Global Logistics and Supply Chain Strategies - July 2008 - (Page 12)

RedPrairie Sees Rise in Hosted Apps, Big Demand for Execution-Based Software in Europe For all the talk of software as a service (SaaS), only about 30 percent of base applications for the supply chain are currently available in that mode, according to R. Michael Mayoras, chief executive officer of RedPrairie Corp. But that’s about to change. Within the next three to 10 years, he said, most apps will be hosted over the internet as Web services, eliminating the need for software installations and updates on the user’s premises. Speaking to reporters and analysts at RedPrairie’s recent RedShift 2008 user conference in Miami, Fla., Mayoras described some additional changes that have taken place in the supply chain software sector over the past five years. For one, he is seeing heavy demand for transportation and warehouse management tools in Europe. To his surprise, the popularity of labor management apps is picking up there as well, driven perhaps by Europe’s traditionally union-oriented culture. On the warehouse management side in particular, RedPrairie is experiencing “a healthy refresh cycle” among customers who last bought systems in smaller number of enterprise vendors. Speaking as the CEO of a best-of-breed provider, he claimed that supply chain processes operate under “a different dynamic” than enterprise-style systems. In any case, a number of RedPrairie customers—Mayoras cited toolmaker The Stanley Works as one—successfully deploy the company’s specialized software alongside traditional enterprise resource planning packages, such as those offered by software giant SAP AG. RedPrairie has also been competing “head to head” with SAP for the business of top consumer-goods and food producers, he said. Visit www.redprairie.com. ‘Fast Fashion’ Refers to More Than Clothing and Cell Phones, Says JDA Exec Buyers of clothing and certain consumer-electronics items are accustomed to seeing their models of choice disappear from store shelves shortly after purchase. For fashion-conscious consumers, there’s always a new design in the pipeline. But the concept of “fast fashion” is now making itself felt in other areas, according to David Johnston, senior vice president of supply chain with JDA Software Group, Inc. Among the items experiencing shorter life cycles are home building accessories such as drawer knobs and bathroom hardware. Against that backdrop, JDA is working on planning applications that will help manufacturers keep up with the faster pace of change. Another big trend, according to Johnston, is retailers’ growing dependence on generic and private-label merchandise, which is touted as a lower-cost alternative to traditional brands. Of course, someone has to make those goods, and private labels represent “their only growth route” for many manufacturers. As if that weren’t enough, manufacturers and retailers alike are forced to become more efficient in order to meet new “green” initiatives and offset the crushing impact of rising fuel costs. All of these factors have caused companies to take another look at supply chain optimization software, offering tools for strategic network design, Johnston says. In the process, they ask key questions about the best locations for manufacturing plants and distribution facilities, while reducing their overall impact on greenhouse gas emissions. Such efforts can only succeed, however, if they take place at a high enough level in the organization, and across multiple disciplines. Otherwise, companies are in danger of “sub-optimizing” their supply chains, as they field separate teams for managing demand forecasts, distribution strategies and production plans. Johnston stresses the importance of constant feedback among various departments, so that a company can determine, for example, the the 1990s, in the run-up to the year 2000, and are now looking for new ones that can address the growing complexity of distribution. “People are coming back to the well,” Mayoras said. One question of critical importance to supply chain software vendors is the identity of the executive making key purchasing decisions. In many companies, managers within the lines of business vie for power with those in charge of overall information technology. The former, concerned about depth of functionality, often will favor “best-of-breed” software packages, while the latter tend to gravitate toward larger, “enterprise” vendors which offer a broader menu of applications with fewer features. “We hope it’s the line-of-business” making the calls, Mayoras said, although he sees increasing pressure from chief information officers to rely on a 14 JULY 2008 http://www.redprairie.com

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Global Logistics and Supply Chain Strategies - July 2008 Contents Editorial GL&SCS Exclusive Fastforward Up Front Introduction Menlo Worldwide & Electrolux PathGuide Technologies & Tile City Servigistics & Juniper Networks Transplace & Rock-Tenn ClearOrbit & Blue Bell Creameries Cadec Global & Northwest Food Products Transportation CaseStack & Greystar Products NGC & Parigi Group Supply Chain Consultants & Constar TransGroup Worldwide & Surgiquip Terra Technology & Campbell Soup Baxter Planning Systems & SGI Cadre Technologies & Kansas City SmartPort TransportGistics & FMC Technologies DSC Logistics & Tree of Life FORTE & Vera Bradley Penske Logistics & Eaton Cardinal Logistics & Weyerhaeuser JPMorgan & Black & Decker Opinion Opinion Industry Voices

Global Logistics and Supply Chain Strategies - July 2008

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