Analysis Of Supply Chain IT Industry Business Essay



IT industry in India is growing rapidly. Various studies have concluded that each rupee invested as input in the IT industry on average results in two rupees of output, thus multiplying its contribution to the GDP of India, which is highest among all the industries contributing to the country's economy. But if India is to remain competitive in this industry worldwide, it has to overcome challenges thrown up by various low cost centre countries like Brazil, Indonesia and Philippines etc. In recent years, supply chain management (SCM) has been developed as essential management philosophy and practice for all business operations. Cyber Media Research expected the Indian product supply chain applications market to witness a growth rate of 16.5 per cent in 2011, which was significantly higher than the CAGR of 2.2 per cent for the period 2007- 10. Hence it will be interesting to analyze the SCM Solutions (IT) Industry provided by different market players in India and develop a framework that will help to maintain its competitiveness.

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Now a day's Supply Chain Management becomes a tool to help accomplish corporate strategic objectives in various organizations across different industries. The aim of this project is to analyze the capacity and capability of different SCM solutions provider in India and compare their product offerings, expertise, client base and technologies. This research is exploratory as well as conclusive in nature that includes primary and secondary research, macro study of SCM solutions and development of framework/model for assessing the competitiveness of Indian product supply chain applications market in coming future.

Multiple Chains of Supply chain management

Product development life cycle

Product lifecycle management (PLM) definition incorporates managing the entire lifecycle of a product from beginning, through design and manufacture, to service, and disposal. The process integrates processes, people, data and business systems and serves as a information module for the enterprise.

The field is integrated and information driven to speedup innovation and launch of successful products. It is built on a single repository which stores all product-related knowledge, data, and processes.

PLM is a process by virtue of which a product is managed throughout its life cycle through a single value chain. Hence the concept represents a new, strategic approach to the product value chain that puts stress upon process efficiency, cross-functional collaboration between the company and its broader enterprise, rapid innovation, rigorous quality control, risk mitigation and cost-effectiveness. Below is a list of PLM service providers:

         Accenture

         Kylipso

         Atos Origin

         Lever X

         Capgemini

         TCS

         Cirquent GMBH

         Siemens Business Services

         HCL

         Wipro

         PLM products of IBM

         KPMG Consulting

         PLM products of SAP

         Thales

         Infosys

         Mindtree

         ITC infotech

         LG CNS

Demand Forecasting and Inventory Planning

Demand Forecasting and Inventory Planning should include details of forecasting in static demand environments. In the modern supply chain, forecasting is necessary for companies that keep items in inventory and whose stocks are not made to order. Material Forecasting is used to ensure they cater to the demand while at the same time minimizing the risk of overstocking.

Forecasts are made for a company's finished goods, components and service parts which in turn are used by the production team to develop production or purchase order triggers, quantities and safety stock levels. The forecast is of course dynamic and needs periodic review by management from time to time basis.

The process of demand forecasting essentially includes components such as

Demand Planning

Replenishment Planning

Production Planning

Below is a List of companies providing demand forecasting solutions:

         Adexa eGPS

         Adexa eGPS

         Supply Chain Consultants

         Supply Chain Consultants

         Avercast

         Avercast

         Foresight Technologies

         Foresight Technologies

         Demantra

         Demantra

         Catalyst International

         Catalyst International

         Oracle

         Oracle

         Adexa eGPS

         Riverone

         Supply Chain Consultants

         Logility

         Avercast


Procurement Planning and Strategic sourcing

Procurement is the process of acquisition of goods or services.

Procurement and sourcing both the functions have strategic and operational significance. Procurement managers have to be involved in building supplier networks, estimating, controlling and cost reduction activities apart from performing other functions and ensuring service levels. They are becoming more and more cross functional now a days. The process of procurement is primarily driven by paperwork and ERP systems these days.

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Though closely interlinked, procurement and sourcing are not one and same. Sourcing strategy deals with planning, designing and building a reliable and competitive supplier base, apart from acting as a catalyst to determine the strategy for procurement, pricing strategies and supply chain requirements. It involves integration of its objectives with the objectives of stake holders in operations, finance, marketing and distribution divisions.

Procurement Planning: The Procurement Plan is used to provide information about the purchase of goods and services, vendor selection criteria, nature of contracts to be used, vendor management, and personnel involvement during each step of the process.

Below is a list of procurement planning solution providers:

FlexRFP Software

Aravo solutions software

Coupa Cloud Spend Management software

Geneva Business Managements Systems

Epicor supply chain software

S2K WMS software for warehouse management

Manhattan Associates Software

Ariba Inc

Supply chain Planning (Sales and Operations planning) &MPS

Sales and operations planning (S&OP) is an integrated business management process developed in the 1980s by Oliver Wight which means to achieve focus, alignment and synchronization among all functions of the organization. The S&OP planning includes a forecast via updates that leads to a sales plan, production plan, inventory plan, customer lead time plan, new product development plan, strategic initiative plan and resulting financial plan.1

The objective of Sales and operations planning is to:

Provide aggregate management control over the operational demand/supply planning process.

Understand the financial consequences and relate them back to business plan.

Balance Supply and Demand, Volume and Mix.

Master Production Scheduling

MPS balances and integrates the needs of marketing, manufacturing, and finance with the needs of customers. It's a process for converting a business plan into a dynamic and total product manufacturing schedule. It acts like a link between Sales and Production .It instils efficiency in the production process and allows sales to have reliable information for the customers

Below is a list of companies proving S&OP and MPS

JDA the supply chain company

Demand Solutions

Voyager Sales and Operations Planning

Arkieva S&OP Software

Quintiq Sales and Operations Planning

Steelwedge Solutions


Infor S&OP solutions

IBS Advanced Sales and Operations Planning


This is typically part of the supply chain management that involves supply/demand planning, inventory management, warehousing, materials handling, inbound and outbound transportation management, fleet management, order fulfilment, logistics network design, and management of third party logistics services providers.2 The function also includes production planning and scheduling, customer service, sourcing and procurement, packaging and assembly to varying extent.

To attain competitive advantage via efficient distribution and logistics, the companies have to be either at the position of providing

Value advantage-which Logistics leverage opportunities are

Distribution channel strategy


Tailored service





Cost/productivity advantage which essentially includes

Capacity utilization

Asset turnover

Low inventory

Low wastage

Logistics In Supply Chain Management Context

The term supply chain is an extension of idea behind integration of logistics, although there are some key differences between the two, such as

Supply chain is looked upon as a single entity rather than series of different elements such as procurement, manufacturing, distribution etc. In most progressive companies, supply chain is designed to include both suppliers and end users in the planning process

Supply chain has a greater emphasis on strategic planning as compared to logistics which is more operational in nature

As compared to logistics, inventory is the ultimate resort to balance integrated flow of products through the pipelines in supply chain

Third Party Logistics (3PL)

Definition and scope: There is no single universally accepted definition of this process.  In some cases TPL is used as a label for traditional "arm's length" sourcing of transportation and/or warehousing, whereas in other instances the term is used to describe an outsourcing of a more complex character that can encompass the entire logistics process. According to Lieb (1992, p. 29), TPL involves "the use of external companies to perform logistics functions that have traditionally been performed within an organization. The functions performed by the third party can encompass the entire logistics process or selected activities within that process. On a similar note, Coyle et al. (2003, p. 425) suggest that TPL involves an external organisation "that performs all or part of a company's logistics functions".

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TPL Providers: A TPL provider is an external provider who manages, controls, and delivers logistics activities on behalf of a shipper. This relationship can be formal or informal, should be mutually beneficial and continuous.

Below is a list of major TPL providers

Exel PLC

Kuehne & Nagel International

Nippon Express

DHL Danzas Air & Ocean

UPS Supply Chain Solutions.

Fourth Party Logistics (4PL)

Definition & Scope: A 4PL provider is a supply chain integrator. The 4PL assembles and manages all resources, capabilities and technology of an organisation's Supply Chain and its array of providers. 4pl concept is based only on intellectual capital and information systems. It provides overall view to

Seek integration

Minimize inventory costs

Improve efficiency

Reduce lead times

List of 4PL providers

A lot of existing 3pl providers claim to have expertise in providing 4PL services as well, but there have been lot of claims and counter claims regarding the same, with allegations being made that lot of 3PL providers are falsely claiming to have acquired the requisite expertise in the domain of 4PL to earn new businesses. Some of the existing 3PL providers that claim to deal in 4PL as well are DHL, Keuhne and Nagel etc.

Distributed Order Management (DOM)

Definition and Scope

The concept of order management is deeply rooted within supply chain. The term refers to the set of actions that a merchant needs to perform to deliver the goods that a customer has ordered.

E-Commerce context

Order Management describes everything that the merchant does after a customer has placed an order on his/her web store. The typical steps would be

Pick inventory from warehouse and ship it to the customer

Send an email notification to the customer that the order is on its way

However, the actual processing can be a bit more complex than that. The reasons being

The merchant may be out of stock on some of the ordered items. In such a scenario, the merchant may ship out only part of the order with the items that are in stock while rest of the items are shipped at a later point of time. The items not part of the initial orders will be referred to as 'Back Ordered'.

Sometimes, the merchant may not stock all the items in the warehouse and often such items are directly shipped from the warehouse of the vendor once an order is received. This process of shipping without involvement of retailer's warehouse is called 'Drop Shipping'.

Some merchants use Outsourced Fulfilment Warehouses to avoid carrying any inventory. In other words the warehouse used here belongs to a third party. After an order is placed on merchant website the order information is forwarded to the website/information system of third party warehouse, which then ships the goods directly to the customer.


There are many major players in the IT sector that offer customized integrated DOM solutions. Some of them worth mentioning are


Siebel Analytics


Glovia G2

Manufacturing and Supply Chain

Manufacturing companies are always under pressure to cater to global demands, while operating in a cost effective manner do bring down operational costs. Typical challenges that the manufacturing companies are facing these days are as follows:

Enabling lean supply chain processes and reducing costs via a collaborative value flow

Managing global order management and global sourcing

Improving the throughput and flow in value chains to fulfil inventory turnover and order fulfilment

Coping with high uncertainty in global supply chains

Increasing importance to have real time supply chain visibility

Often, only a few hours pass between delivery of a product and installation at the customer's premises. Immediate response to installation problems, defective products or change notes is necessary at all levels of the production quality control system. Quality management within the Value Chain can significantly reduce the quantity of problems and their frequency as part of a process of continuous improvement.

Delivering the right products at the right time, price and quality are crucial factors of success - especially for automotive component suppliers. Car manufacturers are exceedingly demanding on their suppliers in connection with various industrial standards. A computer-aided QM system helps in achieving better visibility into the business and is therefore of utmost importance to keep a company in business.

Markdown Pricing in Retail Industry

Price and markdown planning are very essential for retailers to drive store traffic, reduce excess inventory and effectively manage the phase out of products.  Markdowns are often associated with margin reduction and profit loss-it may well hurt the brand image of companies which are known sell premium in the market.

But during these times of intense competition, ever increasing demand for more transparency and information about pricing policy and the accumulating burden of inflation, businesses have to restructure their pricing strategies, and thus rethink their perception of markdowns.

Taking a more scientific and informed approach to markdowns is likely to help retailers in managing product lifecycles and stock levels more effectively. For example, if an item starts to lag the rate at which it was expected to sell out, the company can modify the product's price to ensure it reaches the sales target mark by the end of the season. Even small drop in price can attract consumers who can keep a track of them via various technological platforms these days. Hence instead of sending out a distress signal to the market they can also be used as a tool for promoting slow moving products. However if the process is continuous consumers can get accustomed to the whole process which might not only increase off price demand but also reduce full price sales. Hence retailers who believe in aggressive markdown strategies will eventually see serious erosion in price and margin much earlier during the lifecycle of the product.

Various enterprises have come up with software solutions for retailers these days that claim to help them achieve a optimum level of markdown pricing while maintaining profitability and driving up sales, phasing out slow moving stocks etc.


The package is known a Oracle Retail Markdown Optimization. It is one of the various Oracle software solutions aimed to serve the retail industry that focuses in markdown pricing strategies.

They claim that the package

Combines consumer demand with advanced predictive and simulation techniques to optimize every possible pricing scenario

Delivers workflow and a decision framework that allows for what-if scenarios and comparisons

Maximizes margins over the item's entire lifecycle, not just during the full-price selling period

Enables retailers to monitor performance of past and ongoing markdown activities against financial and operational goals

Provides visibility into below-chain-level forecast recommendations, recommended new retails, and gross margin costs of delayed decisions

As per Oracle, the companies using this have benefitted in terms of

5-15% increase in gross margins

5-20% improvement in sell through

Increased inventory turns

Increased merchandise freshness


Revionics is a leading provider of Life Cycle Price Optimization, including base price, promotion, and markdown optimization solutions for retailers. Revionics solutions improve retailer sales, profits, and customer loyalty through sophisticated consumer-demand intelligence and proprietary retail-pricing science. 

Their markdown pricing solution comes as a part of the complete package containing number of product lifecycle price optimization software. The key features of their solution include

Strategy planning

Store-level optimization

Store cluster recommendations

On-demand modelling with data from daily or weekly inventory and sales

Portal-based entry, data integration, or copy paste to create event groups

Forecast-to-actual reporting

Event comparison and modelling

Flexible rule-sets to define coherence, ending numbers, preferred steps, lead-times, maximum markdowns, etc.

Forecast views roll up by product, store, or coherence groupings

DC Inventory allocation recommendations

Support for Soft lines, including style, size, colour, and in-store display


The SAP Markdown Optimization application synthesizes key data such as historic sales, costs, and salvage values for inventory to help companies predict customer buying behaviour and establish the optimum frequency, timing, and depth of markdowns based on your company's unique customer demand.

The software has built-in workflow functionality which can be used to create category, zone, and store-level markdown plans, identify opportunities to reduce excess inventory, develop and manage complete seasonal sales plans and target markdown horizons. SAP Markdown Optimization automatically monitors customer buying trends, determines whether the current markdowns are helping companies move products at a rate that will enable them to meet revenue and inventory goals, and, if required, dynamically adjusts markdowns to align customer sales with business needs.

The solution is powered by SAP's NetWeaver platform which unifies technology components into a single platform and helps SAP and non SAP systems integrate effectively.

Global supply chain management analysis:

The aim of global supply chain management is to provide prompt and reliable delivery of high quality of products and services at the cheapest cost possible. Also its aim includes the satisfaction for effectively rising customer's expectations. The factors that affect the global supply chain include:

Technology and internet change in today's dynamic world

Proliferation of trade agreements

Falling Trade Barriers

Increase in international trade groups

New Markets

Global supply chain management helps companies to compete all over the world and expand their business opportunities. It gives company a competitive advantage in the form of new service and application offering to meet global customers need. Major advantages of global supply chain include:

Total cost reduction

Better inventory management

Reduced cycle time

Better forecast accuracy

Improved capacity and productivity

Diversified business and trading

Enhanced international connection

Delivery improvement and satisfied customers

Accessing untapped market

Enhanced speed and efficiency

But at the same time there are several obstacles that need to take care while designing the global supply chain. These obstacles include:

Member vs. non member nations

Inefficient transportation system

Differences in language and currencies

Trade imbalances and tax policies

Operational threats and strategic challenges

Hence while deciding on expanding business Opportunities Company can follow one of the models mentioned below for selecting a global supply chain:

Own and manage your own infrastructure

Use strategic alliances

Partner with an asset-based third-party

Partnership with a global integrator of logistics services

There are several pros and cons of each model as summarised in below table:

Hence companies to debate on the trade-off before selecting the model for their global supply chain management and enhancement.

Porter's Five Forces Analysis - SCM software Industry

Rivalry among competitors-high

No of competitors:

There are a no of IT players providing supply chain solutions these days that include a number of big as well as small end firms. E.g.: Oracle, JDA, SAP, Microsoft etc. Hence the market is not very attractive for smaller or less established names to foray into if we go solely by number of competitors that are present in the market

Industry Growth:

With the worst of the global economic recession behind, the global supply chain community management solutions market returned to double-digit growth in 2010, according to a new report from market research firm Gartner.

In 2010, the market increased 10 percent to reach $6.8 billion in revenue, according to Gartner's report. That came after the supply chain community management market contracted 2.1 percent in 2009 with revenue at $6.1 billion. Gartner predicts the market could continue to grow moving forward.1

The rate of growth however makes it an overall attractive market to invest in

Fixed Cost:

The software industry traditionally is a low fixed cost one which makes it easier for new players to enter and existing players to exit in case of trouble; however fixed costs have increased now with real estate prices soaring up and office spaces are e=getting more and more expensive.


With increased competition product differentiation has become much harder to attain

Switching Cost

Generally higher, as lot of the solutions are proprietary and supported only on a particular platform. The process of switching platforms, migrating databases and systems would be complex, risky and expensive

Threat of new entrants-low

Economies of Scale:

There are lots of established players in the market who have better access to skilled labour via established brand names, better financial position, wide coverage through multinational presence and marketing capabilities. They have a distinct cost advantage via their established distribution network, fine tuned organizational structure over new players.

Brand Identity:

Lot of existing players such as SAP, Oracle, JDA are very well known in the industry and would be likely to command considerable influence in purchasing decisions of any SCM solution buyers. Hence relatively unknown and newer players may find it difficult to overcome challenges posed by these competitors while selling their products in the market

Capital Requirements:

The capital requirement in such an industry is not very high due to low fixed cost requirement and most of it is aimed at acquiring skilled manpower.

Entry Protection:

Most of the solutions and existing products would be patented and existing players would have exclusive rights to sell their solutions to large customers via long term contracts which would be difficult to overcome by new entrants.

Threat from substitutes-low

Availability of substitutes:

There is no real substitute for internet and software products at this moment. However there is threat from other software companies that may develop better products or offer similar products at a cheaper price to buyers. The companies facing intense competition, erosion in margin and profitability have no choice but to spend more and more on attaining a leaner and efficient supply chain across its length and breadth in today's complex business world. Hence in an industry like this the product offerings by various vendors that do not have typically have lots of differentiation, buyer's propensity to substitute should be lower, unless that gives them sufficient cost advantage. The market for scm solutions has experienced considerable growth recently with no. of new players emerging with their offerings alongside existing players, and large number of solutions is available to buyers from multiple vendors now.

Switching Cost

As discussed already switching costs are considerably higher.

Power of Buyers-moderate

Number of Buyers:

The potential and existing buyers for SCM solutions is considerably large, with players from different industries attaching more and more importance to attain efficiency in supply chain via state of the art tools with ease and reliability. As there are many buyers the individual bargaining power is less, although bigger buyers can still exert wield substantial power.

Buyer Switching Cost

As the switching cost is high, buyers can not readily switch vendors

Importance of product

SCM solutions have attained utmost strategic priority in the competitive and dynamic business environment today and are being looked upon as essential by companies from various industries.

Threat of backward integration

It would require huge amount of manpower, different skill set, considerable time and set up effort for buyers to produce solutions on their own, while maintaining the focus on their core competencies. Hence threat of backward integration is generally considered lower.

Buyer profitability

SCM solution with aid of technology has proven to be very successful in modernizing and making more efficient the entire supply chain of various organizations, right from inventory management to markdown optimization, impacting profitability to a great extent.

Power of Suppliers-low

No. of suppliers

The solution providers depend to a great extent on efficiency of it s skilled workforce of engineers and IT specialists. Countries such as India and China have vast talent pool of such resources available at a lesser cost which is a big advantage for multinational companies providing such solutions.

Switching cost

Although companies spend considerable time and effort in training employees and equipping them with requisite skills, switching cost when some of them leave or are laid off is not very high due to network effect.

Threat of forward integration

Considered low as at an individual level it's is not easy for developers, managers to venture in the field and compete on equal footings with the large MNCs offering solutions due to lack of resources, patents , rights and government regulations. They will also need to have sufficient financial backing, market research team and proper organizational structure in place before they can start offering solutions on their own.

Degree of differentiating inputs

Another kind of suppliers is internet service providers who however have substantial bargaining power as the dynamic nature of the industry calls for constant up gradation of current infrastructures to handle demand and slow and inefficient interface may drive consumers elsewhere.

User's perspective of supply chain management software

Earlier companies used to treat supply chain management as simple boxes with labels such as ERP (Enterprise resource planning), TMS (Transportation Management System) and WMS (Warehouse Management System). Basically these small boxes were a part of bigger boxes as a company. Company's idea was to connect all these small boxes by a straight line to create a coherent system. Now a day's supply chain combines all the best practices and smart tools whose ownership needs to be shared among all partners in the chain.

In today's volatile and dynamic scenario companies need to think out of the box in terms of technology vendors as well as their clients - People who facilitates and use the communication line within and between all boxes in the supply chain network. In order to respond to multiple what-if's scenario companies need to have microscopic access of their transactional data in their supply chain systems.

Hence in today's world SCM solution users are searching for analytics capabilities as a key factor with SCM solutions, as they provide an efficient way of analyzing plethora of data, within much larger databases. Performance is the main indicator of how well practices and technologies are applied for all the involved partners in a global supply chain.

According to "TEC survey data, 2012":

20 percent of organizations are planning to change or acquire SCM software in 2012.

The most frequently cited principal barriers to improved SCM processes were budgetary constraints and corporate culture.

Users of SCM software's are currently looking on the following factors while selecting a vendor:

Ease of Complexity management of their supply chain network

Adopt best practices for achieving insight into the chain

Effectively and efficiently collaborate throughout the chain in order to address major unexpected issues

Increase operational efficiency by extending the reach of processes to partners

Provide flexible and proactive approach to resolving issues affecting their supply chains

Significant cost saving and cost savings and enhanced business opportunities

Hence In this competitive environment in order to achieve upper hand against your competitor one need to provide better products and at the same time should be able to manage the complexities of their complex supply chain network. They need to incorporate best industry practices and efficiently and effectively collude throughout the value chain in order to address major unexpected issues.

Strategies for Supply chain segmentation

Kelly Thomas, SVP of Manufacturing Industries at JDA Software, talks about the growing trend toward supply chain segmentation, key considerations for practicing supply chain management professionals, and the value can be achieved for both enterprises (such as Dell Computer for example) and their trading partners. 

What is Supply Chain Segmentation?

This is primarily method by which companies can create profitable one on one relationship between customers and their supply chains. The focus these days is on creating a differentiated response capability to a given product and a given customer by leveraging existing asset base, thus creating virtual supply chains across these asset bases. Using advanced information technology is critical in achieving this which act as a substitute to actually deploying these assets and create the simulation.

Key Considerations while Segmenting

There are a number of factors all along the value chains from customers to suppliers. Some of which should be considered are

Differentiated order promising for different products for different customers

Differentiated allocation models for different products

Differentiated inventory and forecasting policies for different floor dynamics/product dynamics

Consideration of main priorities in production plan

Replenishment modes for customers and suppliers

Also the companies should have in place a robust policy to coordinate all the above factors and implement them both upstream and downstream the supply chain

Value Addition via Segmentation

Profitability is a major consideration. Studies have shown that 30-40% of the product portfolios of product based companies these days are not profitable. Segmentation helps understand better profitability of each product and customer portfolio and helps companies in making informed decisions about which portfolios to keep and which to discard

Software Solutions are critical to achieve segmentation that help companies achieve differentiated replenishment capabilities, inventory policies, order policies etc based on dynamics of products and helps them achieve multi channel segmented supply chain in areas such as retail, distribution , enterprise and web based segment. One such example is Dell which has evolved from being a leader in direct web based order configuration model to segmented model via use of information technology along its supply chain

Supply chain management software providers/vendor segmentation:

Vendors are segmented into the tiers which represents the functional scope of their products. In this classification the quality part is not included.

Tier-1 Vendors: These are the major players in the industry who are present in almost every chain of the supply chain management system.


JDA SCM solutions: Their software's Includes separate but integratable solutions for demand management, merchandise operations, network design & optimization, supply chain planning, etc.

Microsoft: Microsoft Dynamics AX includes solutions for the distribution and retail sector.

Oracle: Oracle E-Business Suite includes ERP functionality along with the SCM solutions like Advanced Procurement, Value Chain Planning, and Value Chain Execution.

QAD Enterprise: Their range of application includes ERP functionality along with the SCM solutions like Purchasing, Supplier Performance, Supply Chain Planning, Distribution Requirements Planning, Enterprise Operations Planning, Consignment inventory, Warehousing, Release Management, Transportation Management, and Supply Chain Portal.

SAP: SAP Business Suite software, includes ERP functionality along with the SCM solutions like SAP SCM and SAP SRM.

Tier 1 Solution providers/vendors description:

1. JDA Software Group: JDA supply chain solutions helps companies to grow their revenue, increase profits as well and achieve efficient and sustainable operational goal. They have extensive expertise in technology as well as knowledge capital in the form of its talented people which adds to their brand name that enables companies around the globe to transform their supply chain into powerful competitive advantage.

Industry: Consumer Goods, Food, Manufacturing, Retail, Electronics, Distribution, Pharmaceuticals

Region: North America, South America, EMEA, Asia-Pacific

2. Microsoft: They are worldwide leaders in software, service and solutions. Microsoft Dynamics AX is a complete ERP solution which provides core functionalities for financial, human resources, and operations management.

Industry: Manufacturing, Distribution, Retail, Services, Public Sector

Region: North America, South America, EMEA, Asia Pacific, Middle East

3. Oracle: Being a leader in database software over the years they have further developed their technologies and acquired many best in class companies as well. Currently they are expanding that leadership to the entire technology stack, from servers and storage to database and middleware, through applications and into the cloud.

Industry: Manufacturing, Distribution, Retail, Services, Public Sector

Region: Global

4. QAD: It was established with a vision to develop software's only for manufacturing companies today they have presence across more than 5,500 manufacturers in 90 countries.

Industry: Automotive, Life Sciences, Food, Consumer Products, Manufacturing

Region: North America, South America, EMEA, Asia-Pacific

5. SAP: Having more than 54000 employees across the globe they are currently present in 50 countries worldwide. Their ERP solution can be tailored to specific industries and also provides support to several global companies in their day to day operations.

Industry: Manufacturing, Distribution, Retail, Services, Public Sector

Region: Global

Tier-2 Vendors: These are the players who are present in most of the parts of the supply chain but they have their strong hold and some of the particular segments.


EPICOR: Epicor solutions software's includes services like Planning and Scheduling, Product data Management, Production Management, as well as Supplier relationship Management

IBM: Sterling commerce solution that is build for ERP also can be tailored for serving SCM requirements

Infor: Infor10 solutions include SCM solutions like S&OP, Supply chain planning and execution, as well as supply chain execution for logistics providers.

Lawson: They provide ERP solutions which can be tailored to SCM solution as per customers need

Pronto Software: Pronto XI solutions provides ERP functionality like financials, distribution and reporting along with separate modules for Sales and Marketing as well as Supply chain Management

RedPrairie solutions: They are into visibility and performance management solutions, inventory and transportation management as well as store operations solutions.

Sage: Sage ERP X3 solutions includes distribution management as well as E-commerce and web services solutions

Tier 2 Solution providers/vendors description:

1. Epicor: Epicor provides cost effective, while extremely powerful SCM solutions and domain expertise. They currently hold more than 20000 customers across 150 countries.

Industry: Manufacturing, Distribution, Retail, Services, Public Sector

Region: Global

2. IBM: Their sterling commerce solution is a leader in B2B integration secure file transfer, and multichannel selling and fulfilment, is now part of IBM. They provide smarter commerce solutions which redefines commerce in the age of customer.

Industry: Distribution, Retail, Services, Manufacturing

Region: Global

3. Infor: They provide enterprise and service solutions that improve operations, drive growth. They currently hold more than 70000 customers across 164 countries.

Industry: Automotive, Aerospace, Chemicals Distribution, Equipment Service Management, Fashion, Food, Healthcare, High Technology, Hospitality, Manufacturing, Public Sector

Region: Global (30+ countries)

4. Lawson Software, an Infor Affiliate: A leader in ERP solutions and helps companies to achieve optimum customer service levels and maximum efficiency and profitability.

Industry: Aerospace, Distribution, Equipment Service Management and Rental, Fashion, Food, Healthcare, Manufacturing, Public Sector

Region: Global (40+ countries)

5. Pronto Software: They full-fills modular offering of ERP and supply chain requirements.

Industry: Automotive, Manufacturing, Chemicals, Retail, Hardware, Utilities, Construction, Mining, Facilities, Service, Industrial Machinery, Wholesale Distribution

Region: Asia Pacific, Americas, EMEA

6. RedPrairie: Present in global supply chain and retail technology and ensures visibility and collaboration in SCM. They currently hold more than 60000 customers across 50 countries.

Industry: Building Products, Consumer Goods, Food, High Technology, Industrial Wholesale, Pharmaceutical, Retail, Third-party Logistics

Region: Americas, EMEA, Asia-Pacific

7. Sage (Sage ERP X3): They help small and medium size companies in enhancement of their business management process. The solution supports all operations across finance, distribution, and manufacturing within one singular software design.

Industry: Manufacturing, Distribution, Retail, Services, Public Sector

Region: Global

Tier-3 Vendors:


Agentrics solutions: They provide solutions which include Supply Chain Synchronization and Integration, Communication and Collaboration

Cegid: They provide solutions for retail management

Demand Management Inc: Their range of application includes solution for Forecast Management, Requirements Planning, Sales & Operations Planning, Retail Planning, Collaboration, and Advanced Planning & Scheduling

EBizNET: They provide transportation management solutions.

MCA solutions: Their range of application includes Performance Management, Business Design, Demand Forecasting, Inventory Optimization, Supply Planning, Contract Management, Network Design, Budget Management, and Supplier Management

Tier 3 Solution providers/vendors description:

1. Agentrics: They provide inventory management solution. Agentrics supports some of the largest retailers, pharmaceutical, and general manufacturing companies worldwide.

Industry: Manufacturing, Distribution, Retail, Services, Food

Region: Americas, EMEA, Asia

2. Cegid: They are present in retail, manufacturing, hospitality, wholesale, and public administration. Yourcegid Retail covers planning and purchasing to distribution and sales, but its offer extends beyond the implementation of systems to include a total customer partnership.

Industry: Retail

Region: North America, EMEA, Asia

3. Demand Management Inc: They are present in almost each aspect of supply chain including inventory management, demand management forecasting collaboration and enhanced inventory replenishment. They currently hold more than 2000 customers across 70 countries.

Industry: Apparel, Consumer Goods, Energy, Food, Pharmaceutical, Public Sector, Retail, Service Parts, Distribution, Manufacturing

Region: Global

4. EBizNET Solutions: EBizNET transportation management solution enables shippers determine efficient routing, taking weight, cube, service, commodity, region, mode, and other factors into account in real time.

Industry: Third-party Logistics, Retail, Pharmaceuticals, High Technology and Telecommunications, Automotive, Food

Region: Global

5. MCA Solutions: They provide software's for service part planning and optimization that helps their clients to manage their service business in better and organized way.

Industry: Service Parts Management for Aerospace, Defence, High Technology, Industrial Manufacturing, Automotive, Ocean Carriers

Region: Global

Supply Chain Excellence (Best Practices):

In today's world in order to have a excellent supply chain management one need to have improved visibility across the supply chain, closer relationship with suppliers and better inventory and demand planning systems. Cost savings from the supply chain efficiency can utilize in the form of better price to customers and investments in innovation. In order to compete as a whole supply chain, lines of communications and collaboration must be strong between partners.

Now a day's manufacturers are constantly under pressure to find out low cost suppliers or to offshore more production which results in more complex supply chain structure.

Enterprise software has so far focused on optimizing the enterprise. As shown in below figure: "Systems are focused to ensure that the company is as efficient as possible, while pushing risk and costs onto other parts of the supply chain" This strategy has worked very well for supply chain leaders. Large retailers like Wal-Mart have continually increased their own profits even as consumer prices come down by squeezing their suppliers. The price pressure is systematically pushed along the supply chain at each stage.

Most supply chains today have a main player focusing on pushing cost and risk off to others. But the most efferent strategy should be focused on optimizing the entire value chain as shown in the next figure. This will ensure efficiency saving is shared among partners and even greater benefit to each. This strategy can only be effective by having close collaboration and cooperation between the partners. This will require integration of enterprise systems in order to facilitate data flow quickly up and down the chain which will help each partner to make right decisions at right time.

To create a truly competitive supply chain, the focus must shift to the customer and to making all partners effective. Supply chain excellence comprises key elements:

Effective integration among suppliers and partners

Better synchronisation among planners by use of alerts and updates

Collaboration techniques to ensure smooth manufacturing process

Best Practices in Supply Chain Operations Reference (SCOR)

SCOR is a process reference model developed by Supply-Chain Council and PRTM (Management consulting firm). It is a cross industry standard diagnostic tool for SCM. SCOR facilitates companies to address, improve and communicate SCM practices inside the organisation as well as across all other parties included in the value chain. It is a management tool which takes factors into consideration from supplier of supplier to customer of customer. There model is segmented in three main parts as shown below:

In order to constantly improve its technique which is followed by distributors, manufacturers SCOR model basically compares itself with the industry best practices. This model has been adopted by major industries and players and its latest version is 10.0.

1. Process building blocks: This is based on five different processes in management such as Plan, Source, Make, Deliver and Return.

Source: Supply chain council

Plan: Includes processes to balance aggregate supply and demand which best suits sourcing, production as product delivery requirements. Basically it's balancing of requirements against available resources.

Source: Includes processes to procure services in order to meet actual or planned demand. These are the activities that connect companies to their suppliers.

Make: Includes process that converts product to a finished state to meet the real demand. Make documents that process that transform and converts RM to finished goods.

Deliver: Includes processes that are responsible for providing actual demand to customers. In this phase order, distribution and transportation management are included. These are the activities that connect companies to their customers.

Return: Includes process related to returned goods and services. It is generally associated with post delivery services. It's about how to manage returns from customers and suppliers.

Process classification is done as shown in figure:

Source: Supply chain council

Hence the overall aim of SCOR is to link company strategies with business operations in order to achieve consistent business goals.

2. Performance measurement metrics: It's all about measuring how well the supply chain is operating and performing. These performance measurements should:

Link to business objective

must be repeatable

Must provide insight about how to manage SCM more efficiently

Must be appropriate for the particular process activity

3. SCOR best Practices: After the performance of the SCM operations has been measured and performance lags identified, it becomes really important to identify which other activities should be performed to close those gaps. SCOR 10.0 divides best practices into following major segments:

a) Green SCOR: Since sustainable business model and environmental accounting are growing business concerns hence there is a need to measure total environmental footprints. There are multiple approaches for measuring the total environment footprint of an organisation or SCM with no agreed upon standards. Hence SCOR provides an excellent foundation for environment accounting in supply chain.

b) SCOR risk management: It is about systematic identification, assessment and mitigation of potential disrupt in the logistics network with the overall aim to reduce the negative impact on supply chain networks performance. SCOR is comprised of three phases as shown below:

Source: Supply chain council

SCOR also enables risk monitoring like supplier risk monitoring for the purpose of improvement. In SCOR 10.0 people section is also added. In this section factors like skills, experience, aptitude, training and competency is taken care for people associated in the supply chain process.

Investment trends in SCM solutions

In 2011 SCM software applications included with maintenance and services part as well accounted for $8 billion roughly. This figure also includes procurement applications as well. As against 2009/2010 survey results according to "2012 Supply Chain Software Users Survey" survey results spending in SCM software industry is going to increase in 2012. Since companies are willing to add more or upgrade existing supply chain technology which will cater to the larger investment by companies. Highlights of the survey results are shown: bel

Hence SCM solution provider vendors need to enhance their business and increase their size by acquiring new customers and providing them tailored and customized solutions.

Notable Trends in Supply Chain Software Industry

In 21st century as software is leading the way, Supply chain Management tools enables companies to adopt cost minimization measures, optimise their resources and efficient deployment with the help of accelerated information processing and automation process. Companies enhancing their global supply network for cost efficiencies and time to market. Several trends in major supply chain software categories as follows:

1. ERP/SCP: Economic volatility also adds interest into supply chain management. Events like floods and earthquakes put further challenges in today's SCM networks. In order to deal with this type of volatility, complexities as well as disruptions one needs to use SCM tools.

Companies are treating customers as a king and searching for improvements in their demand planning, supply chain visibility and orchestration of their supply chain activities

Forward looking companies are treating SCM software as differentiator and engine for business growth

Innovation : SCM is seen as a tool as innovation in order to differentiate in market

Now a day cloud computing, software as a service and mobile devices are hot topics

2. Warehouse Management system (WMS): According to Garner report market for WMS software grew by 15%, and once again topped $1 billion. Market in this space is largely driven by upgrades and replacements because old software's cannot handle price picking.

3. Transportation Management System (TMS): In 2011 market in this segment grew 15%. Demand in this segment was driven by tight capacity as well as high fuel costs. Companies are typically implementing transportation sourcing and benchmarking modules rather than optimization engines. Companies are also looking for SCM execution convergence.

4. Manufacturing Execution System (MES): There is a need to educate executives that MES can add value to their existing ERP system. In future there consolidation is expected in this segment as large players are acquiring point solution providers to increase their offerings.

SCM success drivers: There are several SCM drivers which finally matters when a company decides for a SCM solution vendor. The key drivers for getting projects from companies are as follows:

Improve customer service

Target supply chain contribution to target business growth

Innovation and technological breakthrough

Improve efficiency and productivity

Reduce cost

Improve business process

Hence SCM solution providers should keep above points and come up with the software's that take care of all the above specified goals in an efficient manner.