While attending the recent Gartner Supply Chain Executive Conference in Phoenix, Supply Chain Matters had the opportunity to sit–down and catch-up with some CEO’s of supply chain software and services providers. One distinct opportunity was a conversation with Joseph Shamir, CEO of supply chain planning and analytics software provider ToolsGroup.
This author has known Joe Shamir for quite some time, dating back to my days as an industry analyst at AMR Research (now absorbed into Gartner) focused on the supply chain technology market. At the time, ToolsGroup was a start-up in the midst of making a stronger market presence with a core mission for supporting distribution and customer-centric supply chain planning needs. Briefings with Joe Shamir were often dynamic and quite interactive.
Joe is a colorful and knowledgeable figure in supply chain planning and he has not at all been bashful in sharing views related to planning practices, especially when it relates to leveraging granular data in planning practices. I mention this specific history because he was, by my recollection, one of the strongest advocates for item-level and demand sensing practices. He has been and continues to be an advocate in the critical importance of a singular planning model to insure scalability and responsiveness in supply chain planning.
Much later, when this author was leading IDC’s supply chain management research, Joe would reference ToolsGroup efforts at Colgate Palmolive, augmenting existing SAP applications and addressing the need for supply chain planners to not over react to events. His passion was in letting the “system” plan requirements based on demonstrated fulfillment or promotional patterns of product demand. His belief was that planners needed to shielded from the day-to-day “noise” of events.
In our interview, I especially wanted Joe to reflect on his prior beliefs and where supply chain planning has morphed to become in the current era of supporting online and omni-channel customer fulfillment. Indeed with the advent of today’s online customer fulfillment needs, more and more distribution sensitive supply chain are now moving toward greater levels of item-level planning, network balancing and what ToolsGroup currently articulates as Predictive Commerce. The clock speed of business has dramatically changed.
Joe acknowledged that perhaps his thinking was ahead of the market, but indeed many of his beliefs have come to the fore. However, Joe was quick to caution that from his observations, change management and talent management issues still remain to be overcome in addressing the changing needs and requirements of supply chain planning. This especially relates to broader leverage of demand analytics and indeed, application of more predictive analytics applied to supply chain planning. The role of planner has become more strategic and skill requirements need to catch-up.
Shamir is especially excited about last week’s announced release of a new ToolsGroup simulation tool termed Instant Replay, an application that allows users to retrospectively analyze demand, inventory, supply and service events to ascertain how specific past events relate to key performance indicator (KPI) achievement. According to its announcement, the analogy of this application is one described as a ‘golf swing analyzer” for supply chain planning professionals in determining what actually happened, what should have happened based on the plan, with optimized recommendations as to what to address in subsequent planning. His analogy is one of “fly by wire” planning.
After last week’s interview it is indeed clear to this author that rather than resting on either the belief or laurels that what he predicted for distribution sensitive supply chain planning has indeed arrived, Joe Shamir will continue with his passion toward describing the next set of challenges while positioning his firm to be in the forefront of supporting said challenges with innovative technology. As he often describes, there is little time to rest.
Disclosure: ToolsGroup is a current client of the Ferrari Consulting and Research group.
About a year ago, Supply Chain Matters provided our readers a perspective on specialized SAP focused systems integrator firm Intrigo Systems, and how that firm was helping to accelerate value for existing SAP APO customers. We experienced quite a lot of reader interest and uptake on our commentary. In the specific area of broader SAP APO adoption and business value, Intrigo has been deploying its Optek tool suite for SAP APO planning needs since 2009. The suite consists of modules designed to place the planner more in control of the process while making SAP APO functionally more effective.
At the recent Gartner Supply Chain Executive Conference, we managed to catch-up with Intrigo CEO Padman Ramunkutty, a colorful and well known recognized SAP APO expert. In full disclosure, this Editor has known Padman for many years and I value his perspectives on supply chain planning and software technology trends. In fact, during a networking break at the conference, we managed to simultaneously speak with not only Padman, but also Sanjiv Sidhu, past founder of the former i2 Technologies, and now Chairmen and Co-founder of 09 Solutions. Indeed, two icons of supply chain planning with enormous perspectives of how planning software has progressed.
In our conversation, Padman reminded this Editor that in addition to our Supply Chain Matters recognition of Optek’s value over a year ago, Gartner has recently recognized Intrigo as a “Cool Vendor” in Supply Chain Planning for 2015, specifically citing Optek as an extension for SAP APO as an means for leveraging value for existing investments. In a March 31 Gartner report, key findings included the following: “Supply chain leaders need to find ways of leveraging their existing investments in their quest to improve supply chain performance.”
Thus, we are pleased that Gartner has now also recognized Intrigo Systems as a “Cool Vendor”.
Gartner Reports Robust Growth in 2014 Worldwide Supply Chain Management and Procurement Software Revenues
In conjunction with its Supply Chain Executive Conference held this week, industry analyst firm Gartner reaffirmed a rather robust year of nearly 11 percent growth for supply chain and procurement software during 2014. Gartner estimated total revenues for SCM and procurement software to be $9.9 billion last year, outpacing other software market segments. The 2014 sizing of $9.9 billion reflects a nearly $1 billion increase from the Gartner $8.9 billion number reported for 2013 performance. The current 10.8 percent growth rate compares to the 7.3 percent growth reported for 2013. The fact that the pace increased by 3.5 percentage points is by our Supply Chain Matters lens, a reflection of a stepped-up emphasis in supply chain business and procurement process support needs.
Gartner again confirmed the overall fragmentation of this market segment which has continued by this author’s perspective, for the past 15 years. The top 10 vendors currently account for 55 percent of total market share, while the remaining 57 vendors tracked by Gartner account for the remaining share of the overall market. Gartner further reports that the average growth rate for remaining 57 vendors averaged nearly 10 percent, which is again, a very healthy growth performance.
As in the past, SAP and Oracle are again reported as the overall leaders of this market segment, followed by JDA Software (current Supply Chain Matters sponsor), Manhattan Associates and Epicor rounding out the top five revenue listing. We caution our readers to not be totally enamored by the SCM and procurement revenue numbers reported by both SAP and oracle since they are often internal estimates that are generated by each of these ERP providers vying for number one bragging rights. Neither reports such breakouts in their official financial reports to the investment community.
Double digit growth for this particular software segment is not at all unusual and reflects the continued importance that industry firms place on investing in supply chain capabilities. The most recent peak was in 2011 with a 12.2 percent growth rate. In its announcement, Gartner stated that: “The SCM and procurement software market experienced solid growth through sustained application demand, as supply chain remains a key source of competitive advantage in driving business growth objectives, such as improved customer satisfaction, greater business agility and operational improvements.” That statement seems understated.
From our discussions, client interactions and travels, we believe that the overwhelming complexity that is now impacting multiple manufacturing, retail and service focused industry supply chains has prompted needs for added technology support.
Disclosure: JDA Software is one of other sponsors of the Supply Chain Matters blog.
Last week, Supply Chain Matters shared our initial impressions of PTC’s LiveWorx 2015 conference, which had a sole focus on the emergence of Internet of Things technology. For us, one of the more interesting notions of PTC’s IoT strategic portfolio was the announced acquisition of ColdLight. According to PTC’s briefing with press and analysts, the ColdLight Neuron platform will serve as a platform for automated predictive analytics applied to IoT focused data, and PTC was willing to invest in excess of $100 million to secure this capability.
We had the opportunity to sit in on a session conducted by Ryan Kaplan, the CEO of ColdLight, where he overviewed the functionality elements of the Neuron platform. The technology provides various pillars of support in analyzing rather large data streams which include aspects of why did an event occur, and what will happen next based on various automated simulations. We and others often refer to these capabilities as ranges of descriptive and prescriptive analytics. Rather than software following programmed instructions, this type of technology capability is termed machine learning technology where algorithms actually “learn” from data and information patterns to make predictions based on such patterns. Once more, the data is analyzed in a much faster manner, sometimes as minutes or seconds.
The ability in applying such capabilities to various future IoT applications has important potential in service lifecycle management (SLM), manufacturing and other product related support needs. Once more, Kaplan pointed out that many of these capabilities can be applied without the need for rather expensive data scientists, which hinders scalability and wider scale deployment.
The aspects of machine learning being applied to support supply chain management focused business processes is not new. More than a year ago, Supply Chain Matters called attention to supply chain planning technology provider ToolsGroup application of machine learning technology to product demand forecasting. In the ToolsGroup SO99 planning application, the technology is providing support to difficult demand planning scenarios involving concentrated incidents of trade promotion, high frequencies of new product introduction, product seasonality or cannibalization. This form of product demand environment is becoming much more prevalent for supply chains supporting today’s online fulfillment and Omni-channel commerce environments.
The application of machine learning is in the analysis of the many relevant variables and interactions related to product demand, and by capturing and modeling all the relevant attributes that shape demand, while filtering out the “noise” or random demand fluctuations. For a more detailed perspective, ToolsGroup’s Jeff Bodenstab penned a recent blog describing how the Rulex machine learning technology is applied at Danone. CEO Joe Shamir penned the published article, Machine learning: A new tool for better forecasting, in the Quarter 4, 2014 edition of Supply Chain Quarterly (CSCMP Membership required to access) . Besides providing a detailed tutorial on the aspects of machine learning that can be applied to supply chain demand planning and forecasting, CEO Shamir observes that companies can now take advantage of valuable data signals that are being generated closer to the consumer, such as point-of-sale or social media channel indicators. That alone is important competitive differentiator in being able to respond quicker and more intelligently to various market signals.
The important takeaway for readers is that proven predictive analytics techniques supported by machine learning technology is no longer just a vision, and will be even more available for targeted use by supply chain and product management teams in the coming months and years. They will pave the way for more innovative processes and more proactive decision-making in many supply chain, manufacturing and product management areas. The added benefit is that many of these tools have been designed to be utilized by current users who have broad business and data knowledge without the need to staff data scientists. Targeted application such as that of ToolsGroup addresses specific business planning and process needs.
Finally, the application of predictive analytics based solutions are once again being brought to market by smaller, best-of-breed innovators who often tend to position themselves on the first mover advantage of market needs, while understanding the realities of having to augment existing systems. That is a win-win situation.
Disclosure: ToolsGroup is a current client of the Ferrari Consulting and Research Group LLC.
We are once again in the high point of this spring’s industry conference season and this author finds himself mostly mobile, attending and checking-in on the major important conferences that we believe have context to the broad supply chain management, manufacturing and product management community that represents Supply Chain Matters. Since we are quickly getting backlogged on content, we are going to provide our readers brief summary impressions and takeaways from such conferences to be followed by more detailed and retrospective observations and commentaries in the coming weeks.
We have previous highlighted our impressions of the JDA Software FOCUS 2015 conference held last week in Orlando. This week, SAP is conducting its annual Sapphire and ASUG customer conference in Orlando and next week, Gartner will be hosting its annual SCM Executive Conference in Phoenix. We are planning to provide commentary related to each.
The Internet of Things is becoming a very hot topic, and this week, we were invited to attend the LiveWorx 2015 conference in Boston, sponsored by PLM, SLM and IoT technology provider PTC. If you have been following our Supply Chain Matters coverage of PTC, this vendor has been on an acquisition spree directed at gaining market influence in both the Service Lifecycle Management (SLM) and Internet-of-Things (IoT) technology enablement segments. In the latter, PTC previously invested a collective sum of $300 million by acquiring providers ThingWorx and Axeda.
LiveWorx 2015 was PTC’s effort in bringing a conference together that had a sole focus on its IoT market strategies moving forward. The topic and the interest levels are high, and PTC managed to attract over 2000 attendees, having to add an additional meeting venue.
LiveWorx 2015 in one respect, reminded this author of the very early days of the vast hype associated with the introduction of RFID technology incorporated within various industry supply chains. My observations at that time, which seem so long ago, reflected on vendor and systems integrators in hyper-ventilation mode, thinking about the vast amounts of money to be made in implementing IoT. And so it seemed with LiveWorx sponsors, presenters and attendees among this community. Also in attendance were companies and service providers trying to figure out what business processes could most benefit from IoT and whether they should consider adoption, but they seemed to be overwhelmed by mostly partner attendees.
Regardless, the takeaway from LiveWorx was the added profound context that was provided in the potential game-changing implications related to industry, product and value-chain competitiveness. That was articulated by Professor Michael Porter of the Harvard Business School who in his address, demonstrated a perceptive understanding of the impacts IoT will have on many firm’s value-chains, and indeed, how they will compete in the technology wave. Porter’s message was that it is not a question of whether firms evaluate the impact of IoT on their industry, but rather how long does one wait before the industry is disrupted by those who exploit these strategies.
Returning to our analogy, while RFID had tactical business process connotations, IoT has far broader business related connotations. While RFID vendors and service providers tended to not want to openly talk about needs for industry standards, bullet-proof security and organizational change management connotations, the IoT community assembled this week in Boston seemed to be willing to be more up-front and proactive in acknowledging such concerns and beginning dialogues and efforts. History has indeed provided important learning, as we noted in our most recent commentary related to RFID.
There were a number of important announcements made in conjunction with LiveWork15. PTC signed a definitive agreement to acquire ColdLight, a termed big data machine learning and predictive analytics technology provider, for approximately $105 million. According to the announcement, the acquisition of Cold Light’s Neuron automated predictive analytics platform will enrich PTC’s IoT technology portfolio. This author had the opportunity to sit in on a presentation delivered by ColdLight’s CEO regarding its capabilities and it certainly has interesting possibilities when applied to IoT.
Another important announcement was ThingWorx Converge™ an application that leverages the ThingWorx® platform for connectivity, device management and rapid application development. This application supports pre-built capabilities for companies who create, operate and service manufactured products as well as application developers and system integrators who deliver solutions. It serves as evidence that PTC wants to be the tools provider, providing its rapidly evolving partner network a more streamlined tool to develop a mass of industry specific applications.
As noted, Supply Chain Matters will feature additional observations related to PTC ThingWorx in the days to come.
Last week, Supply Chain Matters attended the JDA Software FOCUS 2015 conference in Orlando Florida providing a number of live update commentaries regarding this conference. In this final commentary related to this year’s FOCUS, we provide our summary impressions.
To view our prior observations and commentaries, please click on the below links:
In our view and in the view of others we spoke with, this was a far different JDA conference, one presenting a much broader cross-industry focus, a more succinct strategic agenda for customers and a less arrogant tone. For industry analysts such as this author, the sessions were far more open without restrictions and JDA executives were more open and willing to discuss strategic direction. It was fitting that the conference represented the 30th anniversary for JDA as a software firm.
As noted in our initial commentary, we were especially honed-in on the opening welcome address from JDA’s Chairmen and CEO, Bal Dail who outlined a three point strategy for JDA that included its plans to deliver for existing customers, continued corporate investments in technology and in partnerships. From the podium, he acknowledged that in the past, JDA had not especially listened to customers. He also acknowledged a culture of past arrogance in the persona of JDA. There were messages related to commitments for responding to customer needs for advanced technology, much broader partnerships with other providers, including the announcement of a new partnership with Google and the Google Cloud Platform for cloud services. Further emphasized was the ongoing partnership with IBM in Retail industry intelligent fulfillment needs.
We were further impressed with our 1-1 interviews with Jean-Francois Gagne, Chief Innovation Officer, Razat Gaurav, Executive Vice President, Global Industries, Fab Brasca, Vice President, Solution Strategy, Global Industries. As a reference, Gagne arrived at JDA with the acquisition of Red Prairie while Gaurav and Brasca in a long-time veterans. We touched upon a number of technology strategy and industry adoption topics and this author came away with even more reinforcement that JDA is indeed far more focused and aligned toward bringing more leading-edge technologies to its various industry customers. The takeaway for our readers is that JDA is far more focused on leading-edge cloud development and that should pay dividends in time-to-value down the road.
The day two customer keynote theme was important and powerful, especially since it featured PepsiCo’s supply chain transformation journey that dates back to the early nineties and including the former Manugistics and i2 Technologies technology applications. The relationship of PepsiCo with JDA technology is a 20 year legacy, which is somewhat extraordinary in the supply chain best-of-breed technology industry. That was the missing reinforcement that JDA supports manufacturing and distribution intensive supply chains, in addition to retail.
This year’s FOCUS indeed included a special emphasis on the needs to support Omni-channel customer fulfillment needs, especially the various aspects of JDA’s Intelligent Fulfillment and JDA’s Flowcasting applications. Suffice to indicate that we were impressed by the depth of functionality.
We were also updated on the progress of JDA’s partnership with IBM to address the needs to process and fulfill retail industry Omni-channel orders. The partnership calls for combining the elements of JDA’s warehouse management, demand and workforce planning support capabilities with IBM’s Sterling Distributed Order Management network platform. JDA communicated to conference attendees that the initial release of this functionality will become available in June.
That was indeed a rewarding conference and it reminded those several years past where a broad variety of customer, industry and vendor specific supply chain management business process and IT focused topics were presented, discussed and talked about among attendees.
Disclosure: JDA Software is one of other sponsors of the Supply Chain Matters© blog.