To increase market share, vendors are expanding and offering more services to customers. On one hand, enterprise resource planning (ERP) vendors are adding such functionality as warehouse management systems (WMS) and transportation management systems (TMS) into their suites; on the other hand, supply chain management (SCM) vendors are including business intelligence (BI) or supplier relationship management (SRM) functionalities in their applications. Consequently, the IT market is seeing a convergence of functionality for ERP and SCM systems.

In pushing downward into the supply chain space, ERP vendors are incorporating such additional functionality as product lifecycle management (PLM), SRM, advanced planning, WMS, TMS, event and performance management, labor, slotting, yard management, and radio frequency identification (RFID) to their ERP product suites. This business model of ERP vendors pushing downward has expanded, and it is consuming valuable supply chain execution (SCE) market share. This is in accordance with market demand, as organizations are now expected to have one system to address all needs collaboratively.

This article examines the upward push of supply chain vendors into the ERP space and the downward penetration of ERP into the supply chain market, as well as the overall impact on the market.

The Downward Push of ERP Vendors

ERP vendors are expanding their market share at the expense of SCM vendors. ERP solutions encompass a wide range of functionality that includes most of the business processes of an organization. Traditional modules like accounting, BI, customer relationship management (CRM), advanced planning and scheduling, manufacturing, warehousing, and shipping are all standard ERP offerings today.

Most ERP functionality is usually stronger within a particular function of the enterprise (such as financials), while accommodating the other functions within its infrastructure. Other business functions within the ERP infrastructure are incorporated within the same platform, and there is no need for additional interfacing between each operation. Although ERP software covers many modules, its functionality within a module may vary widely, and may not incorporate an adequate level of detail for a particular function like an engineered-to-order product.

Many organizations have elected to implement best-of-breed SCE software on top of their current ERP system to address the shortcomings of functionality within the supply chain. An example where additional functionality was needed in the warehouse is Indigo Books & Music. Indigo implemented SAP corporate-wide, and then had to install an additional WMS (HighJump) to cater to its warehousing requirements. This is common for other companies, such as Nike, Daydots, and 99 Cents Only Stores, where ERP systems have been installed along with WMS solutions to manage the warehouse.

Companies like Catalyst, HighJump, Manhattan Associates, and RedPrairie have all interfaced to SAP successfully, and Catalyst is even approved by SAP for its interface between the WMS and the ERP. Generally speaking, new SCM functionality now incorporated into the ERP products is more detailed and stable from a platform and functionality aspect.

This new level of functionality incorporated within ERP may be the element that is currently missing to handle today’s increasing need for real-time information and accuracy. Tier one vendors, aware that their solutions were lacking in detailed supply chain functionality, have spent extensive research and development resources to improve these shortcomings. SAP, for instance, has dramatically increased functionality within its WMS offering.

Figure 1 outlines most of the traditional functionality included with most ERP and SCM systems software.


The left-hand side of the chart shows traditional ERP modules, and the right-hand side displays typical SCM functionality. Within each of these modules, there are submodules, as in advanced demand planning (outlined in gray). In demand management alone, several components that were not previously included in earlier versions of ERP have now been incorporated. Likewise, within SCM software, modules such as BI, manufacturing, and SRM are now included as part of SCE software.

The SCM Push Upward

Supply chain vendors of the past only provided a single product that addressed one aspect or function within the supply chain. However, certain business requirements have become the norm, such as vendor collaboration, changes in workflow, event management, performance management, PLM, labor requirements, key performance indicator (KPI) analysis, real-time inventory, manufacturing execution systems, WMS, transportation requirements, advanced planning and scheduling, and partner-supplier collaboration. SCM vendors feeling the tightening of the market have started to address their shortcomings, and are including more ERP-like modules to expand their solutions.

SCM software traditionally employs a strategy of covering everything within the four walls of the warehouse. The addition of ERP modules aims at tying into the entire supply chain and its collaborative aspects. Trading partners (and now logistic companies) are coming together with manufacturers to unite services, products, and customer experience. Demand management and SRM are intricate parts of SCE, and tier one vendors like HighJump, RedPrairie, and Manhattan Associates have now included very detailed iterations of this module.

Since detailed information is required, most tier one WMS vendors, and even the smaller vendors (ASI, Radio Beacon, RF Pathways, and Scancode) within the SCM space, have also added and developed new functionality to compete with this shift in business model.

For example, HighJump has evolved to fit this shift in business strategy and technology. Its initial offering was a best-of-breed WMS. HighJump’s WMS competes with Manhattan and RedPrairie, and all three vendors now offer a full suite of SCE products (see figure 2).


SOURCE:
http://www.technologyevaluation.com/research/articles/squeeze-play-in-the-supply-chain-management-market-19481/

To increase market share, vendors are expanding and offering more services to customers. On one hand, enterprise resource planning (ERP) vendors are adding such functionality as warehouse management systems (WMS) and transportation management systems (TMS) into their suites; on the other hand, supply chain management (SCM) vendors are including business intelligence (BI) or supplier relationship management (SRM) functionalities in their applications. Consequently, the IT market is seeing a convergence of functionality for ERP and SCM systems.

In pushing downward into the supply chain space, ERP vendors are incorporating such additional functionality as product lifecycle management (PLM), SRM, advanced planning, WMS, TMS, event and performance management, labor, slotting, yard management, and radio frequency identification (RFID) to their ERP product suites. This business model of ERP vendors pushing downward has expanded, and it is consuming valuable supply chain execution (SCE) market share. This is in accordance with market demand, as organizations are now expected to have one system to address all needs collaboratively.

This article examines the upward push of supply chain vendors into the ERP space and the downward penetration of ERP into the supply chain market, as well as the overall impact on the market.

The Downward Push of ERP Vendors

ERP vendors are expanding their market share at the expense of SCM vendors. ERP solutions encompass a wide range of functionality that includes most of the business processes of an organization. Traditional modules like accounting, BI, customer relationship management (CRM), advanced planning and scheduling, manufacturing, warehousing, and shipping are all standard ERP offerings today.

Most ERP functionality is usually stronger within a particular function of the enterprise (such as financials), while accommodating the other functions within its infrastructure. Other business functions within the ERP infrastructure are incorporated within the same platform, and there is no need for additional interfacing between each operation. Although ERP software covers many modules, its functionality within a module may vary widely, and may not incorporate an adequate level of detail for a particular function like an engineered-to-order product.

Many organizations have elected to implement best-of-breed SCE software on top of their current ERP system to address the shortcomings of functionality within the supply chain. An example where additional functionality was needed in the warehouse is Indigo Books & Music. Indigo implemented SAP corporate-wide, and then had to install an additional WMS (HighJump) to cater to its warehousing requirements. This is common for other companies, such as Nike, Daydots, and 99 Cents Only Stores, where ERP systems have been installed along with WMS solutions to manage the warehouse.

Companies like Catalyst, HighJump, Manhattan Associates, and RedPrairie have all interfaced to SAP successfully, and Catalyst is even approved by SAP for its interface between the WMS and the ERP. Generally speaking, new SCM functionality now incorporated into the ERP products is more detailed and stable from a platform and functionality aspect.

This new level of functionality incorporated within ERP may be the element that is currently missing to handle today’s increasing need for real-time information and accuracy. Tier one vendors, aware that their solutions were lacking in detailed supply chain functionality, have spent extensive research and development resources to improve these shortcomings. SAP, for instance, has dramatically increased functionality within its WMS offering.

Figure 1 outlines most of the traditional functionality included with most ERP and SCM systems software.


The left-hand side of the chart shows traditional ERP modules, and the right-hand side displays typical SCM functionality. Within each of these modules, there are submodules, as in advanced demand planning (outlined in gray). In demand management alone, several components that were not previously included in earlier versions of ERP have now been incorporated. Likewise, within SCM software, modules such as BI, manufacturing, and SRM are now included as part of SCE software.

The SCM Push Upward

Supply chain vendors of the past only provided a single product that addressed one aspect or function within the supply chain. However, certain business requirements have become the norm, such as vendor collaboration, changes in workflow, event management, performance management, PLM, labor requirements, key performance indicator (KPI) analysis, real-time inventory, manufacturing execution systems, WMS, transportation requirements, advanced planning and scheduling, and partner-supplier collaboration. SCM vendors feeling the tightening of the market have started to address their shortcomings, and are including more ERP-like modules to expand their solutions.

SCM software traditionally employs a strategy of covering everything within the four walls of the warehouse. The addition of ERP modules aims at tying into the entire supply chain and its collaborative aspects. Trading partners (and now logistic companies) are coming together with manufacturers to unite services, products, and customer experience. Demand management and SRM are intricate parts of SCE, and tier one vendors like HighJump, RedPrairie, and Manhattan Associates have now included very detailed iterations of this module.

Since detailed information is required, most tier one WMS vendors, and even the smaller vendors (ASI, Radio Beacon, RF Pathways, and Scancode) within the SCM space, have also added and developed new functionality to compete with this shift in business model.

For example, HighJump has evolved to fit this shift in business strategy and technology. Its initial offering was a best-of-breed WMS. HighJump’s WMS competes with Manhattan and RedPrairie, and all three vendors now offer a full suite of SCE products (see figure 2).


SOURCE:
http://www.technologyevaluation.com/research/articles/squeeze-play-in-the-supply-chain-management-market-19481/