Supply Chain as Strong as Its Weakest Link
After installing expensive supply chain optimization software from big-name vendors, some companies are turning to niche development efforts to get full use of those investments.
Startups Apexon Inc. and SupplyWorks Inc. are working to fill out specific aspects of the supply chain with upcoming software releases, while the more established vendor SAP AG is beta testing its own extended supply chain application.
Supply chain optimization software enables faster or more efficient production by connecting the systems of manufacturers with the companies that provide materials used in production.
Apexon, of San Jose, Calif., will announce at midmonth its Collaborative Issue Resolution software which helps discrete manufacturers with a supplier optimization plan already in place to further manage outsourced projects by catching glitches in supply chain operations.
Realizing there is a big difference between what is planned and what actually occurs along the supply chain on a day-to-day basis, 6-month-old Apexon developed CIR to identify problems along the supply chain in areas such as planning, parts quality or inventory levels.
Once it detects an error, the CIR suite alerts key individuals of the situation. A separate feature investigates and analyzes the glitch to offer potential fixes. Additionally, the CIR suite has Supplier Performance Metric, which gives manufacturers the ability to analyze how well suppliers are performing.
Apexon said it plans to expand the breadth of CIR to include a production-to-procurement moduleunder development nowas well as a logistics module that sits on top of an existing logistics platform to generate what-if scenarios. The company also plans to introduce a product introduction module to the supplier base in the next quarter.
Honeywell International Inc. is implementing Apexons CIR solution in conjunction with its U.S., Canadian and Mexican suppliers. The manufacturer plans to roll it out to European suppliers next year. While Honeywell already has supply chain software that does planning and procurement, as well as an underlying SAP ERP (enterprise resource planning) system, Worldwide Vice President of Supplier Relations Jerry Rockstroh found he needed additional software to manage day-to-day operations. After a comprehensive look at solutions offered by such vendors as SAP, Commerce One Inc., Ariba Inc. and i2 Technologies Inc., Rockstroh went to Apexon for a less comprehensive but more cost-effective solution.
"We happen to work in an environment where there is a lot of vitality and a lot of aftermarket products," said Rockstroh, in Morristown, N.J. "[Our current supply chain software does] a lot of forecasting models, but they are still models. We still have to respond to customers drop-in orders, and we have to be able to respond quickly."
Rockstroh said Apexon beat out the more established competitors because it understands the need for quick response time and quick production time. A system from SAP, for example, was too complex for Honeywells needs, he said.
"Its great, but its extremely complex, and you need an IT team to support it," Rockstroh said.
SupplyWorks, for its part, is working on the supplier relationship management end of the supply chain. The Bedford, Mass., developer is teaming up with Ingersoll-Rand Co. and Roberson Transportation Inc., of Champlain, Ill., to offer 21st Supplier, a hosted solution available later this year. The product will extend manufacturers SCM (supply chain management) beyond the top 20 suppliers that are traditionally integrated into an SCM optimization plan.
SupplyWorks currently offers SupplyWorks Max, a module for discrete manufacturers that manages the flow of parts and materials into a plant, as well as relationships with the suppliers of those components.
Developers of traditional supply chain event management software focus only on the execution layer as an add-on to existing ERP suites, according to Jeff Herrmann, president and CEO of SupplyWorks.
What SupplyWorks does is integrate execution with collaboration, allowing manufacturers and suppliers to communicate in real time during the planning and execution phases of product manufacturing and delivery using beefed-up instant messaging that catalogs and archives interactions.
Ingersoll-Rand, of Woodcliff Lake, N.J., is stepping in with its engineering knowledge base to provide a hosted solution that combines SupplyWorks functionality with Robersons logistics capabilities.
"No one is looking at the lower tier. Its the slop that no one wants," said Bill Lindquist, business unit leader at Ingersoll-Rand. "A lot of people will do several of the functions, but no one does it all."
The idea behind the 21st Supplier service is to provide everything that a customers sourcing platform would providefrom new product development and ordering to expediting and transportation. At the same time, it makes the offering palatable to the supplier base that a manufacturer hasnt had the time, money or capabilities to integrate into a supply chain plan, according to Lindquist.
Meanwhile, SAP is playing catch-up with the niche vendors in offering applications that extend the life span of supply chain optimization. The Walldorf, Germany, company, which already offers a range of SCM applications, is beta testing its Event Manager, which will do just that. Event Manager, due for release in the third quarter of next year, is modeled after software SAP developed for Colgate-Palmolive Co. that tracks tendering of each outgoing shipment and the delivery process of each shipment. SAP added functionality that includes the ability to acquire data from SAP and third-party systems, compile and analyze data, and communicate alerts to a whole business community.
Event Manager has a generic engine that allows customers to track or manage a number of SCM processes.