IBM Builds Stronger AS/400 Links in Supply-Chain Market
The infusion of e-commerce has changed the competitive landscape for many manufacturers, forcing them to look to new technologies to improve their performance and speed to market. One of those areas benefiting from the growth of e-commerce is supply-chain planning, which is often integrated into ERP systems.
Supply-chain products automate the flow of goods from the point of design to the point of sale. The worldwide product-supply-chain vertical applications industry reached $13 billion market in 1998, and will become a $22.9 billion industry by 2003, according to IDC (Framingham, Mass.).
Recognizing that many AS/400 sites support ERP and potential supply-chain architectures, IBM recently teamed with SynQuest
to introduce an advanced planning and scheduling e-business solution for the AS/400. SynQuest's Manufacturing Manager Software is designed to integrate operational planning and execution across a supply chain.
"This is one of the earliest advanced planning and application suites on the AS/400," says Tom Burnett, solution manager for IBM's small and medium business sector. IBM and SynQuest will be targeting companies that have an installed ERP system, with sales between $100 million and $2 billion. The solution is designed to help companies address three issues: optimizing the ordering of parts on the incoming side, overcoming production obstacles in plants, and meeting customers' needs.
"We've had AS/400 customers who had to purchase other platforms to run our products on and they weren't too happy about it," says Chris Jones, senior VP of marketing and corporate development for SynQuest. "When IBM approached us about making a solution for the AS/400, we though it was a great idea. Supply chain is still an emerging marketplace, but it's moving into the mainstream and e-business is fueling it."
Along with IBM and SynQuest's solution, other companies are also looking to take advantage of the expected surge in the supply chain market. One newly formed company, Intrepa, LLC (Mishawaka, Ind.), has purchased the Logistics PRO supply-chain product line from CIBER Inc. All of the 70 plus employees of Intrepa formerly were employed by CIBER. "We always believed that if we pulled out Logistics PRO separately, then it would have a chance to be more popular," says Tim Conroy, CEO of Intrepa. "Plus, the market is wide open, with the leading company only having six to eight percent of the market."
A warehouse and transportation management system, Logistics PRO--which runs on the AS/400--fits right into the supply chain. There are two separate products, Logistics PRO Warehouse Management System (WMS) and Logistics PRO Transportation Management System (TMS). The most current version is Logistics PRO 4.1.
Intrepa will be concentrating on adding e-business functionality in the next release, scheduled for the second quarter of 2000. "E-business functionality is the future of supply chain," says Conroy. "E-commerce has created an increase in the number of orders and transactions a company has to handle and it's forcing companies to look at supply chain because they have to meet the needs of their customers."
Another supply-chain vendor, EXE Technologies
(White Plains, N.Y.) has also teamed with IBM to provide supply-chain solutions that will run on the AS/400. The solutions will initially target the automotive, consumer-packaged goods, retail and wholesale distribution industries.
A few months ago, J.D. Edwards (Denver) added supply-chain capabilities to its product offerings. Following its acquisition of Numetrix Ltd. in June, JDE integrated the Numetrix supply-chain solution into OneWorld enterprise software suites. "This integration enables our customers to rapidly achieve significant competitive advantage by strengthening their e-business model with the Numetrix supply-chain solutions," says Michael Schmitt, senior VP of worldwide sales and marketing at JDE.