Not all SCM Products Are Created Equal

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Amid the hype that pervades vendor marketing campaigns and press announcements, it can be difficult for corporate IT buyers to discern the true capabilities of a given supply chain management suite. In this article, we examine capabilities of five top Supply Chain Management software vendors in several key areas of functionality: material procurement planning, manufacturing planning and scheduling, distribution and transportation management, and inventory management and warehousing.

In the graphs that follow, each circle or "dot" represents a vendor option. The size of the dot indicates how a particular vendor performed overall. High-level criteria that contributed to the overall ranking were corporate viability, strategy, services and support capabilities, product functionality, and technology. Though this article focuses only on product functionality. Vendors discussed are Adexa, Aspen Technology, i2 Technologies, Manugistics Group, and Logility.

The first point of interest is that our detail ratings have placed all the vendors in the top half, and in some cases the top right quadrant of the graphs. While this may seem, at first, to belie an imbalance in the model, it occurs because the five vendors shown are leaders in the SCM field and have strong strategy and overall scores relative to players in the broader SCM market. Not included in this evaluation are the many other smaller, niche market SCM vendors who would receive proportionally lower ratings.

Material Procurement Planning

Material procurement planning covers activities related to purchasing direct (raw) materials and indirect materials such as MRO, supplies that indirectly support manufacturing and distribution. Sub categories include strategic sourcing, access to product catalogs, purchase order management, and supplier tracking and rating.

Manugistics comes out on top within material procurement planning, though Adexa finishes a close second. Among the remaining vendors, only i2 may be the biggest surprise given its acquisition of Aspect Development and SupplyBase, though one should remember two things:

  1. these acquisitions are fairly recent and i2 has yet to demonstrate a competent, fully integrated application
  2. product catalog integration is but one of many functional sub-criteria

If it can realize its vision for one-stop design, configuration, and procurement planning, i2 may well pull ahead of the competition, but for now Manugistics' NetWORKS Procurement in conjunction with Supply and other modules offers mature capabilities that allow users to optimize procurement decisions and connect to suppliers in real-time.

Figure 1: Overall Score Vs. Material Procurement Planning

Manufacturing Planning and Scheduling

Manufacturing planning and scheduling brings together capabilities for production blueprints and detailed machine-level sequencing for converting raw materials to finished goods. Factors of importance within this category include constraint-based master planning, material requirements planning, capacity and resource planning, and product data management.

Figure 2 shows that, for the most part, the vendors have similar capabilities in regard to manufacturing planning and scheduling. This is not surprising since these vendors and their acquisitions originated within Advanced Planning and Scheduling (APS), a domain that catered primarily to problems encountered in scheduling and higher level strategic production planning. This is an area where vendors need to focus on enhancements in order to create differentiation.

Figure 2: Overall Score Vs. Manufacturing Planning and Scheduling

Inventory Management and Warehousing

Inventory management and warehousing activities are those involved in storing materials (finished goods, raw materials, WIP) at points between movement and processing. In this category, we include both planning and execution features like those associated with warehouse management such as crossdock management, inbound, outbound, and yard management.

Logility stands out from the rest of the crowd due to its ability to offer complete WMS capabilities via WarehousePRO, a product that made up part of its inheritance from parent company American Software in 1997. i2 comes a distant second through its partnership with EXE Technologies, a third-party alliance that carries a lower rating than functionality supported natively.

Figure 3: Overall Score Vs. Inventory Management and Warehousing

Distribution and Transportation Management

Distribution and transportation management encompasses movement of finished goods through the network of suppliers, manufacturers, distributors, resellers, and customers. Here, we are interested in tools that allow users to model distribution networks graphically, link the models to real-time planning modules for analysis as well as provide transportation management and execution capabilities.

Once again, Manugistics ranks ahead of the rest in this category, mainly by virtue of its mature functionality for distribution and transportation planning, which dates back to its acquisition of Rover Technology in 1991. Logility places a close second and has achieved considerable success with its DRP application for industrial and consumer packaged goods manufacturers.

Figure 4: Overall Score Vs. Distribution and Transportation Management

User Recommendations

Users are advised to conduct a thorough analysis of vendor strengths and weaknesses in the following six areas: product functionality, product technology, product cost, corporate strategy, corporate viability, and corporate service and support. The preceding analysis constitutes a high level evaluation on certain parts of product functionality that should be replicated and expanded upon for the remaining key criteria areas. Only through a diligent process of evaluation that includes scripted scenario demonstrations can users hope to select an SCM system that will serve their organizations and deliver expected cost savings.

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