Analyzing Manhattan Associates’ Supply Chain Platform Play - Part 3

Part 1 of this blog series analyzed Manhattan Associates’ innovative Supply Chain Process Platform (SCPP)-based analytic applications, including Supply Chain Intelligence (SCI) and Total Cost to Serve (TCS). I discussed other Manhattan SCOPE suite modules as well as the company’s recent evolution from being a mere supply chain execution (SCE) provider.

In Part 2, I zoomed in on the Distributed Order Management (DOM) module, which is a critical “cerebral” SCOPE/SCPP application. I explained the DOM inner workings via a few scenarios of how the system could take customer orders and decides which location is best suited to fulfill them based on inventory on hand, inventory in transit, and complex delivery requirements and preferences.

Manhattan Associates’ platform pieces also enable the vendor to identify new ways to combine solutions to uniquely address industry-specific business problems. At the 2011 National Retail Federation (NRF) Annual Conference, the vendor revealed the next generation of Zero Disappointment Retail (ZDR), a concrete deployment of its SCOPE, SCPP, and multi-channel order management concepts in the retail sector.

Manhattan SCOPE & SCPP Retail Example: ZDR

ZDR offers supply chain optimization capabilities that enable retailers to increase revenue by saving every possible sale and presenting a consistent brand experience to customers across all viable selling channels. Manhattan demonstrated the “ideal” customer retail experience via the following series of vignettes that depict the “anywhere, anytime, anyhow “retail experience (accompanying video here):

  • Save every sale: Manhattan’s mobile supply chain applications (mentioned in Part 1) leverage SCPP to empower in-store sales associates to find, sell, and deliver products to customers no matter where the product might be in the supply chain network while also providing a variety of shipping options to fulfill every brand promise made to customers.

  • Right-size inventory: Manhattan’s solutions provide the automation, real-time visibility, and dynamic decision-making capabilities to lower overall inventory, reduce touch points in the process, and get the right amount of products to the right place at the right time based on buying trends and seasonal demand.

  • React quickly and decisively: Manhattan provides a single source to consistently collect, manage, distribute, and act on information and events that flow through the supply chain as events happen anywhere in the worldwide supply network, to allow for informed decision-making in re-routing shipments, allocating inventory, or recalculating an entire plan based on events as they occur.

Three Rules of ZDR Seen in Action at NRF 2011

During the NRF 2011 event, I attended Manhattan’s mockup demonstration on how retailers can honor the three market rules that create Zero Disappointment customer experiences. Rule #1 is to “Keep the ‘boss’ (i.e., the customer) happy, anywhere, anytime.” With ZDR, retailers can present one brand and one experience across multiple touch points.

The demo showed IBM’s WebSphere Commerce Server at the e-commerce front-end (although ATG and any other storefront/e-commerce engine could be leveraged as well). IBM's e-commerce platform caters to personalization, merchandising marketing and promotion, order capture (with inventory availability information), shopping carts, pricing (quotes, payment, taxation, contract entitlement, etc.), and customer service aspects. The latter aspect can be achieved in multiple ways (e.g., via Internet chat, call center conversations, etc.) for order modifications and cross-selling and up-selling opportunities. Eventually, the Manhattan person playing the role of a customer placed a Web order for a pair of fancy women's shoes, to illustrate how to move to the next step.

The next station in a mock-up of a back store or warehouse illustrated Rule #2: “Transform every retail channel or outlet into a ‘promises kept’ experience.” To that end, a DOM-backed ZDR solution provides real-time insights to make promises the retailer can keep.

There is a bi-directional communication between IBM’s WebSphere Commerce Server and Manhattan’s DOM system on inventory visibility and real-time available-to-promise (ATP) updates. Behind the scenes, DOM performs order processing in terms of inventory allocation and reservation, routing, and release, with exception management and alerting as necessary.

The final station was an actual store warehouse and shipping dock mockup to illustrate Rule #3: “Execute ‘convenience fulfillment’ on customer terms, not yours.” The idea is to deliver exactly what, when, where, and how the customer wants. As an example, there was a delivery of the pair of shoes that were ordered in the first step, and an added shoe bag as a cross-sale that took place in the meantime (say, the customer has meanwhile called back to add this item to the order).

The added item might be delivered from another node in the network, if necessary. This is the place where Manhattan’s warehousing management, labor management, and transportation management applications perform the heavy-duty work of a distribution center (DC) and/or store pick, pack, and ship actions as well as suppliers’ drop-shipment integration and execution.

What Might Be Next in ZDR’s Store (Pun Intended)?

At this stage, Manhattan primarily focuses on customer fulfillment and theoretical delight once the order can be promised and placed. So, if the system has real-time visibility to where exactly the desired items are physically stored across all channels from an order fulfillment perspective, it might be exactly what is required for the consumer to see and order items (or return them, for whatever reason). To achieve visibility across a vast retail supply chain and accurately across all available channels is indeed a huge feat.

However, as I mentioned in a recent article that analyzed Manhattan and RedPrairie’s paths, Manhattan does not yet have cutting-edge tools to sense demand, forecast, and optimize inventory at the retail shelf level. What the vendor currently lacks is the dynamic connection to the store shelf demand that is critical for reducing stock-outs or out of stocks (OOS) so that customers really are not disappointed in that all-too-common manner. Indeed, the key to no disappointment is having the stock available, which requires a detailed understanding of item by store sales and inventory and the ability to roll that into a forecast.

Nitpickers might even cynically say that Manhattan’s zero-disappointment mantra might seem a bit odd, because if retailers do not astutely forecast and replenish in store and do not have the optimal product availability, they will have some OOS disappointments even with perfect visibility. After all, visibility to poor availability might only make it worse. To be fair, Manhattan currently vouches for a zero-disappointment only after the order has been placed, provided that inventory was available to be promised at the time of the order.

During our NRF 2001 chat, Manhattan’s staffers agreed with my point on the importance of accurately planning for demand to ensure that retailers have the right inventory in the DC to be distributed to the customer. After all, retailers can run a very efficient retail DC that is full of the “wrong stuff" and it is better to prevent missed sales opportunities and less pleasing late orders (and backorders) with proper planning.

Businesses achieve the greatest benefit from a flow-through distribution model only by synchronizing demand management (DM), inventory optimization (IO), purchase order (PO) allocations, and the execution of the physical distribution within the warehouse. To that end, Manhattan uses available point of sales (POS) data and historical trends from retailers’ third-party systems.

Manhattan may approach this issue differently than others, but is believes that it is able to sense demand, forecast, and optimize inventory at the shelf level. Manhattan’s planning & forecasting solutions can optimize at the item/location level, i.e. store shelf. In addition, they can see the shelf demand since they are aware of inventory leaving retail stores from POS systems, and inventory being transferred to the front room via FieldSCOUT, the mobile application mentioned in Part 1.

What Do Competitors Offer?

But simply relying on historic data as an indicator of future demand is not enough in this dynamic economy. Companies need the ability to tap into multiple demand signals to drive an accurate forecast. In the consumer goods sector, POS or syndicated data and demand signal repositories (DSR) are very important to adjust demand plans as needed for what is happening today.

To that end, in addition to strong demand management capabilities (from former Demantra), Oracle Retail has some interesting developments in the works on the multi-channel order fulfillment side. An Oracle Fusion Applications (OFA) product is coming out later this year called Distributed Order Orchestration, and of course, we are all aware of Oracle’s recent acquisition of ATG, which has a nice tie in to the current Oracle Retail offering.

Moreover, as I mentioned in my recent series, the entire Logility Voyager Solutions suite is built on business performance management (BPM) architecture that links all aspects of the supply chain to monitor key performance indicators (KPI’s). In fact, retailers can also tap into other enterprise data sources to get a comprehensive picture of their extended enterprise and be alerted to key areas that require further analysis or resolution.

Logility has outstanding demand management capabilities that leverage multiple demand signals (including POS and syndicated data). Additionally, Voyager ties in retailers’ time-phased inventory policies and service level goals to ensure proper availability at the DC for order shipment. Moreover, Logility also provides warehousing and transportation management solution components. JDA Software, TAKE Supply Chain, ChainDrive, and Epicor Retail all have similar value propositions.

Perhaps even more challenging (this is a vulnerability for Manhattan) could be the competition from Sterling Commerce, now an important part of IBM’s Retail Framework, together with WebSphere Commerce Server and Cognos analytics, and with more recently acquired Unica, Netezza, and Coremetrics consumer intelligence capabilities. Sterling Commerce has arguably been a DOM pioneer via former Yantra, with 20 of Top 25 global retailers as customers, as discussed in my 2009 research article on the company. Manhattan’s current DOM install base is about a dozen large retailers.

Certainly, IBM has been an equal opportunity partner and co-opetitor to continue to offer WebSphere Commerce Server to Manhattan’s DOM customers, but the company will likely focus more on rounding its own complete retail solution. I was recently told by Sterling Commerce’s contacts to look for upcoming capabilities to handle multiple order line items in a same sales order coming from different channels, whereas currently every line item that comes via a particular channel requires a separate order. One should also expect some synergies between WebSphere Commerce Server and Sterling CPQ (which stands for “Configure, Price, Quote”), the latter sales configuration capabilities coming from former Comergent.

Inevitable RedPrairie Competition: Coming Full Circle

In addition to RedPrairie’s Flowcasting and retail store inventory management systems giving its customers the retail shelf demand insight (that Manhattan does not currently offer), the recent Escalate Retail acquisition promises the combination of e-commerce “shop anywhere, buy anywhere, pick-up anywhere, return anywhere” capabilities. The acquisition was RedPrairie’s response to the market realities of the consumer being in the driver’s seat and defining the marketplace for retail.

Additionally, as I mentioned in my recent article, the vendor has enhanced its ability to leverage its Workforce Management (WFM) and Inventory Management solutions to help retailers optimize inventory and fulfillment processes regardless of where the order is in the supply chain, from search to sale to delivery. The point here is that RedPrairie is already present in retail stores with both inventory and workforce visibility and control, and thus can do a better job of the in-store fulfillment options than Manhattan and the other aforementioned DOM aspirants can.

The question in my mind about so many acquisitions in such quick succession is about making sure that each acquisition is successful from a product integration and cultural standpoint. Will RedPrairie be able to build a seamless end-to-end product and have good information flow between all these solutions to leverage the upcoming “suite”?

To give Manhattan some credit, the SCPP platform is mostly with the same "genetic code" (i.e., there have been no acquisitions since 2005). RedPrairie acknowledges that impending integrations will be a challenge, but since the vendor already has joint customers with Escalate, SoftTechnics, and ShipComm, and has done required point-to-point integrations, at least it understands the issues. I don't anticipate a common code set to be part of this offering for the foreseeable future.

At the end of the day, most of the abovementioned vendors seem to be doing well of late, regardless of whether they are focusing ever more on retail stores (downstream) or on multi-channel order fulfillment (upstreamfrom retail stores). For now, they might all be correct in their pursuits.

Dear readers, what are your comments, thoughts, suggestions, or individual experiences with the aforementioned vendors and their supply chain management (SCM) tools? What do you think about these vendors’ individual approaches?
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