Agile Tackles Product Chain Management

Outlines PCM strategy, unveils sourcing solutions

San Jose, CA  October 22, 2002  Agile Software today laid out its vision for product lifecycle management and offered up new solutions to back up the company's strategy, including a software suite for strategic sourcing and an improvement suite that links engineering and manufacturing operations with sales and service functions within an enterprise.

Agile says that, while customer relationship management (CRM) systems manage customer interactions and enterprise resource planning (ERP) systems manage companies' transactions (financials, order management, manufacturing planning and control), its new product chain management (PCM) solutions allow companies to manage their products during what it calls the "profit cycle."

The solution provider is dividing its PCM solutions into three areas: product collaboration, product sourcing, and product service and improvement. Each area contains a number of applications.

For example, product collaboration, with six different solutions, enables communication and collaboration internally and with supplier networks about new or changing product information, potentially leading to reduced scrap and rework, decreased costs, faster product development and quicker product changes. Agile says its solutions provide design and manufacturing teams, whether within an enterprise or at outsourced manufacturing partners, with access to the most up-to-date product information.

The new product-sourcing suite comprises three solutions for strategic sourcing and cost management of direct materials. Agile says the suite enables reductions in cost of goods sold (COGS) by allowing manufacturers to aggregate their purchases of commodities across product lines and then work with their supply bases to find cheaper, alternate parts and to manage future costs. The sourcing suite also offers the promise of controlling design costs by providing a view into product content information  what Agile calls product chain DNA  helping companies avoid buying mistakes, design for manufacturability, and reduce product-design and time-to-market cycles.

Commenting on the sourcing suite, Chris Kanning, manager for global supply chain planning at Compaq Computer Corporation, said: Agile's sourcing solutions will help streamline our RFQ [request for quote] and cost-control processes, and allow us to collaborate more effectively, with our initial set of 66 alliance partners. The streamlined processes achieved through the use of these solutions will help us recoup and prevent the costs [that] we, and our suppliers, experience today through incorrect costing and resulting audit activity. We expect those cost savings to be significant.

"Agile is headed in an important direction with its Product Sourcing suite," said Tim Minahan, vice president for supply chain research at technology research consultancy Aberdeen Group. "Product Sourcing builds on Agile's strength in managing product definitions and changes. In addition, Product Sourcing's focus is on direct materials, which contribute to about 70 percent of a product's cost. Agile's multi-tier sourcing capability enables greater speed and flexibility in the supply chain, and the Agile solution's single-system-of-record concept provides a single point of contact for all purchasers to make more informed buying decisions."

The to-be-released product service and improvement suite includes two solutions  corrective action support and service support modules  that Agile says will be available in the first quarter of 2002. According to the solution provider, field and support personnel can use this software to provide input directly to engineering and manufacturing organizations based on customer interactions, giving engineering staff an understanding of product performance and the ability to respond directly to customer issues such as product defects or enhancement requests. The suite also delivers product data to a company's service organization to improve troubleshooting and problem resolution. Agile asserts that the integration of engineering and manufacturing operations with sales and service functions facilitates the product improvement process and allows manufacturers to address more effectively dynamic market requirements.

"The completeness of the product-chain management approach  linking manufacturing, engineering, purchasing, suppliers, service organizations and others  is a critical next step for companies faced with managing their products through ever-shorter profit cycles," said David Yockelson, vice president and director at research firm META Group. "Leveraging its expertise in managing product content, Agile's new sourcing solutions enable organizations to streamline sourcing processes and leverage relationships with existing suppliers to increase profitability and cost management."

Vin Melvin, chief information officer at Agile customer SCI, said: "Delivering quality products on time to our customers is a competitive differentiator for SCI. Agile's new capabilities should extend visibility to areas as diverse as customer service, product management, procurement, business management, engineering and operations. I believe the visibility to vital product information at key decision points in the supply chain and operations will enable better decision-making, increased business efficiency, improved product cost management, and overall customer service and success."

"In this economic climate, in which being the lowest-cost producer or offering the newest, most innovative product-or both-is required to retain customers and take market share, managing the product chain has never been more crucial," said Bryan Stolle, CEO and chairman of Agile.