Joint Venture Yields Integrated Supply Chain Solution
J.D. Edwards & Co. (Denver) and
SynQuest Inc. (Atlanta) have teamed up with IBM to develop Supply Chain Advantage, a fully-integrated supply chain e-business solution for the industrial fabrications and assembly industries (IFA).
"We realized that by combining our abilities, we could offer customers a solution that was a lot better than what we could offer individually," says Doug Willis, IBM Global Services global offering executive for J.D. Edwards' practice. "This was a market that all three companies had experience in, and it was a market that we all saw as underserved."
Supply Chain Advantage delivers its solution through a bundle of hardware, software and services that run on IBM's AS/400, RS/6000 and Netfinity servers. Capitalizing on a growing trend in the market, many of the features in Supply Chain Advantage come pre-integrated. IBM Global Services pre-assembles J.D. Edwards OneWorld Software with SynQuest's advanced planning, scheduling and execution software, as well as IBM Net.Commerce e-business software and ERP Bridge data collection software. "All of these things together add up to a nice bundling of benefits together," says Pierre Mitchell, senior analyst of enterprise applications strategies for
AMR Research (Boston).
Mitchell gives Supply Chain Advantage high marks, specifically for its schedule reliability, limiting disruptions on the shop floor, and improving the capacity and overall performance. "I see good things with this initiative, and I think it will be a success," he says. "The companies have worked very well together, and it has all the right components."
The target market for Supply Chain Advantage is IFA companies with sales from $150 million to $2 billion and licenses between 25 to 1,000. The "sweet spot" is companies with sales between $200 and $800 million and licenses between 300 and 350.
Reed says he expects the AS/400 to be a solid platform for Supply Chain Advantage. "The AS/400 is very strong in the mid-market IFA marketplace," he says. "We feel it's a strong platform for this solution and that AS/400 users will implement this solution." Mitchell says the AS/400 held steady for ERP systems in 1998, with the OS/400 growing from a share of 18 percent in 1997 to 20 percent in 1998.
Some of the key features in Supply Chain Advantage are its e-business functionality and a J.D. Edwards tool called
ActivEra Idea to Action. "The e-business capabilities distinguish the solution," says Joel Reed, senior marketing manager with J.D. Edwards. "Companies will mostly use it for business-to-business [transactions], giving them tight linkage to their suppliers, which improves their supply chain." Willis shared similar sentiments, mentioning that they put an emphasis on strong e-business offerings because most analysts agree that this is what ERP customers need.
ActivEra Idea to Action is designed to allow companies to adjust Supply Chain Advantage as their company and the market changes. "A lot of times in ERP solutions the company changes, but the software doesn't," Willis says. "We talked with a number of prospects, and this is what they're after."
Another area the three companies are promoting is fast implementation time, which Reed and Willis put at six to seven months. While Mitchell says AMR expects the average time to be closer to 10 months, he adds that is still fast considering, "It would take between 18 to 26 months if a company had purchased each solution separately."
Supply Chain Advantage gives customers two options for providing up-front analysis of an ERP project's costs and scope. Through a fit analysis, IBM Global Services makes sure the solution makes sense for the customer then establishes the scope along with expected value benefits. At no charge to the customer, IBM Global Services visits the prospect's site for two to three days and looks for areas they can improve. This process, called a Value Opportunity Assessment (VOA), identifies a projected return on investment (ROI) and establishes measurements for implementation success.
One of the things that make the solution unique is that it requires a lot of work from the customer, AMR's Mitchell says. "They actually take something like seven to nine people from an organization and bring them to Atlanta--IBM SolutionWorld Implementation Center--for five to seven weeks to assist in configuring the solution," he says. "That's unique because it requires companies to make quite a commitment, having some of their top people out of the office for that time. But it's great for the customers because the company team will be able to train the rest of the organization and be knowledgeable about the product, and that's not something you see that often."
According to Mitchell, the price of Supply Chain Advantage may seem very steep to prospective customers. However, he says the high price tag will be offset by the reduced total cost of ownership the solution will provide. "Customers have to really understand the benefits and buy into the ROI up front."
IBM's Willis adds that the three companies are looking into developing a supply chain solution for other industries, specifically automotive and electronic. Mitchell, for one, expects it to happen in the near future. "The key thing is they have already developed the solution, so I think they'll extend the solution to other markets easily."