Delivery and demand

Staff -- Manufacturing Business Technology, 7/1/2001 12:00:00 AM

There are two aspects to deliver processes: customer facing and distribution channel management. Customer relationship management systems are being introduced with functionality for specific vertical industries. Sell-side solutions use Web technology to reintermediate distribution channels. Core applications for deliver processes arose from warehouse management systems, which have grown up to address a full range of fulfillment processes, using event management technology to coordinate those processes.

4 Siebel Systems

The customer is king

A sure sign that you have a hit product is when other companies try to imitate it. That phenomenon kicked in soon after Siebel Systems, San Mateo, Calif., introduced its first sales force automation software package in 1993.

Since then, software developers have combined sales force automation capabilities with product configurators, call-center applications, personalization technology, and numerous other features to create what are known as customer relationship management (CRM) suites.

Industry analysts expect businesses to purchase as much as $7.5 billion worth of CRM software this year. They also expect Siebel Systems—which by most estimates commands a 33 percent share of the CRM market—to remain the world's leading CRM software supplier.

The staff at Siebel Systems, headed by CEO Thomas Siebel, has similar expectations. And if you ask how they will meet those expectations, they will say by doing what their products are designed to help other companies do—providing superior customer service.

Thomas Siebel has always believed that keeping customers happy is the key to running a successful business. He also believes technology can be instrumental in supporting customer service programs. He first acted on those twin beliefs in the mid-1980s, when he was an executive at Oracle Corp., where he developed a software package to help Oracle's product marketing staff track their contact with customers. He wanted to market this product to other companies as well, but Oracle Chairman Larry Ellison didn't think it was a viable product at the time.

In 1993, Siebel teamed with Pat House, another former Oracle executive, to build a sales force automation solution and subsequently launch Siebel Systems. As the company hit the $1 billion-revenue mark in just seven years, many competitors entered the CRM market, including Oracle and other enterprise resources planning (ERP) vendors. But Siebel still is the industry's sales leader, and many analysts believe it has the best overall set of products.

Siebel now offers applications for selling products and managing customer service programs over the Internet. It also has a host of field service applications that run over the Internet, and with numerous sets of Web-based customer service applications for companies in specific vertical industries.

With this lineup, Siebel Systems now refers to itself as an e-Business software supplier, rather than a CRM supplier.

26 IBS

IBM ties foster new Java-based product

According to CEO Steffan Ahlberg, Sweden's International Business Systems (IBS), which has North American operations in Folsom, Calif., the last 12 months have been a year of mixed fortunes. "The Queen of England's famous 'annus horribilis' comes to mind," he says. "It's not been quite that bad, but close."

On the product side, the news has at least been relatively favorable for this vendor of an integrated suite of supply chain, customer relationship management, and e-Business software. Version 4.5 of its ASW system was released during the year, and has been well received, says Ahlberg. Even better, the company claims the first commercial sale of a 'San Francisco'-flavored Java-based product—an application that allows companies to link their partners, subsidiaries, and manufacturing operations. Christened, perhaps predictably, "Virtual Enterprise," this too has been well received, says Ahlberg.

But it's the pedigree of the development as much as the product itself that is important. Over the last few years, IBS has made much of its close ties with IBM, and the Virtual Enterprise product is the first commercial product to come out of IBM's WebSphere development program, which Ahlberg comments is "a significant investment for both of us."

Yet despite progress on the product front, developments elsewhere have been less welcome. Financially, there has been a "fairly drastic reduction in profit," says Ahlberg. After a poor previous year, IBS had been expecting strong demand that didn't materialize. Given fixed marketing and development expenses, these subsequently form "a larger percentage of the pie," Ahlberg says, when the expected sales didn't happen, thereby taking away from profit.

That said, Ahlberg is confident that the light at the end of the tunnel isn't simply an oncoming train. "We've seen increases in license fees, but it's been a case of 'too little, too late,'" he says. "We saw a 20 percent increase in the last quarter of 2000, and the signs are that this trend will continue. Overall, we've had two quarters with growth in license revenues and income."

40 Manhattan Associates

Acquires Intrepa, continues rapid growth

Success breeds success, especially when a software company invests heavily in development. "We have the largest research and development budget in the industry, and what allows us to do this is ten solid years of profitability," says Alan Dabbiere, chairman and a founder of Manhattan Associates, an Atlanta-based vendor of supply chain execution (SCE) and warehouse management system (WMS) software.

"Our success has allowed the company to invest in future product development even in these uncertain economic times," says Dabbiere. He adds that the company's growth rate of better than 60 percent per year for the last several years was not generated through acquisition. "Much of that growth is because of our ability to execute on our vision of integrating the extended supply chain."

Manhattan Associates' basic mission is to improve supply chain effectiveness and the efficiency of its customers. "This is a very different approach than moving and tracking inventory in a warehouse," says Dabbiere.

The core product for Manhattan Associates continues to be PkMS, which features SCE and WMS functions. The company also offers transportation management system (TMS) software, and collaborative commerce solutions.

This range of applications helped Manhattan Associates pull in $133.1 million in revenue last year, up 64 percent from 1999's $81.3 million in sales. The strong growth continues this year. For Manhattan's first quarter ended March 31, total revenue was up 27 percent over the same period in 2000, and software fees were up 56 percent.

A major development for the company was its acquisition of SCE vendor Intrepa last fall. The $30-million deal brought Intrepa's Logistics PRO WMS and Logistics PRO TMS products into the company's lineup.

Also relatively new is infolink, a Web-based collaborative commerce and business community integration solution. The software integrates with multiple WMS, TMS, and enterprise resources planning (ERP) suites, and leverages eXtensible Markup Language and BizTalk, Microsoft's integration server product.

Alliances abound for Manhattan Associates. One is with Rockville, Md.-based Manugistics, a provider of enterprise profit optimization (EPO) solutions for enterprises and e-marketplaces. Under this alliance, PkMS will be embedded within Manugistics' fulfillment offering, which the vendors say will provide an integrated fulfillment management and SCE solution. Manhattan Associates also recently partnered with ERP and e-Business software vendor Intentia, Schaumburg, Ill., to integrate PkMS with Movex, Intentia's suite of ERP and supply chain management software.

43 EXE Technologies

Riding the collaborative wave

With its first year of life as a public company now behind it, EXE Technologies, a Dallas-based provider of fulfillment, warehousing, and distribution solutions, seems to have successfully navigated the bear market and now finds itself with the opportunity to take a leadership position in the supply chain execution (SCE) market.

One of the reasons for this success is the overall growth of the SCE market, linked by some to the rising demand for collaborative processes by manufacturers. EXE and its primary competitors all posted strong results for their respective fiscal 2001 first quarters, indicating a general acceptance of the solutions they provide.

In EXE's case, that acceptance is all about enabling collaboration between manufacturers and suppliers on the creation and execution of supply chain plans. EXE's software allows companies to use both the Internet and traditional communication methods to manage and control the flow of inventory throughout the supply chain. Customers include companies in industries characterized by large product selections, high transaction volumes and increasing demands for customer-specific order processing.

"The greatest challenge to collaboration is to have your own house in order before you open your kimono to your collaboration partner," says Bruce Welty, an EXE senior vice president. "Planning is primarily batch, while execution is primarily transactional. This means we deal with a dynamic data set, as opposed to a fixed data set."

Welty likens EXE's role to that of a financial bank that takes care of money while EXE takes care of data, keeping it nice and neat for anyone in the supply chain process to access as needed. "The collaborative process will drive execution," Welty says. "It is a significant factor in running a business well, in terms of revenue and cost/management."

Two key factors that have insulated EXE from the economic downturn. "We have a broad international footprint," says Welty, "and we're seeing a lot of growth overseas. We get about 40 percent of our revenue from outside the U.S." In fact, software license revenue growth in Asia Pacific was almost single handedly credited for the success of EXE's most recent quarter.

The other factor is a healthy partnership with the 800-pound gorilla of the supply chain world, i2 Technologies. i2 sells EXE's fulfillment product under the TradeMatrix banner, and this channel is responsible for about 50 percent of EXE's revenues. "It's a nice fit with little, if any, overlap," says Welty.

54 Industri-Matematik

Solutions replace inventory with information

Back in 1998, it was possible to mention Mt. Laurel, N.J.-based Industri-Matematik International in the same breath as supply chain management software leaders such as i2. What a difference three years makes. At least in terms of sales, it's a stretch to group Industri-Matematik with a juggernaut like i2, but the fault isn't entirely that of company management. Indeed, after a torrid couple of years, there are signs that the company is once again on-track.

The company's VIVALDI suite of order management and fulfillment software remains at the heart of its product offerings. Its customers remain distinctly blue-chip in hue: Campbell Soup, British Airways, General Electric, FedEx, Starbucks, Ericsson, Volvo, and Sun Microsystems. All these and more have come to appreciate what company CEO Stig Durlow describes as "replacing inventory with information."

Richard E. Nutinsky, director of product strategy, points to three significant developments over the last 12 months. The first is a decision to target the retail market as well as the manufacturing market. To achieve this, Industri-Matematik bought a small software company called Itasca, and has been adding its retail-based inventory management expertise to the VIVALDI suite.

Closer to manufacturers' concerns is the continued development of the company's core logistics capabilities. In a deal inked in January of this year, Industri-Matematik announced that it is working closely with Canadian Tire Corp. to co-develop an extension to VIVALDI's supply chain planning capability in several directions. These include improved multi-channel distribution, enhanced supply chain capacity, and lower transportation costs.

Another core logistics enhancement, this time co-developed with longtime partner IBM, is the addition of customer relationship management (CRM) capabilities. This enhancement takes the contacts manager from Industri-Matematik's CRM solution and reincarnates it in the logistics package, allowing supply chain events and contacts to be better tracked.

The third development of the year took place on April 27, when major cost-cutting moves were announced.

The omens are promising. "We're completely debt-free, with cash in the bank," says Nutinsky. "We believe we've turned the corner."

57 McHugh Software International

Labor management cuts costs, streamlines goals

McHugh Software International's position in the supply chain execution (SCE) market and its strategic vision is unique for what it says, as well as for what it doesn't say. While its competitors may be discussing integration efforts or the advancements they've made in the e-commerce world, Waukesha, Wis.-based McHugh is talking about the importance of labor and resource management and how it relates to interenterprise goals for collaboration and visibility.

Although traditional SCE systems can do a better-than-average job of increasing efficiencies and cutting inventory at the warehouse and during distribution, adding labor management functionality can find hidden costs throughput the supply chain, says Steve Tonissen, an executive vice president. At the facility level, implementation of labor standards not only can help supervisors track and train operators, but also examine less obvious processes such as interleaving tasks, and establishing pooling points and continuous moves.

"Time and costs can be saved if operators on forklifts spend less time riding empty, or if pool locations can be set up to break up bulk items and distribute them," he says. "Or, load control centers can aid in consolidation across the enterprise."

Only a few of McHugh's competitors have developed labor management functionality, and for those vendors, it represents a small subset of a total solution, says Tonissen. Sales for McHugh's labor management applications grew more than 100 percent since last year, and interest has come from various size companies in numerous industries.

McHugh's future plans include development of optimization technology applied to execution-oriented activities. "We want to help overcome the difficulty companies have in coping with unplanned events, such as trucks not showing up, dock doors being unavailable, or deliveries coming in late," says Tonissen. "No one can plan to that level of detail, but with the right blend of optimization techniques and visibility technology, we believe we can offer something unique."

58 Descartes Systems

Network-based solutions delivery nets rapid growth

While some enterprise applications vendors have come late to the challenges of logistics execution and planning, Descartes Systems Group, Ontario, Canada, specializes in them. Descartes also has been delivering Internet-based logistics solutions for more than two years.

"Our heritage rests in three core competencies," says Jonathan Tice, a Descartes senior vice president. "These include capturing information from its source, such as an enterprise system; offering command and control capabilities; and giving clients technology for transportation optimization."

These core competencies are embodied in applications that are delivered as a supply chain network service, Tice adds. "We've got a full suite of solutions that enable collaborative relationships throughout the process, from order sourcing and managing inventories in the warehouse, to managing the transportation of those inventories," says Tice. "We provide the information they need as a network service, as opposed to a software offering."

According to Tice, Descartes' clients frequently need to tighten the time involved in getting inventories from the inbound side to the outbound side of the warehouse. "We enable faster cycle times and better control and visibility of that process," he says. "Another challenge we face is enabling our customers to manage inventory more effectively to meet customer demands, while lowering the cost of doing business."

While many supply chain management software vendors offer their software under traditional licensing and implementation, Tice indicates, "There is an inherent disadvantage to this approach because it puts the client into a systems integration role that is not profitable for them. By offering network services, we take responsibility for the connections and the data management, including privacy and security. We also resolve the differences in how data organizations communicate amongst each other, so our clients can operate in a more fluid and integrated fashion."

62 Firepond

Web-based CRM for complex products

Waltham, Mass.-based Firepond offers integrated selling solutions to discrete manufacturers as well as financial and insurance companies. With its customer relationship management (CRM) software, Firepond clients assist their customers in buying complex products and services.

Firepond's software establishes a single selling solution across all channels, says Klaus Besier, chairman and CEO. "We support the sales force, resellers, and agents with a tool that improves their effectiveness," he says. "The centerpiece is a configurator, that allows our clients to configure complex products."

"The more complex the product, the more our service helps," Besier continues. "High error rates cause delays. Our engine increases accuracy, which reduces cycle time. This system makes it easier for the sales force to find the appropriate features and pricing."

One example of a Firepond user with a complex selling process is truck manufacturer Freightliner, since a freight truck can have 100,000 variables. A client such as Compaq, with its rack-mounted computers, works with fewer variables, but its product variability is still complex enough to warrant a system to cope with a wide variety of product details.

To round out its product offering, Firepond acquired Brightware in January. "Brightware's e-services, allow a company to do needs-analysis in a self-service manner," says Besier. On-line buyers can express what they are looking for in their own words using Brightware technology. Then the request moves through Firepond's intelligent Web self-service system to take the customer directly to product pages, after which Firepond's real-time, interactive dialogues will guide the buyer through a consultative sales process, including needs analysis, product configuration, and dynamic pricing.

64 irista

Event management as bridge to integration

The rapid rise of supply chain event management (SCEM) as the key element for successful order fulfillment has taken the supply chain execution (SCE) market by storm. In fact, irista, a wholly owned subsidiary of HK Systems, New Berlin, Wis., not only has developed its own SCEM technology, but also is pegging it as the next frontier in the continual process of linking SCE and planning. While some experts and suppliers view the strength of SCEM as advanced enough to eventually grow into an application category of its own, irista believes SCEM's major role as a system integration tool is where it will find its more secure footing.

"The next frontier in this marketplace involves synchronization and coordination across multiple facilities, giving visibility throughout these sites, and enabling users to respond to changes in their supply chain network," says Larry Cinpinski, president and chief operating officer.

The power behind SCEM solutions rests in their messaging capabilities, workflow, and built-in alerts, which signal the appropriate people when problems involving inventory or orders occur. Says Cinpinski, "Optimization and fulfillment across an enterprise is a critical need today. Users must have the flexibility to change orders if necessary, and make better deployment decisions."

The need for SCEM only can grow, Cinpinski adds, because integration is such an important part of the current marketplace. "Very seldom do we see decisions being made based on one need for a warehouse management solution or a transportation system. Most users are looking for some type of integration capability. Our advantage is that we can offer a high level of interoperability."

The missing elements preventing the wide acceptance of a seamless integrated planning and execution solution are demonstrated success stories and a cultural shift toward "viewing, planning, and execution as one," says Cinpinski.

Although the economic downturn has slowed down major investments and deferred decisions, Cinpinski adds, "Demand still is there for solutions that can further reduce costs. Our users want to know what levels of inventory they need to have to maintain customer service levels, but not increase undue costs. It's a tough balance to keep, but it can be done."

67 Vertex Interactive

Acquisition results in powerful SCE player

Vertex Interactive may be a new name to many, but due to a flurry of acquisitions, the Fairfield, N.J.-based company hopes to become a commonly recognized figure in the supply chain execution (SCE) space. With roots in bar code technology and integration services, Vertex is making a name for itself by its purchase of four companies.

Vertex's first large acquisition, of Positive Developments, added hand-held devices and radio-frequency equipment to its suite of products. Last September's acquisition of Renaissance Software marked Vertex's foray into pure software, giving the company its SCE solutions, including Web-based warehouse management, transportation, and order management. Data Control Systems, purchased last March, is a provider of wireless inventory, material handling, order fulfillment, and tracking systems. And finally, last December, Vertex purchased Applied Tactical Systems, which offers a suite of software connectivity tools that allows integration to applications from enterprise system supplier SAP.

"The common thread linking these companies is their focus on supply chain execution, flexibility, and high return-on-investment," says Russell McCabe, chief operating officer and former CEO of Applied Tactical Systems. "We don't force users into implementing a particular architecture or deployment platform because we support all standard types, including the AS/400, Microsoft NT, SQL Server, Oracle, and Java." Also, Vertex recently partnered with Pitney Bowes for transportation management functionality.

A big challenge, says McCabe, is working with a savvy user community. "It's no longer satisfactory to only deliver product quality. Users want specific labeling and packaging, on-time deliveries, and fast and inexpensive transportation."

Vertex, which employs 300 in the U.S. and 200 in Europe, targets consumer packaged goods, pharmaceuticals, transportation, and third-party logistics industries. It defines its sweet spot as Tier 2 businesses, posting revenues of $250,000 to $1 million.

69 Catalyst

Integration equals greater visibility

Gone are the days when warehouse and transportation management systems were sold based primarily on features and functions. Supply chain execution (SCE) software vendors such as Milwaukee-based Catalyst say customers are much more concerned with learning how other type systems can integrate with SCE.

"Almost all the supply chain execution players are moving out of their traditional domain, either via acquisitions or third-party alliances, to answer users' requests for plug-and-play solutions," says Rick Gimbel, a Catalyst vice president. "We can't just walk in and install our warehouse management system as a stand-alone solution. Companies ask us to link to their Web sites, or make provisions to check order status for better information sharing with their customers."

Through partnerships, Catalyst has extended its SCE solutions to include visibility, event management, and collaboration capabilities. An alliance with Viewlocity, an Atlanta-based provider of e-Business integration software, reportedly allows users to integrate planning and execution applications easily.

Breaking through the cultural tendency to work in functional silos is a challenge many organizations face, says Gimbel. "Companies are asking warehouse personnel to do things they might never have done before, involving processes that don't bring immediate benefits back to the warehouse itself. It is difficult for one department to invest time and effort in something that will result in gains in another department or be a step in reaching overall corporate goals."

One way companies deal with this problem is to have one person oversee supply chain operations. The emergence of job titles such as "director of logistics and supply chain" is a result of this trend, says Gimbel.

Since current systems and information technology (IT) are more sophisticated than ever before, many users don't have the IT skills required to manage solutions themselves. Through a partnership with Kewill Systems, which acts as an application service provider (ASP), Catalyst users can outsource their SCE systems and take advantage of additional functionality from Kewill.

Kewill's logistics solutions include invoicing and shipment management functionality, as well as integration to the Kewill.net trading exchange, where users receive order status reports. "An additional plus to the ASP arrangement is that smaller companies don't need to invest in expensive technologies, such as EDI [electronic data interchange]," says Gimbel.

70 LIS

Worldwide SCE provider

LIS has evolved from a provider of warehouse management systems to a provider of complete supply chain execution systems (SCE). "We are one of the more global companies out there. Our corporate headquarters are in the United Kingdom, where we are very strong," says Robert Carver, a vice president for the Charlotte, N.C.-based company. "We are also very strong in continental Europe."

The company is taking that international strength and using it to build name recognition here in the U.S., where it has a strong presence in manufacturing, primarily in the consumer products sector. "We may not have had the recognition initially, but our products are taking hold here as people become more familiar with LIS," continues Carver.

As LIS has evolved into its current position as a provider of SCE systems, more opportunities for new markets are opening up to the company.

"One of the key components to our new systems is that they are built around the core of warehouse management and now include transportation management system [TMS] capabilities," says Carver. LIS now offers integrated TMS capabilities into its baseline product portfolio, addressing over-the-road truck scheduling, routing, and parcel manifesting.

Another key component in LIS's new systems is supply chain inventory visibility for both collaboration and execution. "VirtualView is a rules-based application using data held at the warehouse execution level to provide our users, their customers, and their suppliers with visibility of inventory and orders in the supply chain at a global level," says Carver.

Carver notes brisk sales performance for LIS, which generated revenue of $41 million last year. "Our company sales increased 28 percent last year, and U.S. sales growth was much higher than that," he says. "We continue to see a strong growth pattern in the U.S."

As LIS evolves from its heritage of a WMS provider to focus on SCE systems, it will take advantage of new markets. "We see our VirtualView product as being sold as a stand-alone system. It doesn't need to have any core WMS components to be an effective product for data interchange in supply chain communications," Carver says.

72 Optum

Real-time synchronization pioneers

As enterprises march to the tune of consumers demanding rapid deliveries, supply chain managers know that business-as-usual won't do. The buy-hold-ship distribution model, quickly becoming passé, has evolved into a sell-source-ship vehicle, whereby companies are leveraging supply chain management applications to replace inventory with information. White Plains, N.Y.-based Optum, a vendor of supply chain execution (SCE) software, is right in the thick of these e-fulfillment trends.

Building on 15 years' experience of providing warehouse management system (WMS) solutions, Optum now offers TradeStream to enable companies to establish virtual fulfillment networks beyond the enterprise's four walls. "Anytime you develop a new solution, it's more of a journey than a destination," says David Simbari, president and CEO. "It's been a very interesting journey for us."

"Buying and holding products in anticipation of an eventual sale has created a vast amount of inventory glut in the U.S. economy," says Simbari, citing a recent Morgan Stanley study that found that of the $1.4 trillion of inventory sitting in the U.S. economy, fully 40 percent is obsolete.

"Our solutions evolved out of the need to create a sell-source-ship scenario, which removes the excess costs inventory breeds by just sitting idle," notes Simbari. In this new paradigm, there is less need for a company to take physical ownership of goods. TradeStream enables companies to source orders across an extended trading community and drop-ship directly to customers or "merge centers" operated by third-party logistics providers.

"We were able to help Lucent bypass the central staging phase through real-time synchronization, which allows them to stage all shipments so that the delivery of all commodities is done direct to customers' sites," says Simbari.

Simbari says there are three levels in supply chain execution. "Inventory visibility is a very primal step—akin to a baby crawling," he says. Collaborative commerce is the next level, connecting trading partners. "Optum's solutions are at the third level, which is real-time supply chain synchronization that is extremely difficult to attain because the product has to have the ability to connect trading partners rapidly and cost effectively."

One of the challenges facing Optum is getting potential clients to understand the payback this solution offers. "Because TradeStream is such a revolutionary technology, there is a bit of evangelism involved," Simbari says.

74 Viewlocity

Managing change along the supply chain

In a world where vendors, suppliers, employees, and customers are strung together in extensive horizontal and vertical supply chains, Atlanta-based Viewlocity has focused in on supply chain event management (SCEM). This specialized supply chain functionality helps companies respond immediately to unplanned events along the extended supply chain. Viewlocity's Web-based SCEM tools allow companies to track inventory, orders, and shipments across an integrated supply chain in real time, as events occur. The technology also alerts companies to exceptions and takes corrective action based upon pre-established business rules.

"We developed Viewlocity's supply chain event management solutions to allow companies to have essential supply chain information at their fingertips at all times," says Viewlocity's CEO Greg Cronin.

XML (eXtensible markup language) and other open standards allow Viewlocity clients to leverage their existing technologies and receive synchronized, real-time information about all trading interactions. Through constant monitoring of the extended supply chain, Viewlocity's tools deliver notification of unexpected events. The system also supports corrective action based upon established business rules and applies intelligent decision execution to supply chain events.

Viewlocity partnered with Symbius Corp., of Boulder, Colo. this year to create consulting and development services for global enterprises. Symbius will contribute its strategic consulting and process expertise, while Viewlocity provides its supply chain technology. The resulting service will offer clients the technology, consulting, and management services needed to develop their supply chain tools.

Viewlocity also is continuing its pattern of partnering with native companies as it expands around the globe. These partnerships include moves into India and Sweden. Earlier this year, Viewlocity expanded its presence in Japan in partnership with Softbank Internet Technology Funds. Together, the two companies have launched Viewlocity Japan, which will make Viewlocity's supply chain tools available to Japanese companies. At the same time, Viewlocity and NTT Comware Corp., an IT solution arm of Nippon Telegraph and Telephone Corp., a Japanese systems integrator, formed an alliance to help Viewlocity Japan get established quickly.

Working with Custom Technology Corp., its Japanese partner, Viewlocity spent a year training local resources in its B2B integration foundation and SCEM tools. "This joint initiative should not be viewed as Viewlocity's initial flag-raising in Japan, but rather, it's the next stage in our Asia Pacific strategy," says Cronin. "For many industries, the region serves as the genesis of the global supply chain."

75 Click Commerce

Private trading exchange solutions fuel growth

Maybe the establishment of private trading exchanges truly is the next big thing. Although that phrase has been hyped to death by software vendors of virtually every sort, it's hard to argue with the numbers.

Last year, Click Commerce, a Chicago-based sell-side private trading exchange solutions vendor, reported revenue increases of 265 percent. On average, Click grew at approximately 40 percent sequentially each quarter during 2000.

A first quarter sales slowdown did not derail the Click Commerce express. The company reported first quarter 2001 revenues of $11.6 million, compared with $5.1 million for first quarter 2000. "The first quarter decline was disappointing, compared to the fourth quarter, but that's still relatively healthy year-over-year growth in a challenging market," says Michael Williams, a company vice president.

Williams says the Click Commerce solutions offers a flexible technology platform for e-commerce and channel partner collaboration. "This is a platform that helps them reach new channel partners and one that helps them get products to market much faster," he says.

Early adopters of the company's solutions are primarily Global 2000 manufacturers in chemical, automotive, and high-tech. "They are attracted to our solution because we provide everything from pre-sales and marketing solutions, through catalog content and order management, to post-sales activities such as field service and warranty management. This allows our users to collaborate with all their trading partners on these key business processes, says Williams."

Motorola, the Chicago-based electronics manufacturer, was among the first to adopt Click's applications. "Before implementing our solution, the cost of taking an order was approximately $42," Williams notes. "Now, the cost for processing the same order is approximately $14. Considering the many thousands of orders Motorola takes, that adds up to a significant cost savings."

The newest version of the company's flagship product is Click Commerce 4.2, released in June 2001. Two major enhancements included ClickPerformance, an analytics package that helps users evaluate channel performance against a dozen key performance indicators; and Click Forward, a tool for enabling integration to channel partners' enterprise systems.

77 Vastera

Ford win, Speedchain acquisition further its agenda

Vastera Chief Operating Officer Mark Ferrer isn't shy about touting his company's snagging of Ford Motor Co. as a customer last July. Vastera, the Dulles, Va.-based provider of global trade management solutions, is managing Ford's global customer operations. "It says our solution works for the second-largest global trading company," states Ferrer.

In fact, Ferrer sees brisk demand for managed services, which are somewhat analogous to an application service provider model. In Ford's case, Vastera manages the global trading operation. For other customers, exceptions encountered by the customer are forwarded to Vastera. Vastera then analyzes the exception, such as a trade documentation issue, and recommends a fix to the client.

Factors such as these are why Ferrer believes that Vastera "is continuing to move toward profitability." The company still posted a net loss of $35.8 million in 2000, but revenues soared 224 percent to $8.5 million in the first quarter of fiscal year 2001. New clients included GE Power and Subaru.

Vastera's solutions include its Global eContent repository of trade regulations, as well as TradeSphere Solutions, Trade Management Consulting, and Managed Services. In addition, Vastera also made a key acquisition recently when it bought Speedchain, a British global supply chain event management (SCEM) vendor. A greater SCEM capability enables Vastera to offer more visibility into the international movement of goods, as well as to address reception handling.

Ferrer promises new solutions aimed at preferential programs linked to trade agreements such as NAFTA and Mercosur in South America. "There are programs between the European Union and Mexico, and between Mexico and Japan, says Ferrer. Most countries don't take full advantage of these preferential programs because it's so complex to manage the information."

80 TECSYS

Dot-com market detour leads to updated functionality

TECSYS is trying to pluck roses from the bonfire of the tech stocks. Last year's meltdown hurt the Montreal-based provider of supply chain solutions, admits co-CEO Peter Brereton. In fact, it was a little over a year ago that the company decided to target dot-coms. "We believed that many were, in effect, going to ultimately become complete supply chain players," Brereton explains. "We put together a plan, an R&D [research & development] group, and a marketing effort to pursue them. And just as we got it wound up and rolling, the dot-coms imploded and we have, in essence, virtually shut down that effort."

This took its toll on the bottom line of TECSYS, which posted operating losses of $4.4 million in the second quarter of fiscal year 2001. Yet Brereton believes the investment in making applications for the dot-com market will eventually pay off with the company's traditional customers. "We have taken a lot of the work we did as part of that effort and have now embedded it into our core applications, so that our existing customer base of manufacturers and distributors can provide the kind of capabilities that the dot-coms were trying to provide."

TECSYS has beefed up the Web capabilities of its products, such as the FullStream and Elite.ecom series of e-commerce solutions. Enhanced real-time links between a customer's e-commerce Web site and its warehouse better reflect current inventory status on the warehouse floor. For example, a product damaged at the warehouse immediately affects product availability on the Web site. In addition, TECSYS recently released its Transportation Management System, which optimizes shipping via parcel carriers such as UPS and FedEx. "We are now integrating transportation systems right up to the Web site," says Brereton.

The strategy already seems to be paying some dividends. The TECSYS financial picture has improved somewhat, with operating losses narrowing to $1.1 million in the second quarter of fiscal year 2001. "We have turned the corner," Brereton says. "Decent revenue growth seems to be continuing from here. Not the 50 or 60 percent we were experiencing before 2000, but good, consistent revenue growth."

82 Provia Software

Emphasis on collaborative fulfillment

Product orders can't hide from this company. From the moment an order is created, Provia Software's supply chain execution (SCE) software track orders in real time and makes them visible throughout the delivery process. At least, that's the essence of the value proposition that the Grand Rapids, Mich.-based vendor says its applications provide.

Provia has "expanded its domain and capabilities into what we call a fulfillment collaboration software company, and we have two suites of products to support these capabilities," says Ken Lewis, president and CEO.

ViaWare is Provia's execution fulfillment suite, featuring warehouse management, yard management, small parcel shipping management, transportation management, and integration capabilities. Complementing ViaWare is ViaView, Provia's collaboration fulfillment suite, which offers visibility, event management, decision support, labor analysis, and workflow capabilities.

"ViaView interfaces with our own internal execution suite via the Web, e-mail, pager, fax, or XML [eXtensible markup language] documents," says Lewis. ViaView also interfaces with other SCE products or legacy systems.

Provia's recent focus has been on the Tier 1 space and the third-party logistics (3PL) market, each with varied logistics requirements. "Our diverse client base includes Tier 1 private warehousing clients like Gillette and Graybar Electric, and 3PL and contract warehousing companies such as Menlo Logistics and Ryder System," says Lewis. Provia also serves the Tier 2 3PL market.

Provia will continue to market in the Tier 1 space, while focusing on additional configuration tools for the Tier 2 space, which is a larger market. "These products will enable them to implement and enjoy the same applications that our Tier 1 clients," says Lewis.

Looking forward, Lewis notes that one of Provia's true technological advantages will lie in the company's choice to port its Tier 1-oriented, UNIX-based warehouse management system to the Windows NT/2000 platform. A global single-source code will enable multiple-platform implementations.

Equipped with a direct sales force in North America supported by regional teams, Provia also reports strong sales in South America and Australia. "Our number one asset is that we keep our commitments and deliver on-time and within budget," says Lewis. "Also, 98 percent of our clients have 24/7 support contracts with us, which is highly unusual in our space."

85 Ability

An e-fulfillment and inventory optimization specialist

Atlanta-based Ability is so-named, according to top executives, because its e-fulfillment and inventory optimization software helps distribution organizations and light manufacturers fulfill demand to their best and most profitable ability. "For manufacturing enterprises that distribute, our inventory optimization solution allows them to have inventory at the right place when they need it," says Jim Byrnes, president of Ability North America.

Ability offers two products: Ability e-Commerce Fulfillment, called eCF for short; and Ability Inventory Optimization, or IO. "Ability eCF is a distribution management solution that provides e-commerce capability, order fulfillment, inventory management, procurement, job costing, and back-office functionality," says Byrnes. "IO is a supply chain optimization tool that allows companies—primarily build- or buy-to-stock—to reduce their inventory holdings and enhance their customer service. This solution is compatible with most existing enterprise resources planning systems, and can be fully integrated with eCF."

While Ability's core target market is distributors, it also targets the distribution arms of manufacturing enterprises, and counts Dunlop Tires, a tire manufacturer; Haggie Rand, which makes cable and wire products; and Mondi, a paper manufacturer, as customers.

"Our IO solution also can manage raw materials inventory to ensure production occurs on schedule," says Byrnes. "Additionally it can manage inventory used in the maintenance and repair of equipment."

The IO solution uses neural network technology to optimize inventory management around customer service goals. "The IO product has a highly advanced forecasting engine, that allows dramatic increases in customer service levels and inventory turns," says Byrnes. "The neural network monitors and recalculates stocking levels based on actual variability. Armed with IO, a company's buyers are better equipped to focus on SKUs [stock-keeping units] that bring the most value to the business, while letting the system handle the low-margin ones."

Ability specializes in mid-market-oriented solutions. Its target market is wholesale distributors, build-to-stock, or light manufacturing companies with annual revenues of between $50 million and $750 million.

89 Apriso

International expansion accelerates growth

What software industry downturn? Apriso, formerly CIM Vision International, closed Year 2000 with revenues up nearly 30 percent. The Long Beach, Calif.-based provider of order fulfillment, plant, and warehouse solutions started this year even stronger.

"We're very pleased to be bucking the trend in this industry," says Nelson Nones, director of global marketing. "For the first quarter of 2001, we reported an 83 percent growth rate over the first quarter of last year. The key reason for that growth is our international expansion; we now have offices in North America, South America, Europe, Australia, and Asia. This global coverage is one reason Microsoft selected us for a project that involves nearly 80 implementations in 23 countries."

The company began its international expansion midway through 1999 and completed phase one approximately one year later. That's fast for a relatively small company with an 11-year history focused primarily on the North American market. Indeed, fast is an underlying theme of the new Apriso story—starting with the new company name. Apriso is a take-off on the Spanish word "aprisa," meaning fast.

Over the last year, the company introduced five releases of its flagship CIM+ product, starting with release 5.5 and ending with release 6.3. Perhaps the most significant, to Apriso's global prospects, took place last July. "We introduced a multilingual version of the product that supports English, French, German, Portuguese, and Spanish," he says. "Our CIM+ product also handles multiple date systems and time zones to support operations for Global 5000 customers."

Next up on the Apriso fast-track release cycle is a solution going by the tagline "Work Anywhere." According to Nones, "This is basically MES [manufacturing execution system], plus workflow, plus wireless, plus full B2B [business-to-business] functionality, all integrated into a single application set." "The key benefit is that this greatly facilitates the execution of orders that arrive electronically. Now the execution system begins the order fulfillment process, while simultaneously updating the back-office system. This eliminates the typical delay where an order sits in queue, pending a new plan. As a result, the delivery process goes much faster."

94 High Jump Software

Solutions' versatility is key ingredient to success

With 12 new customer wins in the first quarter of 2001, High Jump Software is particularly upbeat about the state of affairs in the supply chain execution (SCE) space. The Eden Prairie, Minn.-based company also is very confident about the strength of its solutions in a time rife with dramatic change.

"We've seen strong growth of our product because it is adaptable enough to deal with constant change," says Chris Heim, president and CEO. "Since most companies don't know what their businesses will be like a year from now, they need to have systems that are flexible. Competition is fierce in today's economy, so those that can respond the fastest and differentiate themselves with customer service have the best chance for success."

Over the past few years, High Jump has made a gradual, but effective, transition into the SCE space. Last year's name change from Data Collection Systems seemed to solidify its evolution from a provider of data collection applications to one of a mid-market SCE player.

Since then, High Jump has concentrated on developing ancillary SCE solutions built around its warehouse management system (WMS). These include transportation, order management, and fulfillment applications such as event management and visibility tools.

The company also concentrates on flexible applications that allow easier adaptation to changing business processes, says Heim. "When we surveyed prospects about supply chain systems, the software itself received positive comments, but the costs involved are what most respondents indicated as their biggest pain point," he says. "Most said they could not afford the price of the changes that are necessary.

"Our users are feeling pressure from their customers regarding new requirements they must meet," Heim continues. "They can be rather demanding by asking for exact delivery days and times, or very specific packaging or labels. If the process of changing the WMS system to meet these requirements was difficult or time-consuming, we would have very unhappy users."

Heim believes the area of functionality to watch in the SCE arena is supply chain visibility and event management. "These two capabilities quickly are becoming must-haves, and we have seen huge growth in these areas with our applications."