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    Home Latest News

      Large Supply Chain Vendors Scaling Back

      By
      Renee Boucher Ferguson
      -
      July 22, 2002
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        Enterprises looking to automate their supply chains may be forced to tap several smaller developers, as the major software makers that once promised end-to-end supply chain software cut back on development.

        Supply chain software providers i2 Technologies Inc., SAP AG and Manugistics Group Inc. each reported gloomy financial news last week and scaled back development efforts as a result. Meanwhile, smaller, nimbler best-of-breed developers, such as SupplyWorks Inc. and Frictionless Commerce Inc., continued to roll out product updates.

        i2, in the wake of a $757 million second-quarter loss, last week said it will cut its work force by 30 percent, drop or scale back on some products, and rework others into tool kits. Sources familiar with the Dallas-based companys plans said that they would cut back on i2s support for certain hardware and middleware, as well as remove product overlap. The Distributed Order Management software will be offered as a tool kit.

        The reworked tool kits will provide supply chain planning and integration capabilities.

        i2 looks to move away from its dependency on ERP (enterprise resource planning) systems, officials said. Working with customers, i2 is building a repository to house supply chain data not found in ERP systems. Officials would not give a due date for the project.

        Meanwhile, SAP, based in Walldorf, Germany, saw de- mand for its supply chain management software drop by nearly one-third last quarter. It announced last week that it will not drastically cut jobs but will reduce head count through attrition and scale back on unspecified projects.

        Separately, Manugistics, which saw quarterly revenue decrease 19 percent from last year, will release Version 7.1 of its namesake supply chain management suite at years end. It will provide an integrated business process management engine that will enable multiuser collaboration around supply chain execution processes, including order fulfillment and resolution, said officials in Rockville, Md.

        Smaller developers, on the other hand, have changed little in their development plans. SupplyWorks, for example, this month will release an enhanced version of its SupplyWorks Max supplier relationship management solution. The upgrade features a vendor-managed inventory capability that lowers overall inventory in the supply chain by enhancing collaboration among manufacturers and their suppliers, according to officials in Bedford, Mass.

        Frictionless Commerce, of Cambridge, Mass., last week rolled out its Frictionless Sourcing Optimizer, which enables purchasing managers to weigh the trade-offs among supplier bids and internal requirements and constraints.

        Some IT organizations looking for more supply chain software are waiting for the major developers, and others are opting for best-of-breed vendors. After deploying software from SAP and i2, Scott Hicar, CIO at Maxtor Corp., will implement two smaller systems and custom-code others.

        “There is a calm point right now in terms of major supply chain spending,” said Hicar, in Longmont, Colo. “People are looking at what investments they made, and it takes time to really get a return on investment.”

        Renee Boucher Ferguson

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