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Deciding whether to buy supply chain visibility software

While there is no one-size-fits-all solution, a variety of vendors and product categories tout the benefits to supply chain visibility software.

Unlike most categories of enterprise software, a Google search on supply chain visibility software won't turn up...

a plethora of possible solutions. There will be no feature-by-feature comparison of like products or even an evaluation of a common set of tools. Rather, choosing a solution for supply chain visibility really starts by defining the business problem and the kind of visibility that's required. Only then can a manufacturer zero in on the proper category and product solution that is best positioned to address its particular visibility problem and work toward achieving its specific business goals.

"If you do a search on supply chain visibility on the Internet, you'll find that it's not one category of solutions but rather multiple categories of providers making that claim," said Noha Tohamy, vice president of research at AMR Research. "The reason is that you can't define supply chain visibility -- it's not a feature or function -- and there is no one-size-fits-all supply chain visibility solution. Rather, it's more about a foundation of how you need to manage your supply chain and get visibility with suppliers and visibility within your own organization."

More information on supply chain visibility and SCM software
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Many vendors tout supply chain visibility among the benefits of their solutions. But each comes at the visibility problem from a different angle, depending on what audience or specific industry it serves and depending on where the need for visibility is most acute. Some key in on providing visibility on the demand side, helping manufacturers that have a heavy retail and distribution presence in optimizing inventory and order fulfillment, for example, while another set of providers tackle visibility from a supply side view for companies looking to better manage and garner efficiencies with their outsource partners or large networks of suppliers. Some providers interpret supply chain visibility from a logistics perspective, delivering applications that track a product as it moves throughout its distribution cycle, while others have targeted track as the major visibility challenge, providing solutions that help manufacturers keep tabs on products throughout the various stages of the lifecycle, greatly aiding in compliance efforts.

Here are the primary product categories that have staked a claim around supply chain visibility:

Traditional supply chain management (SCM) and ERP software providers:
Companies like Manugistics and I2, both now owned by JDA Software, have been expanding their SCM suites to address the visibility problem beyond the traditional view of what's happening within the four walls of a manufacturer's internal operations. ERP giants like Oracle and SAP have also become more aggressive about mapping their offerings to support the supply chain visibility problem. SAP's SCM suite, for instance, has features not only for demand planning and forecasting with retail partners but also for planning and collaboration across supplier networks -- the goal being to help reduce inventory and increase the velocity and accuracy of raw materials supplies while improving replenishment of stocking locations.

Many of the offerings in this category do a good job of supply chain planning, but there is still work to be done around the execution part of the visibility problem, according to Anil Gupta, principal at Applications Marketing, a consulting firm. "Supply chain visibility systems that can tell you how you're executing against your plan are key," Gupta said. "It's become more of an execution issue than a planning issue."

Business intelligence tools:
Best-of-breed business intelligence tools are another avenue for addressing the supply chain visibility problem. According to a new report published by Aberdeen Group, pervasive and role-based supply chain intelligence has emerged as a critical factor for improving operational performance. The only way manufacturers can adapt their supply chains to continuous business changes fast enough is to establish an adequate level of supply chain intelligence, according to the report's author, Viktoriya Sadlovska. Therefore, tools and processes must be put in place to monitor supply chain performance and notify specific process managers before problems can morph in disasters, said Sadlovska, who is Aberdeen's researcher of product value chain and supply chain management. A full 57% of respondents to the Aberdeen survey indicated that improving supply chain intelligence was a critical factor for improving overall operational performance.

Network operators:
Traditional value-added network (VAN) providers, Electronic Data Interchange (EDI) tool vendors and B2B e-commerce platforms are highlighting supply chain visibility as one of the areas where they can deliver a competitive edge. Companies such as Sterling Commerce and GXS now tout capabilities that let manufacturers track everything from active orders and payments to in-transit shipments. In addition, there are a growing number of new Web-based, software-as-a-service offerings in this space, including companies such as One Network and e2open. These services connect a supply chain network, providing capabilities for supply-side and demand-side collaborative order management, inventory planning and logistics planning, in addition to serving up integrated business intelligence, business process management and real-time exception management. The SaaS offerings tout ease-of-integration for syncing up multiple enterprises. "The challenge with a packaged solution vs. a service is that one delivers a working business process while the other delivers a function, which a manufacturer then needs to figure out how to get to work," said Richard McCluney, general manager, international for e2open.

There are scores of applications that key in one particular supply chain visibility problem -- for example, global trade management solutions, which deliver a window into international inventory and shipment status. Players in this category include companies like GT Nexus, Logility and Management Dynamics. Sales & Operations Planning and inventory management are other categories tackling a specific slice of the visibility issue. These solutions can hit the mark for manufacturers that have a very defined visibility problem.

Custom integration:
Of course, manufacturers can always try to solve the visibility problem by developing their custom integrations between multiple legacy packages and enterprise systems used by their suppliers. Unless there is a specific reason to do so, most experts discourage this route, as it's a lot of heavy lifting for IT, which doesn't necessarily have the expertise, bandwidth or ability to deploy and support external systems.

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