by Lora Cecere on October 25, 2013 · 1 comment

Last week, I wrote about the evolution of supply chain planning. In my blog post, I commented on HOW little supply chain planning has  changed in its twenty-year evolution. As I worked with clients this week, I had a long and hard talk with myself. I am part of the problem. I, like other analysts, are stuck in the traditional software APS paradigm.

In this post, I want to pay homage to trailblazers. This post is a commentary to companies that are challenging the traditional Advanced Planning System (APS) paradigms and trying to forge a new path.  As a start-up, I understand how hard it is to pave a new road forward. Here I share insights on four enterprise solutions. (Next week, I will focus on the new forms of business networks that are evolving.)

1) Kinaxis. The Kinaxis solution is probably one of the most misunderstood supply chain planning platforms. With its origins in “fast MRP”, the company has gone through multiple name changes to establish an identity and gain market traction.  It is a flexible, in-memory model and platform that enables visibility, demand and supply balancing, what-if analysis, allocation and available-to-promise (ATP) functionality. Throwing APS tradition to the wind, Kinaxis branded under the term “rapid response” five years ago and has recently been pushing the promise of the Supply Chain Control Tower.

In leaving the Kinaxis user meeting this week, I am struck by three things.  First, their recent work on mobility and defining the user experience on a mobile application is very cool. Secondly, the flexibility of the Kinaxis solution makes the product hard to message, but the clients that have figured it out, are very happy.  (Some of the happiest….) And, third, the solution is most often deployed in material-intensive supply chains for what-if simulation and visibility. It is a cloud-based solution that scales easily for hundreds of users. It has helped many clients that were too constrained by the inflexibility of the traditional APS platform.

At the conference, Kinexions, I heard many clients speaking freely about the deployment of Kinaxis and the turning off of Oracle and SAP APS solutions.  Many were almost giddy. The ease-of-use of the Kinaxis system was freeing for their teams.

2) Logility. I like the work that Logility has done in the redefinition of demand planning. Their work on New Product Profiler (a product to forecast a new product) and on attribute-based planning termed Proportional Profile Planning is very encouraging. It should be considered by all Logility customers struggling with demand accuracy in new product launch and promotion management.

3) Solvoyo. This week, I also spent time in Istanbul discussing the evolution of concurrent planning with some of the best minds in supply chain operations research.  Many of you may recall the great work that Koray Dugan and Omer Bakkalbasi did at i2 Technologies.  They are now teamed together working on the development of concurrent planning.

Essentially, the team is removing the partitions between network design, sales and operations planning (S&OP), inventory optimization, fulfillment and transportation planning. Originally, supply chain planning had to be compartmentalized to enable optimization solvers to run within a feasible timeframe. However, with the advent of cloud computing and more advanced optimization techniques, the team at Solvoyo is using parallel processing in the cloud at Amazon to provide decisions on demand (Software as Service that delivers the output and decisions integrating with the client’s existing software). As a result, the solution is solving inventory, transportation, and fulfillment in one model across strategic, tactical, operational, and executional horizons.  Is this important? Yes for three reasons…. The depth of the solution, a more scalable solution, and the bringing of the decisions on demand helps companies that are struggling to get and retain talent.

Inventory problems solved in isolation have had little adoption. Inventory needs to be part of a deeper, more connected solution. The Solvoyo technologies allow users to evaluate the form and function of inventory in network design and connect it to fulfillment and transportation planning. For an old gal in supply chain planning, I love seeing a new definition of supply chain planning.

4) Terra Technology.  Terra Technology has dubbed its solution demand sensing and with twenty consumer goods companies using the solution, the company is attempting to gain new clients in distribution-centric industries that are not consumer goods (e.g. distribution, chemical processing. food manufacturing and apparel). The solution replaces rules-based forecast consumption improving the translation of demand from a tactical forecast to a more useable and accurate demand signal for fulfillment. Companies using the Terra solution are averaging a 10% reduction in inventory on the balance sheet and an improvement in customer service fulfillment. However, despite seven years of product marketing, the company is still not well understood by prospects requiring ongoing dialogues with the buyers.

While the replacement of rules-based demand consumption, may seem like a small thing, the impact is significant, and the math has not been matched by the several want-a-be competitors that have tried….

Each of these companies have attempted to blaze a new trail in their own way. They are fighting bigger competitors that have done less platform innovation that charge much more for their solutions, but are more aggressive in marketing. Additionally, the higher costs of the extended ERP solutions makes them much more desirable for large system integrators to implement and recommend.

As I sit in seat 16C on a packed plane winging my way to Minneapolis, I just wanted to raise my glass and applaud the innovators. Hopefully, you will check them out too….

Next week, I will be in New York on Monday and at the Consumer Goods Technology (CGT) conference. I hope to see you in my travels….



The websites are swept clean. The messages are honed. The Wikipedia pages are aligned. The E2open marketing machines are spinning. The blogs, social media networks, and pundits are whirring with predictions and accolades. I watch with a bit of amusement, and want to offer a bit of caution.

Let me start with a disclaimer. The Shaman is a curmudgeon. She cannot count the number of SCM software  acquisition announcements that promised 1+1=10. In short, this never becomes the reality.  Very few software acquisitions reach their potential. The ones that do can be counted on one hand. However, I like this acquisition. It will make E2open more relevant and could accelerate the evolution of a new form of marketplace offering. The supply chain management market is troubled and needs some excitement.

icon-scm was founded in 1992. The product, a licensed offering, was designed to enable a “rapid response” of what-if analysis in material-centric discrete supply chains. The company partnered with SAP to launch a product offering, SAP Supply Chain Response by icon-scm, in 2010. SAP company passed on a thirty-day period of first refusal to acquire the asset allowing the purchase by E2open on July 31st, 2013. This licensed software offering was purchased at slightly under 3X revenues. In 2012, icon-scm had revenues of approximately $10 million. The product was used to improve supply chain decisions in discrete manufacturing companies like Avnet, Hewlett-Packard, Pratt & Whitney, and Western Digital.

Based in Germany, icon-scm and the company leadership team was driven by a very product-based mentality. The company was never good at marketing. The company name is hard to say and for client’s to remember. < I liken it to the Johnny Cash song, A Boy Named Sue. The company was born into the world with a tough name and faced a tough uphill battle. The founders bet the future of the company on the SAP partnership. The results were disappointing for both parties.>

Over the last decade, the German-based company was never able to successfully compete with the more aggressively marketed Kinaxis solution. There was a strong preference in the market for a Software as a Service (SaaS) offering, and Kinaxis was quick to claim that position. SAP’s marketing of icon-scm was one of the most confusing marketing positions in the history of supply chain software. The tension between the SAP sales team to position SAP APO and SAP Supply Chain response by icon-scm was always tough.

With all of this as a preamble, and background, let me share five reasons why I think that you, as a supply chain leader, should care:

  1. Execution is key. E2open users need to get involved. When the hype settles, it will be all about execution for E2open. With all software acquisitions, there are trade-offs. The E2open client base is a very loyal long-term user base. Now is that time the E2open client base needs to get very involved with E2open management to ensure that product roadmap trade-offs are in their best interest. Act now to avoid a surprise. I expect E2open to continue to acquire additional assets and built a stronger presence in the supply chain market.
  2. Marketplace offerings are gaining steam. The race is on. A new form of marketplace offering is emerging.  The battle lines to build inter-enterprise supply chain solutions are drawn. SAP is betting on the Ariba platform. Elemica, E2open and GT Nexus are improving their solutions, working on aggressive product solution platforms to provide new value.  Each has a different, and improved, position to improve value chain network visibility and analytics. My bet is on the evolving best-of-breed provider landscape. <I find it hard to see the value in using the Ariba network that was designed for indirect procurement to seize this market opportunity.>
  3. Validation of Rapid Response as a market is good news for Kinaxis. The Canadian planning vendor, Kinaxis, pioneered the concepts of Rapid Response early in the decade. They were one of the first SCM vendors to move to a SaaS model. It was a gutsy, but right, move. The company has waged a tough market battle for recognition. The acquisition of icon-scm by E2open now makes them official competitors and validates the space. The building of icon-scm functionality into the E2open platform should be a wake-up call for Kinaxis to move quickly to evolve their strong cloud-based architecture to a one-to-many and many-to-many data model to serve the emerging marketplace opportunity. It is my hope that they get more serious about their relationship with GT Nexus.
  4. SAP partnerships have less meaning. icon-scm and SAP partnered in 2010. It was a “preferred partner” with formally announced intentions to incorporate the Rapid Response functionality into its supply chain management capabilities as an SAP Solution Extension Partner. The partnership was on the official SAP product roadmap. It drove the buying decisions of many a CIO.  While the press will say that SAP will continue to support this application, over time, clients will have to rethink their platforms to migrate to E2open or to embrace Kinaxis. SAP is betting on their new solutions based on the Ariba Network.
  5. SAP loses momentum to drive value for supply chain leaders. The right acquisition would have been SAP’s acquisition of E2Open and public disclosure that SAP APO and SAP SNC have not lived up to their promise. In my opinion, the SAP teams need to rewrite their applications to meet clients’ needs. They are losing market relevance.