| Abstract: | By including the integration of its on-demand supply chain planning service with a company's ERP system in its subscription fee, Kinaxis hopes to ease the transition for interested parties in its core vertical markets. |
| Keywords: | supply chain planning, demand-supply planning, supply chain optimization |
Less than a month after JDA Software announced in August its offer to purchase rival i2 Technologies for $346 million, supply chain software provider Kinaxis saw its opening and launched an incentive program it hopes will attract i2 customers uncertain about the company's future as it is absorbed into JDA.
Early in September, Kinaxis reacted to the latest deal in the steadily consolidating supply chain software market by offering current i2 customers an aggressive incentive to sign up for RapidResponse, Kinaxis' on-demand service for supply chain planning, monitoring, and response. Under the program, Kinaxis will waive its standard fee for integrating RapidResponse with a company's ERP system, which typically costs $100,000 to $200,000, according to officials.
"We wanted to get our hat in the ring ... by making it simple for i2 customers to switch," said Randy Littleson, Kinaxis vice president of marketing, in an interview. By including the integration of RapidResponse with a company's existing ERP backbone as part of its subscription charge, Kinaxis hopes to ease the transition for interested parties in its core vertical markets of high tech, electronics, industrial manufacturing, and aerospace and defense.
The company also hopes that the reduced costs associated with on-demand software will appeal to enterprises currently charged with maintaining applications installed on premise, Littleson added.
JDA had no comment on Kinaxis' moves.
Following the announcement of the JDA-i2 deal, Bob Parker, vice president of research at IDC Manufacturing Insights, a research firm, predicted that a number of small, best-of-breed supply chain application vendors, including Kinaxis, Axeda, and Logility, would indeed seize the opportunity to capitalize on the resulting market uncertainty. Late in August, Axeda launched its own "safe harbor" program for i2 customers, under which the company would offer a one-to-one exchange of its applications for previously owned i2 products at no cost.
But with inventory levels and lead times expected to rise in the near future as companies begin to consider more cost-effective and environmentally friendly transportation options, manufacturers have more reasons than market consolidation to re-evaluate their supply network technology.
"For most clients, today's application choices look nothing like the ones available when they made their original selections," AMR Research analyst Lora Cecere wrote in a recent research report. "Those companies that have built global planning instances to manage intercontinental dependencies for source, make, and deliver will be ahead of the game."
Kinaxis bills RapidResponse as a comprehensive offering that includes integrated demand-supply planning, monitoring, and collaborative response capabilities that surpass the abilities of traditional supply chain "optimization" software.
"Today's marketplace is characterized by frequent supply disruptions, volatile demand, and the fast pace of product innovation," Littleson said. Customers with complex, multi-tiered supply networks, he notes, need more than a static plan based on fixed parameters.
"Everyone still needs a plan, but the premium now is on this notion of monitoring the exceptions that will cause pain, and being able to take action," Littleson said. "The problem is that, more often than not, things aren't happening according to plan anymore."
This article originally appeared in the October 2008 issue of Managing Automation.
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