Supply Chain inter-enterprise platforms support end-to-end transactions and collaboration.
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Fact: supply chains weave between and within enterprises. Everybody knows that. And reflective of that is the ever-growing inter-enterprise supply chain network-provider market. In the past, users looked to these as single function, yet inter-enterprise, applications such as collaborative planning, transportation coordination (and so on), with communication and visibility aids.1 But today they represent full applications for managing internal and external activities that weave inter-enterprise and complex processes together. Examples of this concept would be planning, procurement, transportation; or design, make, service.
These solutions are cloud-based and managed by third-party solution providers who take it upon themselves to create and manage the network of relevant partners. For example, a transportation network would seek out all the carriers and 3PLs. Or supplier information management (SIM) solutions would seek out and create a rich directory of suppliers. They would also ensure that they have all the protocols and standards for communication among the relevant ‘big players’ in an industry such as major OEMs or retailers. This established network, of course, reduces the amount of work users must do to manage all these integration points, and speeds up onboarding/implementation. This focus allows the solution provider to provide a many-to-many environment for complex coordination among multiple parties that is so typical of supply chains today.
But getting to this state of excellence and completeness has required an awakening—a real Renaissance in the supply chain market, beyond modular applications and point-to-point communications.2
The 1990s saw the emergence of a supply chain market. And at that point, we were still developing processes, code, algorithms and such, creating the many options we have today for forecasting, scheduling, optimizing, routing and so on. That work needed to be done. Though we knew that supply chain, de facto, was inter-enterprise, we only had EDI to help create the linkages. The internet represented that era of ‘the middle ages,’ when we could leverage this new medium, but solutions were still point-to-point. Portal and XML augmented EDI. It took a few years until the real age of freedom of ideas on the web and a more open approach to managing business led us to accept multi-party visibility and a real sharing of information. A Renaissance of the supply chain began. Applications we could not have envisioned (visibility and location intelligence); or some we could (end-to-end processing), but did not have the tools for, began to flourish.
This next decade, 2000 until (really) the present, represents that Renaissance period. We have moved beyond the applications to a network of multi-party, multi-functional—inter-enterprise supply chain solutions.
These solution firms do have focus areas. Their core strength is key to their business strength. The vision was there for a broader platform.3 For example, I attended an event at the launch of One Network, in 2002, in a trendy club in NYC. Greg Brady, Founder and CEO, painted a bold vision of a network connecting all supply chain functions, as well as a rich trading network by industry (all the customers and all their suppliers) interacting across the network from procurement to receipt. Talking to Greg recently, he stated, “It has taken a while.” However, today, ONE can boast about the fulfillment of such a vision in markets such as grocery, with major grocery retailers, food companies and logistics partners processing millions of transactions from demand through delivery, while fine tuning inventory accuracy.
Another example is Amber Road. Starting life as Management Dynamics in the 1990s, they were a major partner to other supply chain software firms providing a Global Trade Management (GTM) solution and content. Their path has been quite dramatic and gutsy. In the early 2000s, they moved beyond the almost silent partner of other well-know SCM branded companies to step out and sell direct, change the name, build out the application beyond GTM and then go public! This journey, also over 14 years, maybe did not start with the broadest vision, but in talking to Nathan Pieri, Chief Product Officer (from early days at the firm), and Scott Byrnes, Vice President, Marketing, who joined the company pre-Amber-renaming days, they acknowledged that many of these break out decisions, though fraught with risk, have worked out for them.
Amber Road, now public, has the funds to expand further. Note their recent acquisition of ecVision, taking them beyond GTM and transportation functionality back to the source (the manufacturer/supplier) for more process and information coverage—procurement, manufacturing, and quality, for example.
The lesson here is that the changes in the solutions and market we are talking about also require time to amass the capital to achieve the vision.
Descartes Systems has taken a slightly different path forward than the above firms, with growth from acquisitions. The early player in the network game, they went public during the go-go dot.com days, and boasted explosive sales. Their Global Logistics Network (GLN) integrates many communications protocols as well as business applications into a holistic end-to-end solution with a focus on global trade and transportation. However, they recently raised over $100 million of new cash to fuel additional acquisitions. Of late, they set their sights on the import/export, Global Trade Management market with acquisitions such as the leading Customs Info, as well as munching smaller acquisitions such as Pentant and e-customs, two UK-based trade management solutions companies.
The Center of the Platform
Even today, the core is central to these companies. In Figure 1 and Table 1 we show the ‘starting places’ or roots of these firms and where they have expanded to. Like most tech solutions, they did not support all processes or roles in the industries they operate in. Their solutions perhaps fit carriers or manufacturers or retailers. For example, carriers are well served by a Descartes and or GT Nexus visibility and other transportation functions. Or high-tech manufacturing may be served by e2open, who actively schedule and plan between OEMs and contract manufacturers; Amber Road for apparel manufacturers who have many trade restrictions; One Network for grocers/food networks or the military; consumer products and retailer collaboration with Logility; or direct procurement from TAKE Supply Chain.
Amber Road’s acquisition of ecVision expands the solution beyond Global Trade and Transportation management to create what they call an Enterprise solution to include supplier management functions such as manufacturing planning, risk management and quality.
Ongoing acquisitions such as Customs Info expand Descartes’ Customs, Regulatory and Compliance offering and enrich its inter-enterprise network platform, GLN, which includes global transportation, TMS, Broker/Freight Forwarder solutions and their organically developed Community which fully integrates with the GLN.
One of the earliest players in the Collaboration platform market, Logility’s Value Chain Collaboration integrates functions from planning through transportation coordination. Also not sold as multi-tenant.
Investor Warburg Pincus underwrote the merger of GT Nexus and Tradecard, expanding the solution from retail functions such as procurement, trade finance, and traceability, to include robust ocean shipping. Their leading trade finance has over 150 global financial institutions to reduce friction and cost in the supply chain. GT Nexus included many of the major global manufacturing shippers, carriers and retailers.
PTC’s acquisition of Servigistics and partnership with First Insight
Now blended into DELMIA (a manufacturing suite) and ENOVIA (the social Collaborative Innovation suite) Dassault’s portfolio allows product companies to communicate with contract manufacturers for processes from design to manufacturing.
Their Real Time Value Network supports demand through logistics visibility, allowing for procurement collaboration, coordination of inbound freight through direct store delivery, inventory management, and visibility.
From their early days, ClearOrbit (an acquisition of TAKE Solutions, Ltd., an Indian technology conglomerate) was a mobile and collaboration solution for fulfillment. In 2009, TAKE Solutions acquired EntComm, a leading provider of B2B planning collaboration solutions, extending their solutions to provide multi-platform B2B communications and internal enterprise integration. Of late, TSC has added direct procurement to their platform.
Table 1: The Evolution of Supply Chain Software Providers
Part of the allure is the established networks which bring together the buyers and sellers and supporting players—customers, suppliers, and logistics: Descartes' GLN has over 140K members, E2open 30K, GT Nexus 44K, and so on.4 These networks not only provide communication and visibility, but also integrate the core applications. End-users today may use many of these networks since they may use one for collaborative planning or another for logistics. Though providers are working towards being the only choice, it is unlikely this will happen, since the dominant retailers or OEM customers often have a well-established presence with these networks. For example, Kroger with One Network (they have been a customer for over 10 years); or CAT (Caterpillar) with GT Nexus; or Baker Hughes with TAKE. Major customers of these networks use them as their own supply chain network solutions and drive their trading partners to these sites to interact.
Today we are seeing these supply chain inter-enterprise solutions flourish. Catalysts for their growth are both the trend of cloud as well as continued outsourcing activities. As companies continue to extend their processes across multiple trading partners, working in federated business models, these solutions will take on more and more importance as the core of the value chain of product, brand, and retail enterprise.