November 8, RedPrairie Corporation (www.redprairie.com,
formerly McHugh Software International), lately an upbeat provider
of comprehensive supply chain execution (SCE) solutions including transportation,
labor productivity and warehouse management, as well as supply chain visibility
and collaboration solutions, released a new version of its warehouse management
system (WMS), DLx Warehouse, containing the specific processing
requirements food & beverage and consumer packaged goods (CPG) companies require
running on supposedly the cost effective Microsoft Windows 2000
platform. The release has been coupled with RedPrairie's DLx Xpress
rapid implementation methodology aimed at enabling swift deployment of food,
beverage, and CPG functionality. RedPrairie believes this combination of technology
and easy deployment provides competitive advantage and rapid return on investment
(ROI) to its coveted smaller customers, and should render it more competitive
in the lower-end of the market, below it's traditional radar screen.
DLx Warehouse/D 6.0 release runs on the Windows 2000 platform
using either Oracle or Microsoft SQL Server
databases, and it is available with industry-specific deployment packages for
Consumer Goods, Food & Beverage, and other environments. For food, beverage,
and CPG companies, e.g., the system reportedly has extensive functionality to
manage multi-level holds, time holds, catch weights, shelf life, expiration
dates, quality assurance, recall processing and many other germane distribution
The news comes at the heels of the November 4 announcement when RedPrairie announced its third consecutive record quarter, despite the continuing slump in the global software market. For Q3 2002, RedPrairie recorded earnings before interest, taxes, depreciation and amortization (EBITDA) of 19%, an almost incredulous increase of 183% over the same quarter last year, and bookings 152% higher than in Q3 2001. With this continued growth, RedPrairie has established itself as one of the leaders in the SCE industry. Fueling the company's record growth and profitability was a whopping 105% growth in software license revenue and total revenue of $18 million, representing a 14% increase from the same quarter last year. The company achieved higher gross margins driven by increasing license revenue and service margins, and a ???$5.0 million in cash generated from operations in the quarter, up $2.5 million from a year ago but, at the same time, it committed an additional 13% to research and development, compared to Q3 2001.
Part One of a four-part article on RedPrairie.
Two and Three will cover the Market Impact.
Four will discuss Challenges and make User Recommendations.
Other Recent Events
Other Q3 2002 highlights would include:
September 13, RedPrairie introduced the above-mentioned of DLx Xpress rapid
WMS implementation program, based on Six Sigma methodologies, which should
enable mid-market companies to affordably adopt an advanced WMS solution.
While mid-market companies should now be able to gain the benefits of a WMS
solution with a flexible deployment model that can be tailored to their requirements,
resources and budgets, the product could still also benefit larger companies
requiring rapid implementation schedules due to project timelines. DLx Xpress
reportedly combines a streamlined implementation methodology and industry-specific
best practice process models. RedPrairie also claims to be the first software
company in the supply chain management (SCM) industry to adopt Six Sigma principles
as the foundation for its deployment methodologies, which is a widely recognized
and accepted approach to achieving process quality and consistency.
- On August 27,
RedPrairie released a new version of its warehouse management software, providing
third party logistics companies (3PLs) the solution to meet distribution needs
across multiple verticals, including Consumer Goods, Food & Beverage, High
Tech, Service Parts, Pharmaceutical and other industries. The foundation for
this powerful 3PL offering is an enhanced version of RedPrairie's DLx Warehouse
solution, which meets wide-ranging distribution and customer service requirements
of third party logistics providers (3PLs) and end users across multiple industries.
DLx Warehouse/D 6.0 reportedly offers significantly enhanced functionality
to support distribution, transportation, productivity and performance management
requirements for customers and 3PLs serving the above industries. The release
marks the company's breakthrough, as the first time such broad industry functionality,
executed through vertical-specific templates, has been provided through a
single suite of warehouse, productivity and transportation management solutions,
enhanced with applications for real-time control and performance management.
that need a single system to serve the highly variable distribution requirements
of customers across dissimilar industries, this new release might significantly
reduce the complexity and cost of operations while enhancing customer service.
DLx Warehouse/D 6.0 also reportedly offers enhanced integration to other
DigitaLogistix? (DLx) applications, including solutions for:
labor reporting and productivity management
planning and execution
score-carding and performance measurement
- Global supply
chain visibility and real-time control
event management and workflow-based resolution.
On July 12, the company announced general availability of release 6.1 of its
DLx Labor software as part of a broader enhancement of its
Productivity Management solution that should enable companies
to increase logistics productivity, improve performance in areas such as customer
service and profitability, and realize more consistent and predictable fulfillment
operations. The 6.1 release also includes standard integration to voice recognition
systems for hands-free, eyes-free capture of assignment completion times and
real-time feedback to users and management on performance metrics, which should
drive greater operational efficiency and cost savings through streamlined
fulfillment processes and improved labor productivity.
application of the voice recognition technology will be the integration of
Vocollect's industry leading Talkman system
for one of the largest grocery wholesalers and retailers in North America.
The release also contains a standard interface to DLx Scorecard,
RedPrairie's online supply chain analytics and performance management system,
aimed at enabling companies to track and analyze performance metrics such
as direct labor hours, indirect labor hours and travel times across multiple
facilities in near real time to quickly identify performance problems and
take corrective action before they adversely impact efficiency and customer
Productivity Management solution directly attacks fulfillment costs and customer
satisfaction challenges by delivering measurable improvements in distribution
center productivity, customer performance, and predictability of operations.
It accomplishes this through the following four components that collectively
act at ensuring improved results:
/ ROI quantification through comprehensive customer value analysis
of best practices, preferred methods and operational metrics
productivity and resource planning software (DLxLabor)
engineering and change management services.
Other notable enhancements in the 6.1 release include streamlined authorization maintenance for maintaining users, roles and menu options, improved warehouse mapping and assignment handling, and a more flexible reporting engine.
RedPrairie Is Born
On May 22, the company adopted its new name, RedPrairie?Corporation, from formerly McHugh Software to mark its embracement of the most significant change in its over 25 year corporate history, with ensuing implications for how companies should achieve value from supply chain software solutions. RedPrairie wants to revolutionize the SCE industry by organizing its entire company and delivery systems to focus on customers achieving value and measurable results from its solutions. This approach will supposedly deliver logistics results for RedPrairie customers, which the company is willing to guarantee through a shared risk-reward program. The company believes this approach is so fundamentally different from other software providers that only a new company name could adequately signify this transformation -- with Red' signifying the revolutionary change and Prairie' signifying the ultimate order/harmony.
RedPrairie has transformed itself in response to two fundamental business issues facing the marketplace:
The cost of logistics is too high and rising for many companies, the result
of increased supply chain complexity and other cost pressures.
Companies have not seen the returns they expected from IT investments, leading
executives to become disillusioned with the false promises of many solution
is committed to addressing both of these key business issues with a new approach
to solution deployment and results achievement that ensures customers will reduce
logistics costs and reach the results they expect from RedPrairie solutions.
And RedPrairie is willing to guarantee these results through a shared risk-reward
financial model. In addition to possessing one of the industry's deepest, richest
set of SCE applications, the company is now leveraging these solutions through
a new value delivery system (dubbed the RedPrairie Approach)
that focuses end-to-end throughout the project lifecycle on value realization
and results achievement. Leading by example, RedPrairie is also transforming
its own internal culture and processes to support this results-focused approach,
impacting every function and process, from employee titles to measurement and
compensation systems. The model is intended to make RedPrairie more of a "logistics
results company" than a mere software vendor.
concludes Part One of a four-part note on RedPrairie.
Parts Two and Three will cover the Market Impact.
Four will discuss Challenges and make User Recommendations.