Orlando, FL July 18, 2001 Manugistics unveiled the latest iteration of its supply chain software suite at its users conference here this week, touting the new additions to the company's line-up: supplier relationship management, and pricing and revenue optimization solutions.
The company also used the occasion to highlight alliances with fellow software providers Converge, Frictionless Commerce and PartMiner.
Manugistics' suite is as much about vision as it is about software, a fact reflected in the name of the conference, enVISION2001. The concept, dubbed enterprise profit optimization (EPO), combines Manugistics' traditional supply chain optimization software with sell-side capabilities and buy-side functionality. Manugistics asserts that companies can use this convergence of sell and buy sides to maximize margins as well as revenues across a supply chain.
On the sell side, the company highlighted its pricing and revenue optimization (PRO) software, which Manugistics acquired along with its purchase late last year of Talus Solutions. The PRO offering includes:
Target Pricing, software that Manugistics says can enable a company to customize the price of bundles of products and services offered to individual customers in direct sales and competitive bidding situations; Precision Pricing, which can establish, update and optimize list prices by market segment; and Promotions, which can optimize the allocation of marketing and promotional expenditure across products, channels and customer market segments to help maximize return on marketing investment.
The idea behind this solution set is to apply more broadly and in new markets the same types of revenue optimization algorithms that the airline and hospitality industries use to price airplane seats and hotel rooms. The upshot, Manugistics says, is that a company will be able, for example, to respond to its customers' requests for proposals more quickly and with pricing that better reflects the company's capacity and costs and that results in higher margins.
Manugistics also is planning to acquire some order-management capabilities from the now-defunct SpaceWorks, a sell-side software provider that went belly up earlier this year. Conveniently and perhaps not coincidentally SpaceWorks was headquartered in Rockville, Md., Manugistics' own hometown.
Back to the Buy Side
Over on the buy side, Manugistics unveiled its software for supplier relationship management (SRM), which in Manugistics' definition includes strategic sourcing, contract manufacturing management and materials management.
SRM is the latest frontier for B2B software providers, promising further incremental efficiency gains to augment the benefits already achieved through the implementation of enterprise resource planning (ERP) and supply chain management (SCM) systems within organizations. Just last week, technology consultancy Gartner reported in a research note, "When integrated with supply chain management and ERP systems, comprehensive SRM software will result in more-efficient transaction execution, better information flow through the organization and more timely and accurate information for decision support, especially for centralized purchasing organizations."
Manugistics' SRM applications include a mix of acquired functionality and homegrown capabilities. For strategic sourcing, the SRM solutions include some functionality taken on from PartMiner, an online marketplace for electronics components. Manugistics is using PartMiner CSD, renamed Components Management, to allow companies to aggregate data from across their enterprises about the components they use, allowing purchasing and design departments to work off the same database of components. Manugistics claims that experience working with clients such as Sony and TRW has shown companies can save from 3 percent to 6 percent on their direct spend by using this type of solution to constrain the variety of components they purchase and to get better volume pricing from preferred suppliers.
Manugistics also announced at enVISION that it will resell, market and distribute subscriptions to the PartMiner' parts database, which covers 2,000-plus manufacturers and more than 15 million part numbers. Clients who sign up to use the service will be able to access and query the component information database for referencing electronic component part numbers, product information, cross-references, end of life information, application notes and datasheets. Design engineers and purchasing professionals could use the database, for example, in the selection of components for board-level design, as well as for validating part numbers for bill of materials (BOM) procurement and finding replacement parts.
Elsewhere on the buy side, Manugistics and e-sourcing solutions provider Frictionless Commerce announced that the former will market and sell Frictionless' strategic sourcing software platform. Under the deal, Manugistics' customers will be able to use the Frictionless software to perform detailed spend analyses as a prolog to selecting suppliers and as a tool for managing ongoing relationships with suppliers. The goal is to help companies achieve cost savings for their direct and indirect material purchases.
Commenting on the Manugistics-Frictionless pairing, Tim Minahan, vice president of technology consultancy Aberdeen Group's supply chain research practice, said: "This should be an extremely valuable pairing for both companies, as well as their clients. Frictionless gives Manugistics the e-sourcing capabilities it needs to emerge as a major competitor in the SRM space. Manugistics provides Frictionless with significant sales channel support, and immediate access to a global base of customers and vertical markets. Together, Manugistics and Frictionless can offer customers a solution for automating and managing all aspects of supply chain relationships from initial planning and sourcing through transaction management and analysis."
For the future, Manugistics' senior vice president for technology strategy, Lori Mitchell-Keller, said that the company is looking at "morphing" the sell-side technology it planned to acquire from SpaceWorks into buy-side purchasing management and execution software.
Integrated or Otherwise
In a statement released at enVISION, Manugistics chairman and CEO Greg Owens emphasized the integrated nature of the company's offering, tying the buy and sell sides together across an organization. "We have seen increasing customer requests for fully integrated supply-demand solutions to drive both top-line growth and bottom-line margin enhancement," Owens said.
At the same time, in acronym-laced conversations at the event, Manugistics executives noted that while the company is offering its SRM-SCM-PRO suite as a "fully integrated EPO solution," clients could opt to purchase one or several components of the suite, such as a solution for gaining greater visibility into inventory or software to analyze an enterprise's spend, and then add further components over time.
The Converge Deal
Finally, in conjunction with the enVISION conference, Converge, an e-marketplace for the high-tech industry, announced that it had selected Manugustics to power its ConvergePlan offering, a service that enables the marketplace's members to aggregate, interpret and respond to supply and demand signals.
By incorporating Manugistics' collaborative solutions, ConvergePlan will provide its users with a common view of supply and demand information, exception management and alerting capabilities, as well as centralized performance analysis.
"Manugistics demonstrated to us that it has the right combination of proven supply chain management technology, deep communications and high technology domain expertise and commitment to our strategic objectives," said Bob Lewis, CEO of Converge, in announcing the deal. "By leveraging their solutions, our ConvergePlan offering will enable our customers to increase supply chain visibility, improve inventory planning and forecasting and better resolve inventory excesses or shortages, all through a single, standard Web-based view."