Collaboration Drives Growth

To get a sense of just how much the supply-chain planning market has changed during the past year, you only have to look at the top of the 2003 Best of Breed rankings. The highest RFP score -- 0.92 -- went to Manugistics (www.manu.com), which also had the highest name recognition at 0.17. The company beat out SAP (www.sap.com) and i2 Technologies (www.i2.com). By comparison, Manugistics ranked third in 2001 with name recognition of 0.12 and an RFP of 0.64.

According to an AMR Research (www.amrresearch.com) report titled "The SCM Application Spending Report, 2002-2004," order management and inventory management continue to be the most frequently used SCM modules, implemented by more than 85 percent of companies with SCM software.

A report from Forrester Research (www.forrester.com) adds that ERP vendors such as SAP "dominate user mindshare" in the supply chain management space, so Manugistics had to work hard at raising user awareness. Forrester Research also notes that 88 percent of SCM projects are global and 55 percent cost between $1 million and $10 million.

Undoubtedly fueling Manugistics' elite ranking this year was its major focus on collaboration. In fact, it has become something of a mantra for the company.

"Collaboration with suppliers and customers is no longer a matter of improving qualitative relationships in hopes that they will one day produce quantitative results," the company notes on its Web site. "With increasingly complex supply chains and increasingly demanding customers, effective collaboration at both the planning and execution levels has become essential for enhanced profitability."

Manugistics reported in November that its pricing-optimization solutions are gaining traction in a growing number of vertical markets, particularly with top-tier companies. These solutions are able to simultaneously optimize pricing for a high volume of products across a virtually unlimited number of distribution channels while leveraging an existing IT infrastructure.

Relinquishing the top spot in 2003 was SAP, which dropped to second with a 0.14 name recognition factor and an RFP of 0.84. Both numbers are down from 2001 levels.

Full-Service Solution

SAP focuses its supply chain planning on three areas: demand planning, supply network planning and production planning. In December, the company announced that Italy's Benetton Group (www.benetton.com) chose its SAP Apparel and Footwear (SAP AFS) solution to improve its planning, sourcing and distribution, which will be used in production plants, logistics centers and business facilities worldwide.

"No other software vendor can deliver a solution that covers the entire fashion supply chain," says Terry Phipps, Benetton Group's consulting CIO. "SAP AFS will allow us to meet market requirements, reduce costs and increase customer loyalty, as well as grow our customer base. With SAP's solution, we can adapt our production based on store demands."

Moving up one spot to third place in 2003 was i2 Technologies. Last year, i2 posted a recognition factor of 0.11 (down from 0.14 in 2001) and an RFP of 0.58 (down from 0.62 in 2002).

Apparel company VF Corp. (www.vfc.com) went live in December with i2's Supply Chain Planner, which it uses in its Imagewear division. The company also plans to implement i2's Demand Fulfillment solution in its Jeanswear division this year.

Mid-Market Expansion

PeopleSoft (www.peoplesoft.com) jumped up five places to fourth, with a recognition factor of 0.1 and an RFP of 0.55. The company made a big push last year to expand its mid-market business. in which it boasts more than 1,000 customers who account for a bit more than 25 percent of its total customer base. More than one-third of PeopleSoft's new customers are from the mid-market, according to mid-market vice president Jeffrey Read.

"The most significant development is that at the end of the third quarter [of 2002] we went from being just a U.S.-based mid-market program to one that is active in 10 other countries," he says. The company defines a mid-market company as one with $300 million in revenues or less.

Not even making the list in 2002 was Prescient Systems (www.prescientsystems.com), which ranks fifth in this year's report. The company posted a recognition factor of 0.06 and an RFP of 0.41.

After installing Prescient's demand planning solution, Darrin Weigle, vice president of supply-chain management at AAi.FosterGrant (www.fostergrant.com) says both short- and medium-term forecasts have improved significantly. "As a result, when we are forced to expedite inbound freight, we know we are doing it for a good reason," he says. "And when we transfer a product and change its identity by changing the trim, we know we are doing it to fill a hole that is true and real, not a perceived shortfall that may in fact not be real but merely the result of a forecasting error."