The purchase of theory of constraints (TOC) and APS (advanced planning and scheduling) manufacturing IT specialist STG has undoubtedly set the scene for a new, deep and advanced manufacturing and production management strategy at supply chain management software company Manugistics. But the firm is still differentiating itself primarily as the EPO (enterprise profit optimisation) software and services vendor against big rivals like i2 Technologies and the major ERP software and service providers, SAP, Oracle and so forth. Brian Tinham
The purchase of theory of constraints (TOC) and APS (advanced planning and scheduling) manufacturing IT specialist STG has undoubtedly set the scene for a new, deep and advanced manufacturing and production management strategy at supply chain management software company Manugistics. But the firm is still differentiating itself primarily as the EPO (enterprise profit optimisation) software and services vendor against big rivals like i2 Technologies and the major ERP software and service providers, SAP, Oracle and so forth.
At its enVision 2001 user conference this week in Geneva, the company majored on two main themes: high level EPO, with its basis in SRM (supplier relationship management), SCM (supply chain management) and PRO (pricing and revenue optimisation); and its new indigenous European strength.
Manugistics is looking less like an American company with every passing year. It now has serious presence and consulting services across Spain, Benelux, Germany, Italy, France and Sweden, as well as the UK – and users were welcomed to the event in their own language and style. Trite yes, but it made the point, and Manugistics’ president Richard Bergmann said the firm’s investment in people in Europe is currently greater than anywhere else.
Terry Austin, president of European Operations, said Manugistics message was all about “expanding your margins” in Europe. “Today’s businesses must be able to do it all… deal with the paradox of asset utilisation versus productivity improvement and flexibility… do more with less,” he said. And he reflected that with users needing now to be able to “start showing benefits within 90 days and get ROI within a year,” Manugistics’ people in Europe and its 60-odd manufacturing and supply chain modules were the way to achieve that.
He and Bergmann were at pains to insist that in Europe “we still have growth opportunities… must be more responsive… with price optimisation.” Bergmann: “This [European] economy is the largest and strongest in the world. [Manufacturers] need a critical review of how to keep going using our strategic, tactical and operational functionality.”
And Austin spoke specifically of the “pent up value in supply chain management and strategic sourcing opportunities.”
They’re words that many in the mid to large corporates of manufacturing will now be recognising, and there are certainly success stories that provide testimony – witness Guinness UDV.
Austin said that despite so many companies’ data remaining currently fragmented, “not integrated internally or externally… we will show you how we can enable this with our three legged stool” of SCM, SRM and PRO, leading again to its much vaunted EPO.
All good and undeniable stuff, although there is a way to go for most in manufacturing before they can take advantage of the grander plans and price tags envisaged here.
But there is a lot more. David Blacklock, formerly with STG and now Manugistics’ director of manufacturing strategy and a self acclaimed “‘Goldrattian’ through and through” (Eli Goldratt, father of TOC and promoter of the ‘Necessary and Sufficient’ offer, involving SAP, IBM, Mapics and Lilly (see home page)), said he expects a major push on TOC “within the next six months” on STG’s TOC, APS and the whole new manufacturing-centric suite of software.
One hopes so. For users, it’s another serious opportunity to harness the Goldratt-developed TOC/OPT techniques, methodologies and IT, and to slash inventory and lead times and improve efficiency and profitability at the grass roots level – and then take that right through their organisations. With the weight of the Manugistics organisation behind it, this unconventional, yet very successfully approach, could fly.
Certainly, in the demonstration areas at enVision, the combination of what was STG’s software, now being renamed and integrated with Manugistics’ existing production and scheduling suites, was impressive and very slick and convincing.
Potential users could see how visibility of information at every level of planning and scheduling, combined with simulation and optimisation technologies, could iron out problems ranging from capacity management right out to supply chain issues.
For the demo at least, Manugistics’ NetWorks Production Planning (what was STG’s Advanced Planner Opt21) and NetWorks Production Scheduling (ST Point Planner and Scheduler) plus Manugistics’ NetWorks Sequencing seemed to work together pretty seamlessly.
Add this to Manugistics’ strong European, indeed global, presence, and this should fly – and bring proven (although to many, still revolutionary) TOC- and APS-based manufacturing methods and IT to the much wider manufacturing market, including even SMEs. It’s going to be a far cry from the old days of STG and Goldratt’ small voices.
At Geneva, Manugistics confirmed that uptake is already happening, citing European industry leaders Merloni Elettrodomestici and US helicopter manufacturer Kaman Aerospace as recent signatories to deals. It also claimed systems “in use or being evaluated by” sectors as varied as aerospace and defence, automotive, chemicals and energy, communications and high tech, consumer packaged goods, industrial durables, apparel, footwear and textiles and life sciences.
And it’s clear that there is a lot to go for here alone. But linking all this back into the top end EPO suite is what will make the difference, says the firm. Said Greg Owens, Manugistics chairman and CEO, “The goal of any manufacturing organisation is to create an effective manufacturing foundation to support enhanced financial performance and improved customer service.
“Thanks to an aggressive technology strategy, we now offer robust collaborative manufacturing solutions that can address a manufacturing organisation’s critical business processes. This combination of strategic, tactical and operational solutions can help bring manufacturers a critical step closer to the promise of EPO.”
Manufacturing currently represents about 30% of Manugistics’ revenues, but – despite the firm’s last quarter downturn – this does looks set to rise. While there is no firm forecast for growth, Sam Brown, Manugistics’ European product director, said it will be “significant.”
Brown: “There’s an opportunity here for taking the high ground. ERP hasn’t gone away, and we’re not saying it should. Our challenge is to get the planning turned off in the ERP if they ever had it switched on and to move that whole production area up in terms of efficiency and profitability.”
Author: Brian Tinham