EXE: Inventory Management Is Name Of The Game
That's the story according to executives at EXE, a company seeing new competition as established companies such as Manugistics, Oracle and others seek to carve out a chunk of the supply chain execution market.
"Our [products cover the flow of goods and of information," said Jeff Perry, vice president of alliances at EXE, based here. "We are on the shop floor, and Manugistics is not. We touch the product, and they do not. They are starting to creep into our space, but we have a 20-year head start."
Perry estimates that EXE's solution integration partners are involved in sales or implementation of its software at least half of the time.
"The systems integration partners we have are global strategic partners and national or regional partners," Perry said.
While EXE has 200 or so internal professional services people, "there is a lot of overlap" between EXE's services people and partners at other integration firms, he said.
Perry added that EXE's supply chain execution software, which manages "the most profitable ways to handle [inventory within the four walls of the distribution center," actually complements supply chain planning products from i2, J.D. Edwards and others.
One of the global partners with which EXE partners is Cap Gemini Ernst and Young, where Robert Hood is senior manager in the supply chain practice focusing on telecommunications and media companies.
To some degree, Hood said, enhancing inventory management is an endeavor his clients are willing to tackle, even in tough economic times, because of the cost-cutting opportunities.
"Compared to what you had back in the late 1980s and early '90s, though, the situation is a little different," he said. "Back then, many people had no warehouse management or logistics systems; they were usually part of some other monolithic system. There were very significant return-on-investment opportunities then, with payback in months."
Although some companies have temporarily tabled certain IT projects, Hood said that over the past year, Cap Gemini Ernst and Young has worked on four or five "significant projects" to help clients streamline processes at warehouses and distribution centers. Canadian Tire, Discount Auto Parts and Fleming Foods are some of the clients Hood cited.
EXE's Perry echoed Hood's observation.
"When times were booming, we benefited from the e-commerce craze as much as anyone," he said. "[Yet when times are more difficult, people talk about taking time and money out of the supply chain. That's where we live."
Angelo Perino, a partner in PricewaterhouseCoopers' supply chain practice, underscored Perry's point, saying that the longtime EXE partner's supply chain business is holding steady, with engagements accounting for more than $1 billion in annual revenue.
When it comes to inventory management, Perino said, vendors tend to play to the needs of specific vertical markets.
"The warehouse management vendors have specific industry segments they have focused on and have more of a dominant presence in," Perino said. EXE has "a significant presence in grocery, retail and third-party logistics," but not in pharmaceuticals, high-tech or apparel.
SAP and Oracle might argue they are the dominant ERP players in the supply chain, Perino said. "But for what I call high-end, high-volume distribution and logistics, there is [no ERP vendor [with an offering that can scale sufficiently.
"We consider best-of-breed solutions like EXE for high--volume deals," Perino added, referring to a warehouse with a million or more square feet of space.
Cap Gemini Ernst and Young's Hood said the addition of CRM features into supply chain execution systems is under way, potentially wringing more useful information from the supply chain.
Some integrators that specialize in supply chain implementations think the likelihood of an economic upturn gives clients another reason to enhance inventory management or other supply chain management processes sooner rather than later.
"Install systems now that will reduce costs now but, more importantly, [will eliminate the need to re-hire resources after the recession is over and business picks up," said David Hough, director of supply chain management at Schaumburg, Ill.-based PSC Group, a consulting/integration firm formerly known as Precision System Concepts.