Supply chain software evolves dramatically

There are clear signs of a breakthrough in the use of cloud-based supply chain software. Two important application areas are transport planning and sales & operations planning. Furthermore, we are seeing strong growth in software for demand-driven MrP and there are a few cases of production planning being done in conjunction with suppliers. The growth of e-commerce is creating increased demand for order management software. As supply chain networks become ever-more complex, risk management software is becoming desirable or even essential. The 2017 version of Supply Chain Movement’s SCM IT Subway Map visualizes these developments.

[Downloadform below this article]

At European level, the use of supply chain software is advancing at different speeds. Many companies are still working on implementing software to support their periodic sales & operations planning (S&OP) decision-making process. It has long been clear that this solution does not necessarily have to come from the same vendor as the ERP system – which often tends to be from SAP, Oracle, Microsoft AX or Infor. When choosing the best sub-solution, a best-of-breed approach is most logical now that various software can be integrated – including with cloud-based solutions – relatively easily.

The use of supply chain software in the cloud is clearly becoming more commonplace, especially in transport planning and S&OP. More and more suppliers of exclusively cloud-based solutions are starting to gain a foothold within companies. The traditional software vendors are also increasingly seeing a shift from on-site/onpremise solutions to the cloud. Following the recent acquisition of Steelwedge, an American supplier of S&OP in the cloud, E2open has moved into the global top five of specialized supply chain software suppliers and is the only one without an ERP solution.

Modern approach to planning

Two clear supply chain planning trends are apparent. Demanddriven manufacturing resources planning (DDMRP) is strongly emerging as an alternative to traditional MRP, the basis of ERP, with fixed lead times. Various suppliers have made their software suitable for this modern approach to production planning which enables lead times to be calculated and taken into account. Consulting firm Camelot has even developed a DDMRP add-on for SAP which it is implementing for a medical devices multinational. Besides this, companies are increasingly basing their production planning on their own capacity plus that of their suppliers. Chemical giant BASF is currently running a pilot in which the software from the Canadian vendor Kinaxis takes care of the planning of the raw materials sourced from supplier 3M. Similarly the Danish  fashion company Bestseller, known for its retail chains Jack & Jones, Vero Moda and Only, includes the available production capacity of jeans manufacturers in Italy and Turkey in its planning using the Logility software.

New types of applications

It would seem that the software market for order management and supply chain risk management is attractive. MP Objects, a Dutch supplier of order management solutions, and Riskmethods, a German supplier of supply chain risk management solutions, have both recently secured extra funding for international growth – of EUR10 million and EUR13.5 million respectively.

One completely new type of supply chain software emerging is the self-configurable platform which enables the creation of an optimization model for a wide range of advanced analysis. Successful suppliers of such platforms for predictive and prescriptive analytics include Aimms, Locom and River Logic.

Download: SCM IT Subway Map Europe 2017

I accept the Terms & Conditions