On November 14, Logistics.com, a provider of transportation procurement
and management technology, announced a strategic partnership with SCT
(NASDAQ: SCTC), whose one division provides business applications to process
manufacturing and distribution enterprises. The partnership purports to
combine SCT's strengths in process industry manufacturing related enterprise
applications with Logistics.com's comprehensive transportation system
to broaden SCT's "end-to-end" business solution for process manufacturers
and distributors in the food, beverage, chemical, CPG, pharmaceutical,
biotechnology and related process industries.
partnership combines SCT's iProcess.sct collaborative planning,
network optimization, supply chain planning and execution (SCP&E) capabilities
with Logistics.com's OptiManage transportation management and execution
solution. The companies believe the integrated offering will enable significant
manufacturing and logistics cost reductions and improved customer service
for process manufacturers and distributors. Logistics.com's OptiManage
will be used in the integrated solution to handle load consolidation,
optimal carrier selection, routing optimization, tendering and real-time
tracking and tracing of road-based shipments in North America. SCT's iProcess.sct
solution will provide all other required supply chain planning, execution
and Relationship Network Management.
the announcement happened not that long after a very similar alliance
(and with almost identical PR rhetoric) with another prominent transportation
procurement provider, G-Log (see SCT
and G-Log Form Alliance For Collaborative Logistics in the Process Industries),
many have wondered whether the partnerships with both vendors with an
expertise in logistics were indeed necessary.
first sight, this is a win-win situation for two companies that have been
ebullient lately in their respective complementary strongholds (see SCT
Corporation Means (e)Business For Process Manufacturing and Logistics.com
Might Prove An Internet Success Story After All). The growth of industry
specific, vertical solutions continues with concurrent internal development,
acquisitions and partnerships, and the notion of an "end-to-end" solution
continues to evolve. When it comes to transportation procurement and execution,
most ERP vendors, even those with strong native transportation planning
capabilities (e.g., J.D. Edwards), have had to turn to the partnership
this partnership, the process industries should have a broadened definition
of what is achievable, as any software vendor that strives to offer its
clients an end-to-end supply chain management (SCM) solution should also
provide logistics capabilities, especially considering the payback potential
of these solutions. The partnership in case should enhance the value proposition
of SCT's product suite, while providing Logistics.com with an opportunity
to gain additional traction in the process industries.
the process manufacturing and distribution segment, the alliance seems
to be a good fit, as both companies have sound customer lists, particularly
within the food and retail segments. For example, Logistics .com touts
names like Kraft, Colgate, Georgia Pacific,
PPG and Schreiber Cheese, while SCT has Cargill,
SmithKline Beecham, Godiva Chocolate, Akzo
Nobel Organon, and Smithfields.
continues to execute well in the operational level-centric applications,
unlike most of the other process ERP wannabes who are still selling generic
'white collar' applications (e.g., HR, financial accounting, procurement)
into the process industries.
on the other hand, needs to tie its execution modules into the plant-level
applications in order to give a customer a full solution. In process industries,
the control of material extends further into the supply chain (owing for
example to recalls, product shelf life and/or aging repercussions, etc.).
Therefore, tying these two products together should be beneficial, as
Logistics.com cannot provide the execution without a backbone system that
does its part of the business, while SCT cannot deliver the full job without
the transportation part.
for the SCT's G-Log and Logistics.com alliances conflict, it is less than
meets the eye. While G-Log and Logistics.com can be seen as competitors
in a very broad sense, they specialize in different things. G-Log mastery
is in global and multi-modal transportation (truck, rail, air, and ocean
- and any combination of these), while Logistics.com excels at North America-only
and truck-only transportation. Logistics.com also has a strong offering
in the transportation e-procurement side (with its OptiBid product), while
G-Log does not really target that market. Furthermore, the partnerships
also seem to be complementary marketwise, considering G-Log's experience
in the chemicals industry, with customers like Dupont and ShipChem,
whereas Logistics.com has stronger penetration in the food market segment.
Key to process manufacturing and distribution companies is that this partnership
addresses major bases of operational efficiency, cost, and customer service.
The combination allows these companies to address the extended supply
chain with the added bonus of process industry specific solutions. Process
industry companies should consider the combined SCT - Logistics.com solution
if they are looking for a supply chain planning solution that includes
a transportation planning component. Also, installed base clients of either
Logistics.com or SCT should consider the possible cross selling of products
of the other company, bearing in mind the availability of standard interfaces
between the products. The key tenets of success are the tight integration
and a single point of contact, which points to having an immaculate channel
with expertise in both product lines.
SCT iProcess.sct customers should evaluate the Logistics.com applications
as a way to both add value to their existing iProcess.sct applications
and resolve their logistics requirements. Existing process industry Logistics.com
customers looking for added functionality of the related areas of SCM,
e-business, CRM or ERP should evaluate SCT regardless of their incumbent
vendor relationships. Process companies considering new solutions in the
supply chain, e-business, or ERP areas should place SCT on their short
list. These companies should consider the added functionality from this
partnership for an addition to their requirements list.
comprehensive recommendations for both current and potential Logistics.com
and SCT users can be found in Logistics.com
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