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Manugistics Envisions Supplier Relationship Management Solution

Written By: Steve McVey
Published On: August 10 2001

Manugistics Envisions Supplier Relationship Management Solution
S. McVey - August 10, 2001

Event Summary

At its Envision 2001 user conference in Orlando, Florida, Manugistics Group announced entry into the Supplier Relationship Management (SRM) market with solutions targeted at six key issues critical to maintaining strategic supplier relationships: design, sourcing, collaborative planning, purchasing, delivery, and efficiency monitoring. The company cites as additional benefits improved parts and supplier base rationalization, reduced part redundancies, a better ability to leverage volume discounts with preferred suppliers, streamlined purchasing processes, and reduced development, material, and inventory costs.

"With shrinking product life cycles, it has become critical to design, source, plan, buy and deliver component materials right the first time," said Greg Owens, Manugistics chairman and CEO. "Manugistics SRM solutions focus on high-impact upstream material life cycle processes to help enterprises, and their raw material suppliers, finished goods suppliers, outsourced manufacturers and transportation and logistics providers improve visibility to supply conditions, reduce inefficiencies and shrink cycle times."

Manugistics believes its SRM offerings will strongly complement the company's supply chain management and pricing and revenue optimization solutions, enabling it to extend its EPO offering to the material life cycle. According to Owens, "SRM extends Manugistics' Enterprise Profit Optimization capabilities - creating strategic, operational and tactical Manugistics EPO solutions that can fully optimize, and improve execution across, the entire supply- and demand-side value chain, from supplier discovery, to order fulfillment, to pricing."

Market Impact

Shrinking product life cycles are nowhere more prevalent than in the electronics and high tech industry. For example, PC manufacturers are caught in an endless cycle of design, assemble, sell, and ship, in the hope of exhausting inventories so that they can do it all over again from the beginning. Supplier Relationship Management offers manufacturers a way to visualize and to some extent control the things happening inside the cycle.

Manugistics' launch of SRM is clear evidence that it intends to stake a larger claim in the E&HT market, the near-exclusive domain of its arch-nemesis i2 Technologies. Manugistics will need to be aggressive if it is to lure customers away from i2, which launched its own SRM solution several months ago. In addition to being faster to market, i2 owns the part and supplier content it offers through i2 SRM (for more information see i2 Technologies Lives Life In The Fast Lane). Manugistics relies on PartMiner, an online electronic marketplace provider whose database covers over 15 million part numbers from over 2,000 manufacturers of high tech equipment. Although PartMiner offers a wealth of data in an area where Manugistics is perceived as lacking, i2's content (derived primarily from the Aspect Development acquisition) covers a broader range of industries and can be delivered to customers at potentially lower cost.

User Recommendations

The economic downturn presents an excellent opportunity to acquire SRM for those companies whose IT budgets have survived cost reduction initiatives. Vendors are eager to jumpstart revenues and gain an early lead in the post-downturn market likely to begin in the fourth quarter of this year. Buyers in PC, telecommunications, consumer electronics, automotive, aerospace, and other consumer goods industries stand to gain the most from improved management of supplier relationships and should place Manugistics on a shortlist if only due to its high visibility and commitment to customers it has demonstrated over the past three decades. Although Manugistics contends that it can deliver SRM now, it concedes that some work still needs to be accomplished, particularly around the Frictionless Commerce integration. Fall to early winter is a more reasonable timeframe to expect to see new customer announcements for Manugistics SRM.

 
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