TradeStone Software Inc. yesterday revealed that it is offering its product sourcing applications suite as a hosted, on-demand service, a move the company hopes will appeal to smaller and medium-size product development companies, retailers, and other players in the global consumer-goods supply chain that lack the resources to deploy and manage licensed software on premises.
The TradeStone Suite is built on a J2EE foundation with composite applications for managing product information; quoting; multi-vendor comparisons; orders; bill of materials; logistics; and financial accounting. Because TradeStone was built on a Web services architecture, the transition to an application service was made without any changes to the suite's technical underpinnings, noted Kamal Anand, TradeStone's chief technology officer, in an interview with Managing Automation.
By adopting a software as a service (SaaS) delivery model, the company hopes to attract smaller consumer products players across the business spectrum that want to tap into the globally dispersed supply chain but are not able to due to financial and technical constraints, according to Holly Allison, TradeStone's vice president of marketing and business development. By using a Web-based interface, suppliers, for example, can bid on sourcing contracts, view production lead times, see quality assurance testing data, and gain visibility into logistics tracking -- tasks that are laborious for smaller players that lack more modern digital systems, she noted.
While end-to-end procurement systems have been of interest primarily to larger and more financially endowed companies, TradeStone hopes the SaaS version of its software expands the market opportunity. For instance, while the on-premises version of its software lists for between $300,000 and $1 million (based on the number of seats licensed and amount of services required), the SaaS version ranges from $100 to $300 per user per month (depending on the number of users) -- without any additional monies spent on application implementation and maintenance. Suppliers that just want to use the software to collaborate with retailers and product developers pay a small one-time fee to cover operating costs, a spokesman for the two-year-old Gloucester, MA, company said.
Another user benefit: minimal training time. When TradeStone Suite was built, the company sought to create a sourcing system with simplified field structures and workflows, since complexity at this level tends to limit the adoption of many enterprise applications, Kamal said. Because of its streamlined design, company officials said that user companies can be up and running on the SaaS version of TradeStone Suite within two weeks.
"We've received lots of positive feedback from customers on this," Kamal said. In fact, Allison added, "One customer has a MySpace about the use of our product, with a blog that contains ideas and examples of factories being added online."
Peer feedback is important to all companies, but it is particularly useful to product development companies looking to head off supply imbalance problems that can lead to stock-outs. Customers using TradeStone Suite can rate suppliers on their communication skills and ability to deliver quality products on time to store shelves, Allison said.
Another key benefit to small manufacturers is the suite's ability to help manage SKU proliferation. Say an MP3 manufacturer sources component products and contracts assembly to Asian companies, Allison said. The company needs all supply chain players to work in lock step to make sure it has the right product mix on retailers' shelves (an MP3 player without headphones becomes useless). TradeStone Suite enables collaborating business partners to see a single version of truth -- from product component, assembly, and delivery requirements -- and work together to meet business needs at the retail level, Allison pointed out.
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