Managing Automation - February 2008 - (Page 12) FREE E-NEWSLETTERS SUBSRIBE NOW! news managingautomation.com maonline Go online for daily news updates in perspective Salvucci, in an interview. But though manufacturers are aware of the potential benefits of replacing manual processes with service and parts planning technology — such as decreasing parts inventory, streamlining logistics, and more precise demand forecasts in the service chain — many remain cautious. “For C-level executives, when you start talking about reducing inventory where Bob Salvucci they’re trying to satisfy their customers, the last thing to do is take inventory away,” Salvucci said. One of the foils for such apprehension, of course, is the ongoing search for new profit centers, even in areas such as post-sale service that have long been regarded only as cost producers — and some of which are clearly on the rise. Inventory carrying and transportation costs, for example, in recent years have doubled on average, Salvucci noted. Service parts planning software can help by calculating the best network configuration for service parts at the least cost. In addition, manufacturers serving certain “customer-centric” verticals have an extra layer of complexity to consider in their service chains — the service-level agreement (SLA). In addition to such verticals as A&D, industrial, and medical devices, mandates now require some OEM suppliers to government organizations to honor these performance-based contracts. These customers “are really buying more of a service, not just parts,” Salvucci said. (Think in terms of selling flight hours, not airplanes.) Some service parts planning software contains functionality that tracks contractual agreements and calculates the inventory required to fulfill them. MCA, for its part, hopes to continue its momentum in the growing post-sale service space by adding more smaller companies — those with less than $20 million service inventories — to its customer cache next year when it brings out an on-demand offering preconfigured for individual industries, including secondand third-tier A&D, capital equipment, and high-tech suppliers, Salvucci said. — Diane Himes Alliances, Executive Appointments, Mergers & Acquisitions, Products acquisitions, though Kürpick won’t divulge potential targets. “These days you either buy or you are bought,” Pezzini declares. And while Oracle has finally reached an agreement to acquire Software AG rival BEA Systems and oddsmakers expect Tibco to be snatched up as well, Software AG is likely to remain a predator, not prey, Kürpick says. Peter Schnell, the company’s founder, has transferred all his stock — amounting to 30% — to the charitable Software AG Foundation, one of Germany’s largest. “It makes it impossible, unless somebody convinces the founder to sell all of his shares, to acquire Software AG,” Kürpick says. — C.C. Transform your business through technology MCA TRIES TO RIDE THE POST-SALES SERVICES WAVE ndustry studies perennially have found that manufacturers stand to gain from tapping into aftermarket sales opportunities, and recent indications are that they are ramping up efforts to do so. Privately held service parts planning and optimization provider MCA Solutions, for example, reported a 70% spike in annual revenue in 2007 after a successful expansion beyond its traditional target markets, including signing several new customers. According to AMR Research, the market for service parts planning was approximately $120 million in 2006, a 7% increase from 2005. The research firm expects the same level of growth for the next two years as companies automate manual processes with service chain management systems. MCA, one of the original service parts planning vendors, had focused primarily on the markets of its original customers, including aerospace and defense, high tech, and semiconductor manufacturing, since its founding in 1999. Then, last year, the company added industrial equipment supplier Briggs and Stratton, medical equipment maker Sysmex, and Canadian commercial aircraft manufacturer Bombardier, as well as its first European customer, printing and packing specialist Bosch. “People are finally getting to the point where they’re looking at the space and saying, ‘We need help,’ ” said MCA Chief Executive Bob FREE Newsletters include: • MA Daily News Alert Hot off the press news exclusives written by MA Editorial I • MA Membership Alert The latest industry research, products, news and web events Compete in the new global economy for years to come • Progressive Manufacturer • Viewpoint Provocative and inspirational, features the opinion columns in print with exclusives online Sign Up Today at: MANAGINGAUTOMATION.COM /NEWSLETTERS ® http://managingautomation.com http://managingautomation.com/newsletters http://managingautomation.com/newsletters
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