoming more difficult to distinguish the value that the retailer is delivering and to remain profitable.

As depicted in the typical sequence of processes listed above, retail personnel spend up to 80 percent of their time on administrative tasks rather than on their primary job. One could only imagine the mayhem that would result should there be virtually no integration among the above processes and its participants, or even between their core business systems, given that each task has its own Microsoft Excel, Microsoft Word, or e-mail trail, with data in isolated and disparate systems. If the above processes are still heavily segregated, with no visibility and very little control, the overall process becomes painfully slow and inaccurate, with extended processing times as a result.

Eqos cites that one major retailer calculated that it took 48,000 spreadsheets to launch just one new product line, which means lots of dreaded manual processing, re-keying, data conflicts, extended processing times, and so on. Further, nowadays, a vast majority of retailers manage inbound logistics processes across a variety of in-house enterprise resource planning (ERP) and supply chain management (SCM) systems, supplier data bases, and outsourced logistics providers' systems. They do this in an environment where it is difficult, if not impossible, to have a single view (version of the truth) of the entire sourcing and delivery process from a single vantage point.

In a more sophisticated scenario, though, all the members of the supply chain communicate through a coherent Web-based system. This means that when, for example, a vendor makes a change in the status of a product, everyone in the supply chain instantly sees the change. The key in global sourcing today is to minimize the overall cycle as well as disruptions, and the most effective way to do this is to have live, accurate, and immediate information available to all parties of the supply chain. New Internet-native sourcing software applications give users visibility of current product or order status at any point in time, anywhere in the world. These applications eliminate almost all duplication of information, thereby allowing all trading parties to collaborate on more rewarding issues rather than having to constantly put out fires.

Prior to implementing a contemporary Web-based automated solution, contacting multiple vendors at once for pricing was a tedious manual process for the sourcing group. In contrast, by using a Web-enabled infrastructure, user enterprises should be able to better integrate globally with their supply bases and broaden the scope of vendors they can locate
Lately, such technology has streamlined many retail firms' ability to obtain estimated pricing from several vendors simultaneously. Also, when the design team comes up with a new fashion concept and wants a sample of that concept, such a system allows information on the design to flow into the sourcing organization. This allows the sourcing team to acquire estimated costs as well as time-and-action (that is, normalized or synchronized calendars within the entire production cycle) information. The sourcing team can then better determine where it may want to place the production, depending on volume, possibly integrating with the merchant organization to give it a feel for how much product the firm will be sourcing of a given style so that it can review capacity constraints.

The next step is to use the software tools to break style data down by more variables in preparation for placing the purchase or production order. For instance, the software could provide suppliers with answers to questions such as the following: How much does the retailer want to order by color and by size? What is the final pricing? What is the final time-and-action calendar?

More and more, the standard order confirmation and customary ASN procurement practices cannot provide enough of a guarantee that everything is going smoothly with any order placed. This is particularly true of the internationally sourced, custom-made purchases that are common in the consumer goods manufacturing and distribution industries. Here, the difficulties of communicating across time zones as well as long lead times make for lengthy recuperation periods (if recuperation is even possible) when problems occur. That is why buyers benefit from visibility and supply chain event management (SCEM) systems that inform and alert them to the following production scenarios: orders were (not) started on time; orders were (not) placed on the boat on schedule; the design team has changed (yet again) specs on the color or fabric for a particular planned merchandise; and the order was (not) properly documented to clear customs without a glitch.

How to Reconcile These Conflicting Objectives

The benefits of private label merchandise can be so large that they become crucial to retailers' strategies—to the extent that ignoring global sourcing is no longer an option for most. The issues discussed above could be particularly critical and even more complex for companies that offer their sourcing services to other independent retailers. They must also comply with those retailers' unique billing and documentation requirements as well as internal invoicing and vendor payment for goods bought on their own behalf.
Again, an astute sourcing product lifecycle management (PLM) and finance management package should be able to enumerate all the elements (line items) of an original order and, in turn, trigger the generation of other documents, such as the letter of credit (L/C), the packing list, the advance shipping notice (ASN), the bill of lading (B/L), the commercial invoice, and the service invoice. These documents—and the detailed information regarding carriers, shippers, country of origin, export country, import country, and final destination—are essential for meeting the ever more stringent global trading security standards and for clearing customs without delay. This synchronization of all participants within the supply chain would be a major performance enhancement to speed up the product-to-market time. For more information, see Globalization Has a Profound Impact on the Supply Chain and Supporting Information Technology.

A number of major, and often conflicting, objectives discussed thus far have been driving retailers to turn to IT solutions to streamline their sourcing and logistics processes. One key objective is the pursuit of lower prices, which often involves extended supply chains to remote, lower cost regions. On the other hand is the contradictory quest to shorten cycle times, which is essential, but so is having quality control that ensures companies receive their merchandise on time and according to exact specifications.

Until fairly recently, the Internet has been neither reliable nor ubiquitous enough to support such broad supply networks and resolution of these networks' issues. Lately though, the Internet has reached a much higher level of security, bandwidth, and connectivity, which coincides with emerging applications designed to run over the Internet and offer near real-time data and events for managing and analyzing the variables of global sourcing. For instance, Web-based supply chain visibility tools have reportedly helped many companies improve their production lead times, better manage their inventory movements, and track the production and delivery of products in near real time. Moreover, Web-based sourcing tools can help these organizations identify suppliers, negotiate contracts, ship manifests, streamline sourcing through event management, collaborate and plan with their trading partners, and ultimately increase their on-time deliveries.

Some importers might have both “big ticket,” expensive items along with high volumes of low-cost accessories sourced directly from Asia. Such a situation requires an integrated approach within the supply chain and more accurate visibility. Again, collaboration among suppliers, logistics providers, buyers, and product managers is critical throughout the entire product life cycle. An astute sourcing software suite should enable product managers and buyers to quickly develop comprehensive requests for quotes (RFQs) for their global sourcing efforts.

Such a solution should also be able to normalize disparate currencies, languages, and lead times, and automatically calculate the estimated landed costs for a clear understanding and comparison of all offers submitted by competing suppliers. For these suppliers, which are located around the globe, the suite should seamlessly unite and coordinate such details as product specifications, RFQs, quality control, packing lists, and all the invoices and customs paperwork, thus eliminating redundant data entry errors and speeding up production. Such a solution should also enable buyers and trading partners to more quickly collaborate on accommodating change orders in an effort to respond to any fluctuations in market conditions.
With suppliers on the other side of the globe, it can be hard to check to see how things are going, and one typically finds out about a problem after the fact—more specifically, when the goods arrive. Therefore, taking the above analysis of strategic sourcing, although some vendor relationships can be smooth and run on “automatic pilot” (meaning companies might occasionally monitor purveyors of office supplies for best prices and basic service requirements), a much deeper and more involved relationship is essential for strategic vendors—that is, retail goods suppliers that must deliver to specifications, on time, and at the right cost. These vendors can be evaluated on many key performance indicators (KPIs) in a holistic scorecard-based fashion. Some of these KPIs can be on-time delivery, quality, innovation (organization health and technology), responsiveness and customer service, security, social compliance, etc.

Zooming into the Clothing Retailer Conundrum

The apparel industry operates in an environment of rapidly changing consumer trends and competitive margins. The consequences of a poor product selection or late delivery can result in a lackluster selling season—it can even be truly disastrous for a retailer. Competition for product differentiation and increased profit margins mean that delays or missed communication can interrupt production, delay shipments, increase cost, and impact sales, thereby posing serious threats to the viability of the company. The design process is iterative and collaborative, with buyers and vendors working together to get the right product at the right price point, while styles, details, sizing, and palettes create the brand look over the years, as opposed to shared components, ingredients, and subassemblies in the discrete and process manufacturing markets.

Facilitating collaboration between designers, merchants, sourcing professionals, and the factories is the first step for any PLM application. Moving away from phone calls, faxes, and e-mail strings to a centralized collaboration environment can ensure that all parties are in tune with the latest requirements. The dynamics of consumer demand, consumer fickleness, and fashion trends are what make fashion retail so complex. With thousands of stock-keeping units (SKUs) containing color, size, and attribute options undergoing multiple iterations during design and development, as well as numerous quality checks, the apparel retail industry requires a specialized PLM solution. A well-devised planning refinement process should secure the right product margin.

In order to take advantage of the price differentials associated with global outsourcing, retailers need to be extra vigilant about design changes, where the tracking of components, test results, and packaging requirements, as well as quality issues, require a PLM system to promptly alert retailers to key milestone updates and results. Also, the retail environment for PLM requires quality testing to be done throughout the product life cycle, but mostly before production even starts. The system should monitor the product progress and assure quality requirements throughout the entire process. In the retail industry, component materials, works in progress (WIPs), and finished goods can undergo a battery of sampling, rigorous testing, and rework up to the last moment before in-line production starts.

To keep deliveries on schedule, a comprehensive process and alerting system is needed to capture and communicate specification changes, test results, and potential production impacts, as well as to provide the visibility to manage materials and resources effectively. The above information and quality resolution, calendaring and status alerts, and the component library (or a growing database of approved designs and configurations or components) should all keep product development and production on track and moving toward the store floor. For more information, please see Process Manufacturing: Industry Specific Requirements and Intentia: Stepping Out With Fashion and Style.
Typically, retailers try to take advantage of traditional product design management (PDM) solutions, such as Gerber's WebPDM or Freeborder's Product Manager, to organize their production specifications. But these systems were primarily designed to integrate with cutting and piecing machinery, not necessarily to track quality testing, manage sourcing activities, unite the buying process, or maintain the official transaction details. Thus, it has been difficult, if not impossible, for such systems to produce “one version of the truth” for financial reporting and compliance with the US Sarbanes-Oxley Act (SOX) and Customs-Trade Partnership Against Terrorism (C-TPAT).

Nor are PLM packages for discrete and process manufacturers the right fit for retail PLM, as they are not built for the diversity of attributes, rigors of quality testing, or the inherent relationship with global sourcing, order management, and supply chain functions. Some astute apparel PLM systems enable retailers to prequalify suppliers for a particular order based on their previous work and certifications, and they grade these suppliers on the quality of new orders received (see The Next Phase of Supplier Performance Management in the Retail Industry).

While the TradeStone PLM for Retail product was described in The Future for an E-sourcing Solutions Builder, the counterpart Eqos Product Management Suite is comprised of the following four modules that manage supplier-related processes from a product-centric perspective:

1. Eqos New Product Introduction—manages the product from the specification stage through to delivery to the retailer, automating the NPDI processes and data gathering across companies to reduce time-to-market and increase launch success rates.

2. Eqos Product Information Management (PIM)—facilitates the synchronization of information both internally and externally via a centralized repository of product data and graphics information (see The Role of PIM and PLM in the Product Information Supply Chain: Where is Your Link?). This repository is the foundation of information on quality, and provides the reference point for store-specific ranges, campaigns, promotional activities, and product performance management.

3. Eqos Promotional Event Management—automates and manages the initial planning, pre-evaluation, execution, and post-event analysis of promotions, including seasonal events, product introductions, and regular consumer offers.

4. Eqos Product Performance Management—publishes product performance data to suppliers and to internal parties. Data can include sales, stock availability, forecasts, receipts, dispatches, and store range details, and it is reported at store, region, depot, or aggregate corporate levels. This module incorporates alerts, exception, and lost opportunity reporting against any metric, including expected sales, availability, and ranging parameters.

A single view of the truth should eliminate the redundancy introduced by multiple spreadsheets in need of updates, the hunt for e-mail strings, and constant re-keying of information in multiple systems. Companies should be able to harness the Internet to ease sourcing and procurement processes and to tackle the most serious problem of sourcing—the headache caused by separate systems for domestic and international buying, and the inability of smaller companies to leverage global buying platforms.

Provia approaches RFID in a double way Part four: Total availability

Recently, at the end of May, Provia announced with the distribution/ expo computer 2004 Chicago, Illinois (US) that its event of ViaView/management alerts and produced of decision-making aid plays a main role in the visibility of offer to the data of chain of provisioning for companies providing the products RFID-labelled to Wal-Mart and to other retailers.

Moreover, at the end of March, Provia announced that it was aligned with its head office of over fifteen years, systems of Viastore, a leading vendor of automated storage and the systems of recovery (AS/RS), and the control systems of material handling, with more than 3.000 cranes installed in the whole world.

However, RFID was not the only hearth in Provia 'association recent of S and the improvements of products tests. Provia could be also held independently of its pars in the applications of company that industry by claiming that behind each one of its installations is a satisfactory customer. The canvassers of company who its capital of the number one is that they keep his engagements and deliver them per hour and in the budget, and thus, 98 percent of its customers replace their contracts of support of 24/7 with the supplier each year. By facilitating Provia on before execution be several associates of integration, including the general houses of consultation like old PricewaterhouseCoopers (now IBM Global Services), consulting Deloitte, and services companies of integration of more reduced system like old Digiterra (now ciber), logistic street Onge, and Q4.

Equipped with a direct personnel of sale in North America supported by the regional teams, Provia also brings back the strong presence and sales in South America. It was in particular sale successful on South America the market of the logistics of third of S ('3PL), by its association with the integrator of system Tecsys Latin America (TLA), with offices in Chile, in Colombia, and in Venezuela. At the beginning of 2004, still of announced Provia that its ViaWare solutions and FourSite of SCE are now available as solutions of software of logistics to carry out the companies of the Caribbean by a report/ratio increased with Provia 'Latin-American distributor of S, TLA. The initiative in the area of the Caribbean implied the collaboration and the support of Provia, TLA, and also of Roger Marshall, a service provider of chain of provisioning with over nineteen years of experience of chain of provisioning in the area of the Caribbean.

During some time, however, we also expected Provia 'global agreement of retailer of S with one of the larger 3PL suppliers, as for increase its presence in Europe and country of the Pacifique coast. For this purpose, late in 2003, Provia and Menlo in the whole world, one of the world 'of the largest companies of chain of provisioning of S, announced that the two companies signed an global agreement of retailer. With the Menlo agreement, a long-term customer of Provia, is now a retailer of ViaWare WMS on a total basis, which can now sell, apply, and support the solution of Provia as an element of the company of the 'total service of S offering, since its total personnel of sale will be able to now offer Provia 's ViaWare WMS as an element of the booklet of Menlo DirectTech of the solutions of technology.

The result should be total availability of the solution of Provia, in particular in Europe and country of the Pacifique coast. Menlo in the whole world was formed in December 2001 and includes the operations of the forwarding world of Menlo (formerly emery forwarding), world logistics of Menlo, the vector SCM, world technologies of Menlo, Menlo in the whole world dispatch! , and world business services of Menlo. It has incomes of $2.7 billion (of USD) and employs more than 15.000 people. Its companies also provide total services of chain of provisioning under the mark of Menlo WorldwideSM including/understanding the air cargo, ocean freight, management of total logistics, pressing transport, consultation and technology of chain of provisioning, and broking and other of customs of the services of the trade in more than 200 countries. Menlo in the whole world is based in Redwood City, California (US) and is a segment of businesses of CNF Inc., Palo Alto, California-based, $4.8 billion the management companies (USD) of the total services of chain of provisioning which also has companies with the haulage and the manufacture regional of bottom of page.

In fact, the world logistics of Menlo was customer 3PL de Provia 'of S first which currently employs Provia 's ViaWare WMS and products of SPS in more than fifty customer-specific equipment through the USA, Europe, Asia, and Australia. New constructions of agreement on the existing 3PL report/ratio traditional, as Menlo can now authorize Provia 'produces S WMS with the existing customers of Menlo, who can now actuate the software themselves, or can use Menlo 'technology and personnel of S on a transitory or permanent basis.

By Menlo 'agreement existing of codveloppement of S with Provia, the company should be able to develop the prolongations of product which meet the specific needs of its customers as combine without ViaWare seam with its other solutions of SCM. It can now offer ViaWare to the customers who are interested by increasing Menlo 'operations total of S and machiner of the possibilities when they buy a management solution of warehouse. By using the sales of Menlo TEAM to resell ViaWare in addition to Provia of 's have the personnel of sale should increase ViaWare 'presence of S to an assistance much larger and increase the penetration of the market of Provia 'of S and the improvement of mark to a total assistance. Provia could be able to include the customers Menlo-with origin like which much more sites around the world using the solution of Provia WMS.

For Provia, the capacity to increase the conscience of the company 'the solution of SCE of S for a total assistance by the company 'the association of long time of S with Menlo was the next normal stage of the report/ratio. With knowing, Menlo was one of the first adopteurs to embrace Provia 'cost of S of concept of the property (operating burnup), in which its customers are authorized to manage their projects of the initial execution, and able total to make the changes and the levellings of configuration rapids of system with the minimal participation starting from Provia.

Provia approaches RFID in a double way Part one: Recent Annoucements

At the end of May, Provia announced with the distribution/ expo computer 2004 Chicago, Illinois (US) that its event of ViaView/management alerts and produced of decision-making aid plays a main role in the visibility of offer to the data of chain of provisioning for companies providing the products RFID-labelled to Wal-Mart and to other retailers. ViaView supplements Provia 'continuation of SCE of S ViaWare. ViaView is continuation of the management of event of chain of provisioning of Provia 'of S (SCEM), visibility of offer, management of event, analyzes execution, and possibilities of work of analysis.

It is well-known to date that the suppliers of the main thing one hundred of Wal-Mart 'of S will have to provide to the giant with the detail the cases and the pallets RFID-labelled as an element of a beginning required of pilot project in January 2005, because Wal-Mart envisages to employ RFID to detect products on the level of case and pallet in its chain of provisioning. The other suppliers of Wal-Mart will have to provide labels of RFID on all the cases from here 2006. Thus, the technology of RFID up to now saw only the fast adoption, mainly with the passive labels of RFID applied to cases and the pallets, whereas the communication during some time remain only point by point between a supplier and a retailer of end. This is given to this full network of CPE, (which will be described in more detail later in this article), will not take place places from there from here 2005. Consequently, of the traditional terminals of RF will be still used and from the codes bars will not be stopped in the future.

Always, the suppliers of Wal-Mart had also sought manners of increasing their investments of RFID in their own organizations in addition to simply achieving the ultimatum placed on them. For this purpose, Wal-Mart recently offered to provide information to its suppliers concerning the statute of the products labelled by RFID while they progress by the chain of provisioning of Wal-Mart 'of S. It should have great value there while being able to integrate these data with the solutions of corporation of system which the companies employ to detect of the products.

ViaView contains a warehouse of data like a store of data, which is it component in real-time which makes it possible customers to subscribe to an opinion of event (for example, an alarm when forwarding is made) or in an opinion of not-vent which lets store the personnel to take the method of recovery before a problem emerges. The users of Provia 'of product of management of event of S ViaView will be able by this supposedly to benefit from this feedback and to derive the value using ViaView 'tallies of analysis of execution of S and physical services of the language of beaconing (PML) (which will be described in more detail later in this article).

A demonstration of product was held with the expo of D/C to illustrate the concept. Provia showed how, with ViaView, a company of supplier will know the period of turn of the products to each stage and can be announced if something out of ordinary occurs in all the chain of provisioning. Provia believes that the suppliers with Wal-Mart and others the admission of the funds of third RFID will now have a better idea of how long their products spend with each stage of the chain of provisioning to the detail, which it information could be instrumental to reduce the total quantity of material in the chain of provisioning while always satisfying the rigorous requests of the customers to the detail.

As already discussed in the need for SCP and SCE to collaborate for a better realization, in addition to the demanding functional possibilities mentioned above business applications of chain of provisioning (SCM), integration without seam of the compromise applications and decision-making aid became completely important, and, consequently, the modern systems of SCE provide the tactical and compromise backbone for the realization of order and the visibility placed on their functionality of core of management of order, storage, transport, court, and inventory control. To be able to react to a request for fluctuation, to answer the characteristics of customer, and to coordinate messages of event in real-time of the multiple disparate systems, these systems are further increased with possibilities of decision-making aid and the engines of planning concerned order the realization and the inventory and order the visibility of statute.

Thus, to supplement the continuation of SCE of ViaWare is continuation of ViaView, of Provia 'of S SCEM, visibility of offer, management of event, analyzes execution, and possibilities of work of analysis. It connects by interface following execution of ViaWare via the Web, the email, the bipor, the fax, or the documents of Extensible Markup Language (XML), And it is connected by interface also to other SCE, planning of chain of provisioning (SCP), and produced planning of entrepreneurial resource (ERP) or systems of legacy.

Provia had also addressed the collaboration and the management of the output of chain of provisioning, by the supply of the tools which make it possible customers to place the indicators of principal execution (KPI), supervise their execution against KPIs, and inform them when KPIs are specific limits outside. A structure based on the WEB connects all the possible environments of execution together and allows a great sight of image of a whole chain of provisioning and measurements of KPI. The product has an engine to supervise the climbing of the events and not-vents (C. - with-D., events or the activities which did not occur, but were supposed). The management of event in ViaView automatically seeks a model of the events reiterated throughout the jour/de semaine/du month. When tendencies or the models are discovered, ViaView creates the alert messages informing the suitable parts.

In addition to the management of event, ViaView also includes the climbing of event, with which, in addition to the events of monitoring, ViaView also supervises answers of operator to these events. For example, if a condition of error continues for a certain number of hours after ViaView creates the first alarm, ViaView will send another alarm to the same person or will climb alarm to the top of the chain of command to ensure the visibility and the resolution of a potentially critical state.

Another important sector and often neglected that the climbing of event address is the monitoring of the events apparently not-correlatives. An example in the way in which ViaView can supervise for models of the events with time would be on several occasions short-forwarding that the same multiple of customer stop watch. While each individual short-forwarding could start an alarm of ViaView, the product also supervises the larger image and would alert users with the more important reiterated model emerging and would take account of a faster resolution of the main cause of the problem. An example of the product of 'use of S would be office supplies of profile high customer, which had employed the product for the visibility in its whole network of agency so that it can match each retailer 'inventory of S to forthcoming orders

Provia approaches RFID in a double way Part eight: Challenges and recommendations of user

Nowadays when the identification of radio frequency (RFID) is constantly on each one 'lips of S, and when each suitable supplier of application of company protects his bets towards becoming RFID-ready or convinces even the market that is exactly its solution RFID-in conformity what it doctor (like, Wal-Mart, targets, Albertsons, the U.S. Defence Department [DoD]) ordered the quiet software typical of Provia (www.provia.com), a private-held supplier of the solutions of software of the execution of chain of provisioning (SCE), judge naturally that time came during him to be more vocal about its efforts of RFID, though after it has already made so much efforts in terms of validation of principle in the field.

At the end of May, Provia announced with the distribution/ expo computer 2004 Chicago, Illinois (US) that its event of ViaView/management alerts and produced of decision-making aid plays a main role in the visibility of offer to the data of chain of provisioning for companies providing the products RFID-labelled to Wal-Mart and to other retailers.

Moreover, at the end of March, Provia announced that it was aligned with its head office for more than fifteen years, systems of Viastore, a leading vendor of automated storage and the systems of recovery (AS/RS), and the control systems of material handling, with more than 3.000 cranes installed in the whole world.

As for the products 'improvements functional, at the end of 2003, Provia announced the release of FourSite 4.4, a levelling of its solution of realization directed towards suppliers of the logistics of third (3PL). The globalisation on an industrial scale is a big factor affecting the logistics and the management companies of chain of provisioning.

Always, Provia 'challenge primary education of S overcomes its lack of visibility of the market. During the twelve years that it had actuated like systems and engineers de Haushahn, the company had established a reputation among a selected group 3PL suppliers and distributors. However, Provia will have to widen its call and more clearly to articulate its expansions in other verticals if he hopes to defend with far competition from other management systems of warehouse (WMS) and suppliers of SCE.

Competition exactly negligible is not either given a group of suppliers of WMS providing collaboration, the visibility, and the functionality sophisticated of management of event, and good number of them are uniformly advantageous, public, and have more visibility and of mindshare. In addition to the associates and Yantra of Manhattan, the list of the latter would contain Swisslog, in height, Optum, RedPrairie, systems of the HK, and International of catalyst, to call some. The lack of support of the iSeries of IBM (C. - with-D., old AS/400) could prevent Provia 'point of S on the retailers, who segment supposedly precisely prove to have embraced the platform, and where some suppliers are happy to oblige, in particular the Chief of SCE that Manhattan associates.

Moreover, Provia does not have a considerable number of alliances with the complementary suppliers of software, such as the planning of (ERP), management entrepreneurial resource of report/ratio of customer (CRM), and supplier of the integration of application of company (EAI). Foreseeable, SAP is the only principal supplier of application of company for which Provia coded a certified interface, whereas Provia integrated into the multiple of other products of ERP by a standard interface of host centre, passage de ViaWare. Its lack of much of exploitation of mention of the services of Web could also be perceived like latecomer, since the sector of the realization of order and the forwarding of parcel lends itself apparently to the use of orientated architecture towards the services of product.

One should never not discount competition coming from the gorillas of ERP 800 books like SAP, Oracle, PeopleSoft, and the total ASS, which, although always with products of the beginner WMS/TMS (who is also dubious at least for the total ASS after his acquisition of old technologies of chief EXE of SCE, to see the ASS WP to carry out (however) another acquisition), becomes more aggressive in their great user bases due to their incantation of integration of ERP. The tastes of the software, Intentia, the IBS, the SYSPRO, Adonix, and the ACCPAC of Lilly which also embraced a strong product of WMS in addition to their traditional products of ERP, could prevent Provia from penetrating the semi-market of ERP, in particular in the less complex cases of environments, with the basic gathering of case and pallet, the frank interleaving of task, and the RF, the label and paper slectionnables by conditions of working area. Although we do not discuss the tastes of Provia of 's WMS functional, TMS, YMS, and supremacy of SPS, in much of case, the prospect customers can like the difference in a poorer functionality for a-stop-make shopping arrangement of their supplier of ERP (see the suppliers of ERP to take a lead in the sure asylum of SCE/WMS).

Provia should thus continue to support its recent realignment with Viastore and identification of image with other initiatives of sale to penetrate of the distributors of semi-line and companies with the detail. The higher customers of line can contribute to the growth by folding up simple achievements of site to others parrts of the organization, but the semi-market develops faster and offers great rewards for the suppliers who assert a right early. Moreover, the market had more and more appreciated the requests to control a network of realization, an exploit that Provia can address with ViaWare by aiming its message suitably.

Functionally, Provia should plan to acquire or be combined with a supplier of software which offers the total support so that the ocean, air, and the means of transport of rail widen the range of its TMS, and the company 'the print of step of solution of S.A. need for improvements in terms of conformity of logistics for international business (ITL), management of contract, and process of payment. Consequently, the company could still have to make acquisitions or associations to quickly provide a product to several operating processes complete of transport which is in conformity with the total trade.

Because of motionless the rather recent availability of the simple source code for the multiple platforms, Provia must always improve perception of its aptitude for the semi-market, and increase its identification of mark in the market of TMS. Because of an user base of beginner (less than thirty customers of TMS), the company could still be omitted in much choice of TMS in spite to have a long time provided possibilities like the consolidation of order, optimization of route, management of rate of carrier, the exchange of information electronic (EDI) binds with the carriers, payment of advance and integrated forwarding based by Internet on the delivery (THIMBLE) and claims management, the economic majority of determination of mode (C. - with-D., parcel, less than loading of truck [LTL], full load of truck [FTL], distribution of swimming pool, stops in transit), the calculation of the best route for the multiple stops, the choice of carrier, capacity of bottom of page, and exactitude with five digits of postal code, but only for advance of the means of transport of carrier.

Impact of the technology centered on the needs on the market for SCM: IBS

International economic systems Sweden-based of supplier of the management of chain of provisioning of planning (ERP) and of entrepreneurial resource (SCM) (IBS) (XSSE IBS B), whereas currently not a total supplier of semi-market uniformly well-known, seems to be carried in balance to change this situation. While the markets of ERP and SCM suffered in all the dull end several years, IBS also felt a pinching of flat incomes to almost $350 million (of USD), but remained most of the time advantageous. It was a notable exploit, particularly with its ambitious effort of development of product is combined with the difficult competing situation of sales. (See the part one)

The part three of. slow IBS but strengthens (and centered on the needs) the victory of May the series of race of SCM.

After corrosive the ball a few years ago and making a substantial investment by rcrivant basically its flagship ASM ERP/SCM offering to return him to it Web natives and the services of favorable Web solution (XML and Java in conformity), and to develop the new edition of company of Java 2 (J2EE) - products based like the virtual company of IBS and the integrator of IBS, IBS seems to survive to the bottom with the continuous economy completely well. IBS the company that virtual, which integrate and coordinate various economic systems in the chain of provisioning, was frankly received by the market, and a certain number of projects were led in the name of large customers.

The market for solutions of integration is likely to be a sector of growth interesting during the next years, and IBS has an attractive offer for these companies with a complex and the expensive management software of company to the group and the head offices level, wanting to lower their costs and to accelerate the execution in their effective subsidiary companies by employing IBS 'management software of company for these companies.

In spite of its resemblance in the face, the geographical insurance, and modesty, once compared with the flamboyancy of its North-American pars to its Statistics financial international of pars of Swede and Intentia (see that the Statistics financial international continue its rinvention by pruning and Intentia the 's Movex for food and drink: Gaining a balance in North America), IBS always paid the great attention to its tax health. Consequently, its assessment is relatively clean and strong, and the leadership team mainly was places from there since the company the 'beginning of S.

The supplier has a history who is characterized by finances of growth and stable, and it carried out a benefit in a total of twenty-five of the twenty-seven years when he tes on the market. Even in 2003, in spite of a continuous weak IT-MARCH, IBS succeeded in meeting its aim established to carry out a benefit after the financial articles. It was due possible inside to heavy tiny room operating costs accompanied the competing solutions and services. With compound these prevented income of the reduction by more than five percent, which are considerably lower than for several of its competitors.

An improvement of potential of the market and an increase in benefit (after the financial articles) was seen in 2004. It was ascribable to the increased licences of software by approximately six percent, an invoicing more raised by advising which has to lead to the professional fee a margin improved raising of 20 percent to 22 percent, and most of products coil-developed, which increased the margin of licence of software of 90 percent to 92 percent. Moreover, the supplier improved of the benefit in the crucial Swedish operations.

During 2004, IBS also reinforced its position in a certain number of sectors, including the distribution of pharmaceutical, electronics, the provisioning industrial, the machines and the equipment, the market of the accessories of the motor vehicles, the management of property, paper and packing, and the food products. Here, a certain number of new international agreements of customer were written in these sectors. The effectiveness of the development of software of IBS will continue to improve of other manners, by the provisioning outside increased with the inexpensive countries. IBS currently has part of its development in the inexpensive countries such as Portugal, Poland and India. China will be also considered since IBS decided to increase its presence in this expansible area.

To the credit of IBS, the supplier had a long time aimed his sales and development efforts to proven technologies and weak risk of medium and great search for companies which have low total costs of property (operating burnup), and is relatively easy to use with bottom taken and risks. These companies of technology and cost-sensitive have until recently given on per many suppliers of company. After several years of the investments in fall in IT, there still was a need driven back among many companies and organizations to increase profitability and competitiveness using the new or improved management software of company. The priority, especially, is granted to the investments which can produce measurable improvements and fast refunding by lower costs, the service to the customers increased, chains of provisioning integrated, the improved financial order and information to the management of company. Another of the more important changes of the IT-MARCH is the respective management of IBS of 'companies, which considerably more are implied in the decisions about the economic systems and of IT of the investments. This led to a change of the hearth of the evaluations often more technical more financially and more commercial to evaluations, which requires both management software of company specialized, as well as the skilful advisers for his execution.

An increasingly significant number of the companies, and in particular of the companies with operations in several countries, discovered that it is not only one functionality of management software of company which is of decisive importance in the advantageous guarantee HIM of the projects (see the easy ERP: A challenge with the conventional thought). Of equal importance is the real project of installation, in combination with the continuous support and the later development. For this purpose, IBS has during many years concentrated its attention on providing the support of execution for its customers by a combination of the commercial advisers (with the experiment of the specific industrial sectors) and of the technical advisers. It is this combination of knowledge about the processes of businesses of customer, of the technical skill and a management system of strongly developed project which is the key with the successful installatiion of the management software of company.

Consequently, IBS developed a new concept where, like its customers, customers the sectors with the greatest potential for the improvement can identify relating to IT investments. This concept can also help these customers followed and measure critical factors of success and the KING in projects carried out. For this purpose, majority of the directors of IBS, personnel of sales, and operational advisers underwent the formation in this method, with accompanying by the systems of analysis and follow-up. This remains an important angular stone in IBS uninterrupted efforts towards more sales and of satisfaction of the customer increasing.

The market for the management software of company is mainly differentiated by a certain number of various suppliers and national and international integrators of system (IF). In spite of unrestrained fusion and acquisition (the activity of M&A) on the market, there remain several hundreds of companies in the whole world which develop the economic application software. The majority of them are relatively small companies or averages which frequently locally are directed or specialized in certain types of the applications and vertical segments. Several of these local and smaller suppliers will disappear or will be amalgamated with greater constellations never expansion.

In the future, we estimate that three categories of the suppliers of company will remain lit the market:

* The first category is composed of a limited number of large and vast international suppliers, such as SAP, Oracle and Microsoft, which cover the majority of the types of applications. The total ASS and the comprehensive solutions of Infor also seem to crawl in this group. IBM also lines up in this category, though deputy, given the lack of its own applications.

* The second category comprises the internationally active and average companies such as IBS, which specialize in selected sectors of the market and special segments of customer. IBS, with a certain number of pars full with the line two, such as QAD, Statistics financial international, software of Lawson/Intentia, or Adonix. These companies are not the aggressive unifiers, like their more big brothers, but are more organic farmers with an inclination for selected acquisitions. They could be proof of crown that the market does not transform yet into Sève-Oracle a duopoly. In some geographical and vertical places of industry, such as Scandinavia, Belgium, Portugal or the Netherlands, IBS remains strong. IBS has international operations with twenty-two subsidiary companies and ten associated in the whole of Europe, of Americas, and Asia Pacific.

* The third category is composed of the hundreds of smaller or room-directed companies which concentrate on a geographical specialization or sector-based narrow (see the competitive advantage on a saturated market: How the large one little do it?).

But, contrary to the majority of the suppliers of par, including the Swede mentioned above one, who began their applications of ERP in the manufacture or the financial space of application, IBS established the first time a strong presence and the functionality in the distribution and logistics set up. With a part, IBS specialized in management software of company to sell and the companies of distribution as well as the manufacturing companies centered on the needs and rapids. After having controlled the idiosyncrasies of the conditions Scandinavian of businesses in procedures of distribution, administrative, and of accountancy, the company is remained the leader of local market, in spite of the strong competition of the international suppliers of ERP. It is well in conformity with the current tendency towards giving relations of customer and order a focal position in processes of businesses. At the same time, the volume-directed production is replaced more and more with the countries at low prices such as China, Mexico and the countries of Eastern Europe.

Slow but strengthen (and centered on the needs) can gain the race of SCM

International economic systems (IBS) (XSSE IBS B) is a total supplier Sweden-based of the solutions of software suitable for the industry of the management of chain of provisioning of planning (ERP) and of entrepreneurial resource (SCM) and other services of embracing accompaniment for companies of technologies IBM-based. Since the beginning of the Nineties, IBS carried out a certain success in transitioning mainly to be a supplier Scandinavia-based of solutions to a player on broader European, the North-American Pacific Asia, and markets. It now has a global area network in more than twenty country.

IBS remains mainly a company of performances of service led by the sales of its booklet expanding of application of software of company. IBS concentrated a long time on selling the strong functionality of distribution approximately supplemented by finances and manufacturing the functionality, including the hearth on logistics, the treatment of sale order (SOP) and storage. It also provides general financial management, accountancy, and a certain functionality centered on the manufacture of light products. Its market is technologically made up of the preserving companies and of intermediate size which seek the counter clerk a-stop-make shopping solutions of a simple supplier. This market segment is currently without apparent chief, and one of the reasons only that some suppliers chose to address this low-end of the market of distribution is probable because it proved to be a less advantageous market segment (less thefriendly one).

Nowadays, IBS provides three principal types of services: software, services professional, and hardware. The company the software of S covers the fields of the sales and supply of collaboration, service to the customers, management of order, manufacture centered on the needs, inventory control, measures execution of businesses (BOM), and orders financial. It also provided solutions of software for the specific markets distribution-intensives, including of and the motor vehicle motor vehicles left the distributors, the durable consumer goods, the electric products, the electronics components, food, of the industrial provisioning, tools and industrial plant, equipment and of the medical provisioning, paper and material of packing, the medicinal products and health care, of the independent wholesalers, and distributors (B2B) of company to company. This vertical strategy was sales and marketing-related, and appeared in IBS day order of development of product.

IBS 'services professional are composed of the analyses of the processes of businesses and potential of improvement, support to the customers, development of the complementary systems to measure, the follow-ups of the projects and the results carried out, execution, strategy of technology information (IT) and design of system, modification and development, execution and maintenance, management of the projects, and formation. Its products of material are based on the material of iSeries of IBM (formerly AS/400) and include the computers and the equipment of network which contribute towards solutions of SCM such as the adaptive solution of chain of provisioning of IBS Pharma for the pharmaceutical distribution.

Recently, IBS refined its total strategic direction which long business transactions focused on the average and large companies, and the subsidiary companies of the important groups. The strategy is based on the following angular stones:

* A hearth on the principal sectors of the market in which IBS can maintain a principal position, provide to customers raised values, and carry out this way a noise level of profitability;

* a emphase on the solutions of industry of sector which include the pharmaceutical distribution, industrial electronics components, provisioning, food, publishing and of the durable consumer goods;

* a situation of market closes by the acquisition of the companies with complementary user bases and competence;

* a presence of the global market in order to be able to serve the international groups, such as decision 2004 at the offices open to Tokyo and Changha;

* total solutions of offer based on professional services (with the advisers experienced with the knowledge of suitable industries), of the waiters and the solutions of network as well as financing, all to guarantee for long-term relationship with customers (at least ten years); and

* profitability in the development of product, marketing and the sales, execution and support, to offer the solutions integrated at a competitive price.

IBS believes that the value for its customers should come from his capacity to

* provide the vertical solutions and the processes to multilevel for organizations of collaboration;

* apply the projects of customer with mainly own resources;

* work mainly with its own software, in combination with some solutions of software adapted to the customer requirements;

* embrace the specific hearth on the distribution, manufacture, and the companies of performances of service; and

* carry out a market-principal position by concentrating its efforts, passion and expertise on the companies and industries mentioned above.