Moving forward with a retooled approach to supply chain management (SCM), i2 Technologies earlier this week unveiled the first new deliverable for its evolving service-oriented architecture (SOA) -- a consolidated procurement package aimed at manufacturers seeking a tighter grip on their geographically expanding and often outsourced supply networks.
The new software -- an adaptation of i2's existing procurement management package -- exposes underlying business process logic through the company's recently introduced SOA, known as the Agile Business Process Platform. Agile is built around WSDL (Web Services Description Language), an XML messaging format created by the Worldwide Web Consortium to enable applications to share document-oriented or procedural information.
The Agile platform comes with standard workflows that emanate from i2's long history of serving a variety of vertical markets with supply chain software and services. The "agile" nomenclature is brought to life by a visual programming toolkit -- i2 Studio -- that can be used to modify data models, business rules and workflows as operational processes evolve.
i2 Consolidated Procurement is the first of three new composite applications that take advantage of the Agile Platform which will be unveiled over the next two weeks, an i2 spokeswoman said. Up next is lean replenishment, which will be followed by collaborative supply execution, she noted.
The new consolidated procurement application addresses the needs of manufacturers small and large, many of whom are now contending with the unintended consequences of globally distributed sourcing strategies. Such strategies often lead to operational inefficiencies that threaten to undermine projected cost savings. Add outsourcing, a push to consolidate suppliers, growth through acquisition, quality variability, manual data entry and multiple part numbers for the same items to the mix and the procurement process has become exceedingly complex for many manufacturers to mange, noted Sharmistha Dubey, i2's director of solutions marketing.
To overcome these challenges, i2 Consolidated Procurement helps manufacturers to centralize purchasing and collaboration across divisions, suppliers and outsourced partners who may be located in different geographies and who may use different item types. It is said to enable manufacturers to create a single system of reference that can link to multiple back-end systems, helping geographically dispersed manufacturers to more easily reschedule, substitute or transfer inventory to meet local exception requirements, among other things.
"We're [providing] additional efficiencies to break down the barriers between materials planning and procurement," she explained.
An unidentified, large point of sale (POS) systems supplier based in Singapore has achieved significant reduction in order processing time and process productivity improvements, as well as significant inventory reductions since adopting the consolidated procurement application, she noted. The manufacturer, which relies on three separate MRP packages to run factories at its headquarters and in China and Malaysia, didn't want to replace its existing systems but wanted to get a better handle on materials pricing, while reducing its three-day purchase order processing time to hours and its supplier base from 2000 to 400 vendors.
i2's procurement consolidation package takes inputs from the POS manufacturer's three MRP systems and provides a consolidated view into existing inventory at all plants and locations, Dubey said. Custom-built business rules help to automate supplier allocation -- which was a manual process, she added. The application has also helped the POS vendor to rationalize its many part numbers from multiple vendors.
i2 sees the new software of particular interest to high tech, aerospace and defense and automotive manufacturers, many of whom are seeking to extract efficiencies from evolving globally dispersed supply networks. While the company is talking to existing customers, and hopes have them migrate to the new consolidated procurement package over time, it's not aggressively pushing the conversion.
"The focus now is getting more of a critical mass of new customers; we'll then look at upgrades," Dubey said.
This will be critical as i2 works feverishly to convince prospects that last quarter's tidy $31.5 million net profit is an indication that the company's long-promised turnaround is under way -- and that its SOA is ready for prime time.
"The whole concept is on the mark," noted William Brandel, a supply chain analyst with Industry Directions in Newburyport, MA, of i2's composite application approach. Despite the company's highly publicized financial problems, i2's strong installed base, perceived technology smarts and industry expertise should help keep it on the short list for manufacturers seeking to optimize supply chain execution with an SOA.
"Does this erase all of the issues? No, but i2 is still a brand out there. They're coming out of a [tough] situation, their financials are in better shape and, to a large extent, they've rationalized acquisitions and investments made," he noted. "How many enterprises have an SOA today? That frontier is wide open."