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Can Lilly Software Get More VISUAL?

Written By: Predrag Jakovljevic
Published On: February 8 2001

Event Summary

On January 16, Cerqa Copyright announced it has purchased VISUAL Supply Chain, Lilly Software's comprehensive supply chain management software solution. Cerqa Copyright, located in Austin, Texas, provides supply chain management solutions for domestic and international manufacturing facilities, distributors, retail outlets, and other customers that have specific procurement and distribution channel requirements. Offering expertise in inventory procurement, logistics, and freight management, Cerqa develops flexible, Just-in-Time (JIT) inventory delivery programs and offers kitting and packaging of sub-assemblies and finished goods. The company hopes the VISUAL solution will provide it with complete control over high volume order management, customer and vendor communication, production processes, quality control, and warehouse operations.

"We chose VISUAL Supply Chain because it was an all encompassing product," explains Marion Robertson, IT Systems Support Manager for Cerqa. "In our search, we looked at a lot of WMS vendors but found they could not offer a system to meet our every need. We didn't want to purchase add-on modules; we wanted a single solution that would cover manufacturing and distribution."

Lilly Software's integrated supply chain suite includes Enterprise Resource Planning (ERP), Manufacturing Execution Systems (MES), Advanced Planning and Scheduling (APS), Quality Management, E-business, Customer Relationship Management (CRM), and, the advanced Warehouse Management System (WMS) capabilities. VISUAL DCMS RF-enabled WMS application within the VISUAL suite, impressed Cerqa with its advanced functionality to track costs and manage inventory from point-of-receipt through storage and shipping.

"There are quite a few WMS players in today's marketplace, but not many with robust warehouse capabilities found in VISUAL DCMS. Smaller still is the number of companies that provide an integrated supply chain suite, which is what makes Lilly Software's solution unique," says Raymond Head, Sales Associate for Lilly Software Associates. "The ability of VISUAL DCMS to operate as an execution-based stand alone system or to be integrated to a client's specific host application is a distinct advantage over competitive systems. And with the explosive growth in the contract warehousing and Third Party Logistic (3PL) industries, VISUAL DCMS' inherent 3PL management functionality places Lilly Software in a solid position to meet this growing demand."

Market Impact

Lilly Software Associates, Inc. (LSA) is a Hampton, NH, USA-based privately held provider of a line of enterprise and supply chain management solutions for small-to-medium manufacturers and distributors. Lilly Software's financial success and double-digit revenue growth during the recent years have been attributable to its understanding of the requirements of its target market (SMEs) that wish to acquire most of their business applications from a single source. Also positively impacting the sales of its flagship product suite, VISUAL, is its intuitive graphical user interface (GUI).

With its easy-to-use graphical nature, the VISUAL suite enables companies to capture accurate, real-time data about their business processes using ERP, E-Business, APS, MES, Quality Management, Customer Relationship Management (CRM), and Warehouse Management System (WMS) capabilities. Most VISUAL applications run on a wide range of the most commonly used platforms. Lilly's supply chain management (SCM) solutions revolve around VISUAL Manufacturing, its flagship ERP product aimed primarily for to-order, although also suitable to to-stock and mixed-mode manufacturers in some instances. The product features strong built-in advanced planning and scheduling (APS) and manufacturing execution system (MES) capabilities. An additional difference with VISUAL is the ability to use metrics and tools not found in most other peer ERP systems to manage throughput in an orderly way increasing customer service and profit on a period-by-period basis.

Further, Lilly features the software that supports the needs of distribution companies with its VISUAL Distribution product. While many peer ERP products support picking and putting away requirements, a vast majority of them do not have the ability to manage an order that might require kitting, assembly, or light manufacturing in the distribution center. The real strength of VISUAL is its integration across all the functions of the manufacturing enterprise from design, via make, sell, distribute, to after-sales service.

In the fall of 1999, Lilly also introduced Internet Order Management, the first of several planned e-business applications. Then, in March 2000, the company released VISUAL Customer Relationship Management (CRM). The product supports marketing, sales, call center, and customer service functions, and it is fully integrated with the rest of the VISUAL product components. Lilly has also announced partnerships with Works.com and SupplierMarket.com to offer additional e-commerce functionality to its customers.

Another reason of Lilly's success is its distribution model, which is based solely on an indirect channel. The channel is comprised of companies and individuals that sell only Lilly's VISUAL product suite. Domain expertise in job shop manufacturing, from both a sales and product perspective, and easy-to-implement, easy-to-use products have been critical factors to the company's distribution channel success.

The Challenges

Nevertheless, Lilly Software will have to overcome some significant challenges in order to continue to thrive in a highly competitive environment. Its market awareness and global presence are limited, and further aggravated by the non-cohesive marketing of its product and company brand names (VISUAL and Lilly). Furthermore, the product shows inferior functionality in realms outside of job-shop manufacturing functionality on the shop floor level and of distribution. For example, the product does not currently offer the ability to control production with rate-based scheduling techniques. Creating and managing individual work orders is still a requirement; hence, it is not well suited for demand flow/pure repetitive environments. Further, it offers only a very basic standard costing method, cost simulation and planning tools compared to what most cost accountants are expecting in a "standard cost" system.

While VISUAL's multi-site and multi-national capabilities have been improving, it still has some limitations in handling distributed manufacturing entities; it requires either a completely centralized set of activities for manufacturing and accounting or a completely decentralized one. As an example, there is no ability to perform some functions like production control on a decentralized basis and then to have centralized order entry and accounts receivable.

On the technology front, while Lilly has embraced the Microsoft component object model (COM) technology that promises a building-block approach to application development, it is still a long way from completing the delivery of all COM-based products. Furthermore, as a Microsoft centric solution one would imagine Lilly would be more actively pursuing/integrating MS's .Net advancements, which has not happened yet.

While VISUAL is already enabled for E-Business using techniques such as the Web, EDI, integrated email, and event trigger/messaging techniques, the only web interface that the company representatives were able to demonstrate during a recent seminar was the on-line order status. Additionally, while seemingly most of vendors have been touting XML, Lilly's presentation was devoid of any XML initiatives or support statements. While its focus on object based client/server architecture delivers a functionally strong product, more nimble competitors are pursuing fully web-based solutions using XML. Competitors are also formally endorsing Application Service Provider (ASP) strategic partnerships in order to provide their current and potential customers with attractive options; Lilly has still been seemingly inactive in that regard.

User Recommendations

Lilly Software's target market, North American single-site job shop discrete manufacturing and distribution companies and/or their divisions with up to $100 million-a-year revenue range, should consider the company's value proposition, but avoid selecting it without looking at what the other vendors have to offer. These companies generally have a limited IT budget, a conservative IT strategy, complex discrete job shop manufacturing and supply chain demands, and less complex CRM and B2B e-commerce requirements. The industries that would most likely benefit from using Lilly Software's products are aerospace & defense, electronics, instrumentation, industrial machinery, fabricated metals, consumer packaged goods (CPG), wholesale distribution, automotive and transportation equipment.

Companies that require multi-site and multi-national capability, high-volume transaction processing, and/or across the range functional depth may benefit from evaluating other offerings.

 
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