The Analyst Corner: Fulfillment & Logistics

With globalization, RFID mandates and a host of other concerns looming large for corporations of all sizes, this market is starting to hit its stride.


"For example, improving order-to-cash and deliver-on-promise dates touches multiple organizations (e.g., manufacturer, third-party logistics, carriers, customers) with pieces of the process controlled by different organizations at different points in the process," Klappich says. "Information flows between systems and pieces of the process will be owned and executed by different systems at different points. For example, an order transaction might be taken in a company's ERP system, handed off to a third-party logistics provider's warehouse management system for fulfillment, and handed off again to a carrier for delivery and then payment authorization comes from the customer's receiving and accounting systems. As evidenced by this example, focusing inside the enterprise (i.e., ERP) would address only a small fraction of the process, and the greater value would come by looking across the extended supply chain."

Finally, Tohamy discusses a more sophisticated attempt at multi-channel fulfillment in the retail sector and its logistics needs. A solid and recognizable player in the multi-channel environment is Escalate. "In 1998 to 1999, when people talked about multi-channel fulfillment they usually meant offering an e-commerce channel alone or in addition to their store channels," she explains. "This year there are more and more firms looking at the different business units that manage stores and direct (catalog) and e-commerce, and, in doing so, they are trying to build one view of customers' needs as well as one view of inventory across all channels. This will result in a better customer experience as well as better inventory visibility and management. The best examples here are Best Buy and Home Depot."

Players in the Market Today

Tohamy of Forrester Research, The Yankee Group's Dominy and META Group's Klappich give clear insights into the current group of fulfillment and logistics enablers. The pervasive commentary from all of them was that there is continued consolidation; it's safe to say that what you see today in the market may not be what you see in just six months.

But let's begin with the big guys. According to the analysts, while SAP shows somewhat of a market lead in RFID, other data is beginning to reveal that IBM, Microsoft and Oracle are becoming preferred RFID providers.

Some caution must be identified, however, regarding the major players' efforts in the fulfillment and logistics arena. As it relates to The Yankee Group's "extended SCM," the ERP enablers are behind in the areas of planning and execution. The continued struggle ERP providers often have with delivering scalable solutions beyond the edges of the enterprise only serves to help best-of-breed enablers steal new license revenue from the ERP customer base.

According to The Yankee Group, among the ERP providers, SAP with its NetWeaver and xApps strategy, is best positioned to deliver extended SCM solutions. Oracle's extended SCM capabilities have been limited to a handful of industries with specific requirements.

News abounds, though, for the two most traditional players in this space, i2 and Manugistics. With cash infusions earlier this year and a solution linking planning and execution for a closed-loop supply chain offering, i2 deepened its strategic alliance with IBM through a partnership to deliver supply chain solutions built on IBM's on-demand operating environment. This effort, in part, aims to fortify i2's customer base with new clients and launch a competitive offense against the major ERP players.

Manugistics' big story is the appointment of Joe Cowan as its new CEO this last July, replacing Greg Owens, who remains chairman of Maniugistic's board. Given Cowan's most recent success in selling the ailing EXE to consolidator SSA Global, Forrester's Tohamy suggests "his appointment has left investors wondering about Manugistics' prospects to grow organically as an independent software vendor."

But Cowan's recent visit with Tohamy gives the market a picture of his strategy for Manugistics. He said he plans to leverage the software provider's three key strengths: customer service, employee satisfaction, and research and development capabilities.

Says The Yankee Group's Dominy: "i2 and Manugistics are both definitely moving further into execution, with Manugistics better positioned from a brand and channel perspective."

All the analysts agree that the planning and execution aspects of fulfillment and logistics will become more tightly integrated as enterprises push to accelerate information, financial and inventory flows across the global, extended and networked supply chain.

According to The Yankee Group, best-of-breed planning enablers that have moved their applications to J2EE architectures benefit from the advanced planning and execution trend. Enterprises that are serious about collaborative planning must select and implement applications from enablers such as Manugistics, Adexa, Syncra Systems and Logility.

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