Introduction
Intentia
International AB (XSSE: INT B), a Swedish provider of enterprise business
applications for mid-size and large enterprises, has been a major software player
off the shores of North America for nearly two decades, developing, inter alia,
a well-earned reputation in process manufacturing software for the food and
beverage industries. Now, Intentia has set its sights on the United States and
Canada. This article looks at the functions and features of Movex Food
and Beverage (hereafter simply referred to as Movex).
The
features and functions common to enterprise resource planning (ERP) and supply
chain management (SCM) will be briefly discussed, (for more information on ERP
and SCM, see Process
Manufacturing Software: A Primer, The
Fatal Flaws for Process Manufacturers, and What
Makes Process Process?).
This
article will concentrate on those features and functions that will present a
considerable challenge to traditional competitors like Geac
(with its System21 product), SSA Global, Invensys
Production Systems (formerly Marcam's and subsequently
Baan Process' PRISM and Protean products),
Ross Systems, Oracle, Adonix Process
(formerly CIMPRO) and Agilisys (formerly SCT
Process). One should also never discount the competition coming from
SAP, PeopleSoft (with former J.D.
Edwards' products) and IFS within certain geographic
regions. According to Intentia, SAP and J.D. Edwards have been the competitors
it has faced most frequently on a global scale, even for the food and beverage
prospects.
Specifically, this three-part article provides a glimpse of Intentia's Movex software offering by discussing the following aspects:
-
Overview of Intentia (Part One)
-
ERP functions and features (Part One)
-
SCM functions and features (Part Two)
-
Additional functions and features (Part Two)
-
Observations and user recommendations (Part Three)
This
is Part One of a three-part note.
Part
Two will discuss functions and features for SCM.
Part
Three will make observations and user recommendations.
Overview of Intentia
While
many outside of Europe and Australasia may not have necessarily heard of Intentia,
the company has an impressive background. Founded in 1984, it went public in
1996, and is now Scandinavia's largest software company. Intentia is established
in some forty countries with over 3,100 employees worldwide. Annual net revenues
for 2002 were $373.5 million (USD), based on the average exchange rates for
the period. Intentia has 3,500 customers with over 400 clients using its food
and beverage software, and contributing approximately 17 percent to the total
revenue mark. Also, of over one hundred new customers during 2003, twenty-five
belong to the food and beverage sector.
Being Europe's second largest enterprise software company and one of the largest five in the world, Intentia is a major player in selected industry verticals such as fashion, automotive, paper, steel, and wholesale and distribution. Within the food and beverage sector, Intentia has developed a concentration in dairy, meat and poultry (fresh and frozen), condiments, and agriculture and feeds.
In addition to food and beverage and as indicated in figure 1, Intentia offers the Movex module for other related and diverse industries.
Figure 1
After
a strong performance through the 1990's, Intentia suffered a sudden drop in
total revenues upon entering into the new century (see figure
2). This was due, in part, to the soft market after the Y2K over-hyped phenomenon
followed by the global economic downturn, and the Intentia's platform-centric
approach of its Movex software, (addressed later in the text). Recent reports
have, however, indicated that Intentia is attempting to stem the tide and increase
revenues to return to profitability, while also developing an internal infrastructure
to increase and measure efficiency (such as deployment of consultants' utilization
system and sales lead tracking system), and reduce costs. For more details,
see an earlier research
note on Intentia at Intentia Braces for Its Ongoing Roller-Coaster Ride.
Figure
2
ERP
Functions and Features
Movex offers the standard functionality expected from ERP software to support manufacturing and back-office activities. The modules to support these activities include financial management (specifically general ledger (GL), accounts payable (AP), accounts receivable (AR), and fixed assets); financial control (specifically budgeting, cash flow, and standard and actual cost accounting); human resource (HR), specifically payroll and time and attendance; manufacturing; order taking; and customer service.
However,
there are several additional and integrated modules not normally found in an
ERP package. Optionally, Movex can encompass warehouse management (albeit for
very demanding warehousing environments one can also rely on the Manhattan
Associates' PkMS product, see Manhattan
Associates Partners with Intentia ), maintenance management and control,
logistic management, consolidations, and material safety data sheet (MSDS) management.
Having the flexibility to incorporate this functionality from a single vendor
can eliminate many of the interface issues when similar modules are purchased
from third party vendors. For example, when you purchase a third-party maintenance
management system, you would most likely get only an interface with your inventory
and purchasing systems so that you could procure needed but out-of-stock repair
parts.
With Intentia's Movex offering, additional interfaces to payroll (such as using hourly rates to calculate labor costs of repairs); human resource (such as matching an employee's skills with equipment being repaired); warehouse management (such as homogeneously slotting repair parts); and supply chain planning (SCP) (such as providing visibility to planned equipment downtime) now become available. Furthermore, this type of integration can facilitate the cost justification of acquiring and utilizing these optional modules.
As one would expect from software tailored to the process manufacturing industry, Movex ably supports the subtleties needed for food and beverage producers. Formulas are scalable so that production batches can be sized based on the minimum quantity of on-hand ingredients. Since formulas and pack recipes are maintained separately, Movex can accommodate so called brite stock and make-to-order (MTO) production runs.
The term, "brite" stock, is common for private label food processors. For example, large grocery chains sell products, such as soups, soda, and meats, under their own brand names, hence private labels. Don't think, however, that these chains have their own manufacturing plants. Chains contract for these products to be produced. In the case of soups, food processors create and warehouse non-descript, non-labeled aluminum cans of soup, hence "brite" stock. Once a confirmed order is received, the private labels are then applied in a separate packaging run. Finally, the models within Movex are sufficiently robust to accommodate promotional, volume, and regional pricing.
From an ERP perspective, Movex has several features that may put it ahead of the competition or, at least, will cause some eyebrows to be raised. As you would expect software serving the food industry, Movex offers catch weight functionality. By definition, catch weight is the recording of the actual weight of a product. For example, whereas a fifty pound case of meat lists for $100, in actuality the case is sold at $2 a pound based on the actual weight of the meat, less the packaging material. Accordingly, capturing of this actual weight, which can be used for pricing, is known as the catch weight of product. Movex takes the process one step further by using catch weight to calculate the actual cost of producing the product. Use of catch weight in costing is important because it provides a more accurate picture of production costs based on actual yields.
Movex supports attribute management on the input, ingredient side and on the output, product side. For inputs, attributes are maintained to define the characteristics of the ingredients used in a specific formula. For example, a critical consideration in making orange juice is the acidity of the oranges. Based on the acidity, other ingredients, such as sugar and water, may be varied to bring the resulting juice output into acceptable ranges. Consequently, knowing the acidity attributes of the oranges will enable you to modify the formula accordingly. Likewise, a customer may require meat products with a certain lean consistency. By maintaining the attributes of various cuts of meat, you will be able to match a product's attributes with requirements of your customers and provide the flexibility of offering appropriate substitutions in out-of-stock situations.
Intentia offers a fairly flexible pay-for-what-you-need pricing model. This is particularly valuable to the small- and medium-size enterprises that do not need the full functionality required by larger enterprises. For example, a company with only one division and one location would have little need for a financial consolidation capability. If this function was bundled in with the finance and accounting modules, your company could be paying for software it has no intention of using. Fortunately, in the Movex suite modules can be decoupled, removed from the software equation via configuration parameter switches, and, equally importantly, from the cost of the software. For such modules as warehouse management, computerized maintenance management, personnel skills management, and others, the customer can selectively determine the modules benefiting their organization and structure the software contract accordingly.
This concludes Part One of a three-part note.
Part
Two will discuss functions and features for SCM.
Part
Three will make observations and user recommendations.
About
the Authors
Predrag
Jakovljevic is a research director with Technology Evaluation Centers,
Inc. (TEC), with a focus on the enterprise applications market. He has over
fifteen years of manufacturing industry experience, including several years
as a power user of IT and ERP, as well as being a consultant/implementer and
market analyst. He holds a bachelor's degree in mechanical engineering from
the University of Belgrade, Yugoslavia, and he has also been certified in production
and inventory management (CPIM) and in integrated resources management (CIRM)
by APICS.
Joseph
J. Strub has extensive experience as a manager and senior consultant
in planning and executing ERP projects for manufacturing and distribution systems
for large to medium-size companies in the retail, food & beverage, chemical,
and CPG process industries. Additionally, Mr. Strub was a consultant
and Information Systems Auditor with PricewaterhouseCoopers and an applications
development and support manager for Fortune 100 companies.
He
can be reached at JoeStrub@writecompanyplus.com.