The View from enVISION2002

New upgrade, acquisition and customer for Manugistics - and Jack Welch to boot

San Diego, CA  May 9, 2002  A new solution upgrade, a new acquisition and a new customer announcement were the intended highlights at e-business software provider Manugistics' user conference in San Diego this week, but a pair of wisecracking CEOs, including Jack Welch and Scott McNealy, did their best to steal the show.

At the enVISION2002 show, "Manu" unveiled version 7.0 of its flagship supply chain planning and execution solution, adding features intended to help organizations and their extended trading networks better integrate their operations and to provide visibility and control throughout the supply-demand chain.

Manugistics is positioning Version 7.0, due on the market at the end of May, as the engine for driving "enterprise profit optimization," a corporate strategy for enhancing margins by lowering costs and improving revenues across a company's supply and demand networks. The solution includes components for supplier relationship management, supply chain management, and pricing and revenue optimization, as well as a new component for service and parts management added following Manu's acquisition of Western Data Systems, also announced at enVISION.

The componentized nature of the solution means that a company can start with one set of functionality  say, demand forecasting or transportation  and then add further functionality over time. The emphasis on componentization has come as the tight economy has prompted companies to look for point solutions to address particular business pains versus the full-scale platform implementations that they might have gone for 18 to 24 months ago at the height of the dot-com boom.

Manu's key message for 7.0 is twofold: it represents, the company says, the marriage of planning and execution, and of the demand side and supply sides of a company's business.

With the solution, says Chris Caren, vice president of solutions marketing at Manugistics, "planning becomes almost a continuous function, where you plan operations, you execute against the plan, you monitor activities and you replan as necessary based on market conditions. So planning comes down from a high-level, periodic activity to a real-world, continuous activity, married with execution." The acceleration of the planning and execution cycle should help companies adjust their operations on the fly to minimize their exposure to market fluctuations and maximize profits and revenues over time, Caren said.

The solution provider is also positioning its offering as the link between the buy and sell sides of an organization, with the price and revenue optimization components helping companies drive up their top lines, while the supply chain components address the cost side of the business. "It's optimizing on the supply side and on the demand side simultaneously," explained Manugistics CEO Greg Owens.

With the acquisition of privately held Western Data Systems, Manugistics gains that company's solutions for optimizing complex service and parts management processes in asset-intensive organizations. Terms of the deal were not announced, but WDS had 2001 revenues of $28 million. The company has a customer base of about 135 organizations, with 33,000 users worldwide, particularly in the aerospace and defense sector and government.

WDS' offerings include CompassENTERPRISE for Original Equipment Manufacturers (OEMs), a solution that provides project or contract-oriented capabilities to discrete manufacturing clients who need to improve operating performance with commercial best practices while maintaining mandatory regulatory compliance, control and reporting; CompassENTERPRISE for MRO, a repair and overhaul operations management and accounting system for commercial and military MRO facilities; and Buying Advantage, a procurement system designed expressly for direct material acquisition.

Manugistics intends to combine what it describes as WDS' tactical approach to service and parts management with Manu's traditional planning and optimization capabilities. The acquisition extends Manugistics' reach into an additional segment of the supply chain  maintenance, repair and operations (MRO)  while also giving the solution provider access to WDS' installed customer base, which includes such banner clients as BAE Systems, Boeing, Lockheed Martin, Northrop Grumman and Sikorsky.

Caren said that the application programming interfaces (APIs) that Manugistics had built to integrate its solution with ERP systems were "80 percent" applicable to integration with the WDS solution. Manugistics plans to have the WDS solution fully integrated with version 7.1 of its own solution, due out in December.

Intriguingly, Manugistics executives also said that their vision for the company's future solutions framework features a product lifecycle management layer that would include a collaborative product design component, most likely to be added by way of the acquisition of one of the current collaborative design solution providers. None of the Manugistics executives at the show was talking about who the potential acquiree might be, although Lori Mitchell-Keller, the company's senior vice president for strategy, suggested that an announcement could be forthcoming in as soon as six to eight weeks.

Elsewhere at enVISION, Manu announced that BMW Group has tapped Manugistics' global logistics management solution to help the automaker optimize its global inbound and outbound distribution and collection network. Using the solution, BMW hopes to facilitate planning processes that will optimize the transportation network from suppliers to plants, out to the dealers, while helping reduce transportation costs.

In 2001, the BMW Group produced more than 940,000 cars. Global network planners located at the BMW's European headquarters in Munich will use the Manugistics solution to analyze costs, capacity, time, service and other variables associated with planning the global network, with the goal of selecting the optimum supply chain configuration for its distribution and transportation centers and to identify better transportation routes. The solution will also enable the planners to centrally manage BMW's inbound and outbound freight movements across multiple modes of transportation, perform "what-if" simulations and analyze carrier performance.

During his address at the show, Manugistics CEO Greg Owens urged attendees to consider investing in software now as a way to get ahead of the competition, with Manu pledging, for its part, to help companies achieve in 2002 a return on supply chain investments made this year. Owens urged companies to look to the long term rather than focusing on the immediate economic difficulties. "It's a marathon, not a sprint," he said, adding, "The long-term focus will prevail."

Perhaps the highlights of the show came with the keynote addresses by former General Electric CEO Jack Welch and current Sun Microsystems honcho Scott McNealy.

McNealy kept the crowd in stitches during much of his 45-minutes speech, which doubled as a stand-up comedy routine with his constant references to "dot-Not" (a dig at Microsoft's competing .Net, or "dot-Net," e-business platform) and other malapropisms.

For his part, Welch seconded Owen's call for companies to invest now to beat their competition. Welch also drew the loudest laugh at the show with response to a question from Owens during a question-answer session. When Owens asked for Welch's view of the whole vision that Manugistics is promoting, Welch said, without missing a beat, "If even half of this stuff works, it's going to be a home run."