Part 1 of this series analyzed the late-March acquisition of long struggling inventory optimization (IO) provider Optiant by long well-performing supply chain management (SCM) provider Logility. The blog post then discussed Logility’s acquisition history to set the stage for the current offerings that Optiant will join.
The 2004 acquisition of Demand Management, Inc. (DMI) and its Demand Solutions brand was particularly valuable as it provided more than 800 active customers in the growing small and midsize enterprise (SME) market for Logility. Today, Logility’s customer base encompasses about 1,250 companies located in more than 70 countries.
These facts give Logility the largest installed base of supply chain planning (SCP) customers among application software vendors. Logility is possibly the only SCP vendor that can meet the needs of SMEs, large companies (i.e., from US $200 million to US $1 billion in revenues), and Fortune 1000 markets (with over US$1 billion in revenues).
Catering to Both the Big and Little Guy
Logility markets and sells the Demand Solutions product line [evaluate this product] to the SME market through DMI’s global value added reseller (VAR) network of over 30 distributors. Demand Solutions’ simple-to-install and easy-to-use SCP software provides a smooth transition for smaller companies from “pedestrian” spreadsheet management to more sophisticated reporting and tracking.
The Demand Solutions application suite makes it easier to predict future demand and make informed decisions to optimize inventory turnovers, customer service levels, and profitability. The Demand Solutions suite is a time-phased, multi-tiered planning and replenishment system and a platform for vendor managed inventory (VMI). The suite, which helps manufacturers, wholesalers, and distributors exchange information for inventory and proactively manage demand (rather than operate in a reactive mode), consists of the following modules:
The current release of the Demand Solutions suite is the very recently released Version 11 (dubbed DSX), whereas the current release of the Retail Planning product is Version 4.2. These products are designed to work with a wide variety of material requirements planning (MRP), enterprise resource planning (ERP), and legacy enterprise applications, such as Microsoft Dynamics or SAP Business One. Other than on an individual opportunity basis, Optiant is not likely to provide major benefits to Demand Solutions customers, who are typically much smaller in size with simpler supply chain networks.
Leveraging a Two-brand Product Strategy
I am not sure whether Demand Solutions has been a major growth engine within Logility, but it certainly is an important division that serves the lower end of the market (although it only offers SCP solutions). Demand Solutions is run as an autonomous division, which even has its own marketing and press/analyst relationship (AR) teams (and its own set of competitors, such as Smart Software, Forecast Pro, Demand Works, Preactor, etc.).
In addition to solid financial performance, Logility and DMI’s common threads and values have been providing intuitive collaborative business-to-business (B2B) solutions for increased supply chain visibility. The “supply chain” notion refers to the complex network of business relationships with trading partners (customers, suppliers, and carriers) within which one must forecast, source, manufacture, store, and deliver products and services to multiple locations and customers by various modes of transportation.
Leveraging its SCM expertise, Logility has been an innovator in developing and deploying supply chain software solutions, with its first Internet-based collaborative planning software application implemented in 1996 (when the company was incorporated based on the vast SCM experience of its early employees). Logility continues to invest and expand its solutions, which support the CPFR standards defined by the Voluntary Inter-industry Commerce Standards Association (VICS) as a nine-step process of conducting business with external trading partners (manufacturers, suppliers, distributors, and retailers).
In addition to the Demand Solutions suite for SME’s, Logility offers the Logility Voyager Solutions suite to its target market of upper-midsize to Fortune 1000 companies with distribution-intensive supply chains through both direct and indirect sales channels. Logility’s Voyager solutions also support other collaborative supply chain standards for transportation and distribution center (DC) management such as collaborative transportation management (CTM), and radio frequency identification (RFID), a technology that uses radio waves to uniquely identify items as well as packaging such as cartons, containers, and pallets.
Logility Voyager Solutions: The Real SCM Deal
Logility Voyager Solutions [evaluate this product] incorporates performance management analytics and monitoring capabilities in a single Internet-based framework to provide decision support for a number of critical supply chain processes. These business processes are as follows: demand management, inventory and replenishment planning, S&OP, supply and inventory optimization, manufacturing planning & scheduling, transportation planning & management, and warehouse management. In other words, Logility Voyager Solutions is a an integrated set of both supply chain planning (SCP) and supply chain execution (SCE) solutions, which is acomprehensive package rarely seen in the market (even by much larger providers).
The Logility Voyager Solutions software suite is modular and scaleable to meet the management requirements of global organizations involving thousands of products with a complex manufacturing or distribution network. In addition, like its Demand Solutions sibling, the Logility Voyager Solutions suite interfaces with a broad range of existing enterprise applications deployed on a variety of Internet and client-server operating environments and platforms.
Logility’s customers can implement these modules individually, in various combinations, or as a full solution suite. Leveraging Microsoft’s .NET Framework, Logility Voyager Solutions supports multiple communications protocols and is designed to operate with industry-standard open technologies, including leading Web-based and client-server environments, such as Microsoft Windows and UNIX operating systems (OS) on Oracle and Microsoft SQL Server databases.
Figure 1 depicts the key functional sets of modules of the Logility Voyager Solutions product suite:
Logility Performance Management
At the core of the Suite, Logility’s Performance Management architecture allows companies to plan, manage, optimize, and measure their supply chain operations and strategic trading partner relationships for direct material procurement, production, logistics, and customer order fulfillment. Logility Voyager Solutions provides a performance-based architecture that allows companies to manage supply chain processes on an exception basis via a Web-deployed control tower or a supply chain portal.
Companies can proactively monitor, alert, measure, and resolve critical supply chain events both within their own companies and throughout the extended value chain via the Internet. Users can set up metrics that track the pulse of the business and alert notifications that prioritize work.
Some examples of user-configured key performance indicators (KPIs) are mean absolute percentage error (MAPE) and inventory turns, while exception criteria could be if orders exceed forecast or if the inventory level gets below safety stock. Users may have multiple profiles (roles) with relevant KPIs and alerts, such as budget planning, forecast monitoring, S&OP, and so on.
Value Chain Collaboration
This overlay set of Logility Voyager Solutions accelerates S&OP as well as strengthens strategic trading partner relationships. While its subsidiary Demand Solutions has been the S&OP leader in the SME space, Logility has lately also bolstered Voyager’s S&OP capabilities. For example, a new Web-based Executive S&OP view allows users to view data from the S&OP Workbench, while a new Web-based Global Supply Chain view allows users to bring together data from the following sources: demand, inventory, replenishment, and supply planning.
The following applications allow companies to accelerate and manage demand plans, direct material procurement, fulfillment, and financial goals to increase profitability and improve customer service.
Demand Chain Planning
This, arguably the most powerful part of Logility Voyager Solutions, provides the visibility to significantly improve forecasting accuracy by creating comprehensive overviews of market demand, new product introductions (NPIs), product phase-outs, short life cycle products, promotions, and inventory policies. Logility’s attribute-based forecasting capability is quite differentiating in the market, with the ability to handle up to 30 attributes per item. Voyager utilizes advanced demand attribute-based forecasting techniques for new and phase-out products to automatically generate demand profiles based on user-defined attributes and attribute matching technology.
The product can automatically “re-fit” the analysis of demand curves and volumes as demand data is received to also incorporate the impact of special promotional events. The offering can create a credible initial “best-fit” forecast based on multiple demand signals (e.g., orders, shipments, POS data, syndicated data, etc.) and apply business intelligence (BI) to improve accuracy.
The following applications (that give JDA Software, Oracle Demantra, and SAP SCM a run for their money) allow companies to build plans that are more closely attuned to the market:
The final part of this series will conclude with the analysis of Logility Voyager Solutions and how Optiant might fit in. In the meantime, please send us your comments, opinions, etc. on Optiant and Logility (especially your experience with their solutions). We would certainly be interested in your experiences with the abovementioned SCM software categories (if you are an existing user) or in your general interest to evaluate these solutions as prospective customers.
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