Mid-market magnetism
SCE vendors set sights on medium-sized companies, tweak systems, at DC Expo
By Karen Abramic Dilger, Contributing Editor -- Manufacturing Business Technology, 7/1/2001 12:00:00 AM
Bigger is not necessarily better, particularly for suppliers of supply chain execution (SCE) systems. In fact, squarely in the middle is where many SCE vendors want to be today.
SCE is the industry moniker for systems that combine warehouse management, transportation, logistics, and other functions in a single suite capable of speeding order fulfillment.
The mid-market—defined by many as medium-sized companies that post revenues in the $250-million to $1-billion range—quickly is becoming the quintessential sweet spot for many suppliers. As testament to this trend, a number of exhibitors at DC Expo, held in May in Chicago, launched initiatives bent on meeting mid-market needs, including redesigned systems that emphasize flexibility, less risk, and quick implementation.
New initiatives
HighJump Software, an Eden Prairie, Minn.-based SCE supplier exhibiting at the show, was eager to tout its expertise and traditional Tier 2 roots, and point to the adaptability of its solutions. "Most suppliers offer a percentage of their solutions out-of-the-box, while the remainder is custom code," says Craig Levinsohn, a company vice president with HighJump. "This makes upgrading a nightmare. Our tools-based approach and component architecture make our solution highly adaptable and configurable."
To back that up, the company has created the HighJump Challenge, a program that guarantees fixed prices on specific changes to its system for a two-year period after its purchase. With the program, the company hopes to eliminate the problem of miscalculated total cost of ownership figures, and realistically predict the cost of future solution modifications. "We want users to challenge us to prove we can address certain changes before they buy the solution," says Levinsohn. "Companies often are very shocked to discover the true cost of a solution, so this is a way for them to protect themselves."
Web-enabled deployment and fulfillment functions are additional new feathers in HighJump's cap. The company points to an implementation at Property Bureau that it says shows how the latest in supply chain visibility and event management can work well in an on-line setting. Property Bureau, which handles the distribution and management of stolen goods from police departments, uses the SCE system to catalog items on its Web site and track inventory. The system submits orders to an on-line auction where the highest bidder wins the deal.
"The system looks into property inventory and alerts the winning bidder when goods will be shipped," says Leo Schmidt, a HighJump company product manager. "It also manages manifests and credit card payments, and updates data repositories in the enterprise system."
Meet in the middle
Since Atlanta-based SCE software vendor Manhattan Associates is known to play in the Tier 1 space, its acquisition of SCE vendor Intrepa last October may have seemed like an unlikely pairing, what with Intrepa firmly entrenched in the Tier 3 market. However, Intrepa's mid-market offering gives Manhattan the fuel to forge ahead into the Tier 2 space. Manhattan introduced PkMS Pronto at DC Expo to meet the needs of medium-size companies—more specifically, ease-of-use, fast implementation of eight to 12 weeks, and low cost.
Tim Conroy, a company vice president, points to PkMS Pronto's "soft" coding architecture as a primary reason for the system's flexibility. "With non-rigid coding, users can configure the system in stages as it's being implemented. We provide data and fields for users to choose from, but users decide how the system should be set up." For example, a user may configure the system to pick emergency orders from a top racking location for a specific zip code. Or, one site may refer to "part numbers," while another uses the term SKU.
PkMS Pronto includes three new add-on modules. The Warehouse Control Center graphically represents ongoing facility activity using charts and graphs to highlight bottlenecks and plant processes. Asset Management combines elements of performance management and activity-based costing by focusing on usage figures regarding people, teams, and equipment. Pronto Exchange is a collaboration tool for outbound processes, including functionality for order status and alert messaging. "Pronto Exchange can be used to Web crawl to sites, such as UPS or FedEx, to obtain data and pull it back to the user," says Conroy.
Conroy estimates the total cost of the system to be in the $250,000 range, with $75,000 to $150,000 for license fees, $75,000 to $150,000 for implementation fees, and a final $25,000 to $45,000 for hardware costs. The company has six beta test sites currently deploying PkMS Pronto.
| Vendors mentioned in this section | ||
| Adexa www.adexa.com | EDS www.eds.com | Fourthchannel www.fourthchannel.com |
| FreeMarkets www.freemarkets.com | HighJump Software www.highjumpsoftware.com | i2 Technologies www.i2.com |
| J.D. Edwards www.jdedwards.com | Manhattan Associates www.manhattanassociates.com | QAD www.qad.com |
| SDRC www.sdrc.com | SeeCommerce www.seecommerce.com | UGS www.ugs.com |
