Demand-driven Manufacturing and Warehousing: Challenges and User Recommendations

The global provider of enterprise resource planning (ERP) and supply chain management International Business Systems (IBS) offers a modular solution called ASW Manufacturing, which was developed as a demand-driven manufacturing solution geared to handle very fast manufacturing cycles and short lead times, small orders of custom products, and other customer demands. This is because with manufacturing resource planning (MRP) attaining and maintaining agility requires a lot of re-planning to meet customer needs, which causes the so-called "nervousness" of the system. IBS does offer flexible rescheduling tools that integrate with existing MRP systems for companies that have already invested in such systems. Given IBS does not compete in complex engineer-to-order (ETO) manufacturing environments, its manufacturing capabilities revolve around planning, execution, and monitoring high volume light manufacturing and assembly operations. It lets actual demand drive the user enterprise's production, ensuring supply chain flexibility, while planning on several levels and time frames to ensure maximum agility. The system also can configure and build products to company-specific requirements to effectively plan capacity, while handling complex product structures.

Demand-driven manufacturing is related to warehousing management, since the warehouse is no longer a static storage facility. It now has to use near real-time data to closely match supply to demand, eliminate the need to hold excess inventory, and increase the flow of goods throughout the supply chain. Therefore, due to the supply chain execution (SCE) software's capability to handle these complex requirements, there has been a trend of postponing many light manufacturing operations, such as final assembly, customized packing, labeling, engraving, etc. from shop floors to warehouses and distribution centers (DC). Consequently, a warehouse management system (WMS) package plays a key role in any company's manufacturing postponement strategy to delay the customization of products until after the products, or a set of common components, have left the manufacturing plant. To meet this need, IBS has added more functionality to its WMS module. The value-added services capability, which includes, kitting assembly and disassembly, multiple/multi-level bills of material (BOM), special instructions and labeling should help IBS' customers reduce the costs associated with their supply chains. In the supply chain, the most significant facilitators is postponement, and that is where kitting helps because it allows enterprises to keep their products in a more generic state for as long as possible.

The ASW Warehousing solution comes in two versions, including one for traditional and highly automated environments, and cover all the necessary functionality for efficient operations and management of warehouses. They provide the tools and functions for optimizing the use of space, while automating reception, put-away, location replenishment, picking, warehouse maintenance, packaging, shipping, radio frequency (RF), storage and product definition, and warehouse administration and monitoring. IBS' WMS process helps ordered be picked faster and with increased accuracy. Processes are based on product movement frequency, optimized resource activity through precise and accurate instruction handing. Fast return on investment (ROI) with staged implementation possibilities can be achieved.

Ultimately, the ideal WMS keeps items in the warehouse are moved quickly and as accurately as possible. The application must update all the quantities for a particular customer in real time, at the moment of picking. The system then makes up the work orders sequentially, and wirelessly relays this information to the screen of the forklift operator in the warehouse. The first item listed is the shipping box/package, which the operators picks up and labels. As the operator scans the bar code to confirm that the item has been picked, the next package in the queue and its location appear on the screen. Once the shipping box is full, it is sent to the packaging station where cushioning material and out packing material seal the package. From there, the packages are driven either directly onto a trailer or to a staging area awaiting the truck.

Employees, ranging from truck drivers to warehousing shift managers, only see the information they need, but can access more information, if necessary. As items move, a replenishment list is created so operators can move items from storage to the picking shelves. For more of pertinent information, see ERP and WMS Co-Existence: When System Worlds Collide.

Additionally, the IBS ASW suite has a pervasive built-in event or alert management, with triggers in the system to warn users of problems in the supply chain, enabling them to respond accordingly before it impacts the customer. This management by exception monitors critical or sensitive activities with exception rules and notification via multiple channels, and with reaction monitoring and audit trail. Some user-definable alert examples take place when a critical purchase order is not delivered or is late, when the particular customer account fails the credit check, or when an order fails margin limits.

User Recommendations

Those in Adonix' target market as well as general, multisite and multinational distribution and manufacturing companies (and their divisions) with a revenue of $30 to $300 million-a-year (USD) and with up to 200 concurrent users per site, should consider the company's value proposition. However, they avoid selecting it without looking at what the other vendors have to offer. Adonix often comes ahead of larger global players in terms of functional fit, pricing, and understanding of the local requirements in the distribution area. Enterprises in France or Southern Europe (especially Spain and Portugal) should short-list X3. However, customers outside Adonix' successful geographies may want to exercise due diligence and check Adonix' regional support before moving forward.

Before the CIMPRO acquisition and subsequent array of wins, the US market had been somewhat slower to warm up to Adonix' solution, which is not surprising given the number of incumbent peer solutions that are already present. Nevertheless, for US companies with small domestic and international operations, Adonix can prove to be of interest, as it is already available in seven languages (English, French, Italian, Portuguese, Spanish, modern Chinese, and Mandarin Chinese), and the sales and financial product modules have localized features. The company has had a number of successful international implementations and support for subsidiaries of larger enterprises outside France, which should help it overcome some local prospects' possible anxiety to deal with—until recently—a relatively unknown vendor.

The industries that would most likely benefit from using its products are discrete and process industries with standard manufacturing and extensive distribution requirements such as consumer packaged goods (CPG), wholesale, retail, chemicals, industrial and commercial machinery, electronic and electric supplies, furniture, rubber and plastics, etc. Adonix Geode GX might be a good WMS solution for mid-market companies that are growing and want software that can be re-configured to grow with them, with little or no providing vendor's intervention, and which want to extend their existing IT assets incrementally.

From a functional standpoint, a company considering Adonix should currently receive or ship more than 5,000 truckloads or 1,000 parcels per day, currently replenish a forward picking area manually, need variable configurations for multiple warehouse sites, and manage more than 200300 stock keeping unit (SKU). Furthermore on the prospective users' profile, they often need to interact with automated equipment such as conveyors, and they might need software to manage complex or multiple workflows including serial numbers, lot control, date controls, and kits, likely with unlimited desktop access through a thin client or browser-based user interface.

Existing users of earlier product releases may benefit from querying the company's future product development, product migration path, and service and support strategy. Incidentally, while Gruppo FORMULA users should like their prospects' offerings, they should consider Adonix' impressive acquisition track record, and ask the vendor for more product roadmap details to see the potential benefit from functional convergence with X3. The same holds for Adonix X3 users, who should take the time to discern any possible benefits and synergies between merging the two ERP product lines

ERP and Warehouse Management: Technology, Challenges, and User Recommendations

Leveraging a common development framework is an important distinction for midsized companies seeking an ERP back-office system with strong warehouse management capabilities, and Adonix is one of the few software vendors with such an integrated offering on the same platform. Based in France, this privately-held vendor offers enterprise solutions to medium, process and discrete manufacturing companies. Other mid-market enterprise resource planning (ERP) vendors Infor (former Lilly Software), Epicor Software, IBS, SYSPRO, Exact Software, 3i Infotech, and Sage ACCPAC, also offer strong warehouse management system (WMS) products in addition to their traditional ERP products, and could prevent the likes of Manhattan Associates, HighJump, Catalyst Internationals, RedPrairie, and Provia from penetrating the ERP mid-market, in the less complex environments, with basic case and pallet picking, straightforward task interleaving, and selectable radio frequency (RF), label, and paper by work area requirements.

Part four of Adonix' Mid-Market FORMULA—Adopting Best of Both "Organic Growers" and "Aggressive Consolidators" series.

Although we do not debate the WMS, transportation management system (TMS), yard management system (YMS), small parcel shipping (SPS) functionality or even supremacy of these best-of-breed players, many prospective customers may like the trade-off of marginally less robust functionality for a one-stop-shop arrangement from their ERP provider. Moreover, the sluggish economy has recently caught up with the otherwise resilient supply chain execution (SCE) market and the competition has intensified because ERP vendors, particularly tier one vendors such as SAP, Oracle, and SSA Global (see ERP Vendors Intrude on SCE/WMS Safe Haven), have also entered the market.

Many ERP/WMS one-stop-shop solution-seeking customers will likely achieve significant integration cost savings by taking advantage of the Adonix Geode GX system's pre-defined, two-way interface to X3. This interface may become invaluable in passing customer, order, shipping, and packaging information between the two applications, especially for performing value-added activities like multi-packs, repacks, and picking verifications in the warehouse, and in producing accurate bills of lading (BOL) and customer invoices. For more info on how pesky this interfacing between disparate applications and the need for data replication can be, see ERP and WMS Co-Existence: When System Worlds Collide.

This is Part Four of a four-part note.

Part One detailed the company and its products.

Part Two discussed Adonix' strategy.

Part Three analyzed Adonix' warehouse management system response.

Challenges

Still, there are relatively limited financial resources to adequately fund multiple key strategic initiatives, when compared to the research and development (R&D) investments of bigger competitors' l SAP, Oracle, or Microsoft Business Solutions R&D (absolute values versus in percentage of total revenue). Developing global channel and brand recognition, and facing formidable competition within the Adonix' target market (particularly the North American market) are the challenges Adonix will have to reckon with.

The business remains challenging to even the most established mid-market vendors, since an intensifying product architecture rejuvenation and functional enhancements cycle and continued market consolidation exert fiscal pressure across the sector. To that end, the vendor has another predicament to solve, as the conglomeration of Adonix legacy applications over 3,500 customers, many of whom need to upgrade mainframe applications to newer architectures. Although Adonix is targeting these as well, it remains to be seen whether the new X3 product can meet the demands of larger corporations among this install base that continue to rely on the legacy applications. Adonix' focus on mid-market might not fly with some of these companies, where it will have to overcome the market perception of a relatively unknown, tier two ERP vendor, while trying to cater to all these different markets will fly in the face of having one face to the customer worldwide, i.e., brand recognition.

Adonix must be careful not to spread its development resources too thin trying to maintain its multiple platform product configurations. Moreover, despite its careful examination of market trends, Adonix needs to strengthen itself in two areas: is yet to be fully Microsoft. NETcompliant, and needs to have an radio frequency identification (RFID) client project in the US (however, Geode GX technology is RFID-compliant and with clients in Europe).

Because its R&D resources will have to be handled prudently and sparingly, Adonix will likely remain better suited to the more conservative mid-market companies that do not want to be on the "bleeding edge" of technology, and prefer to work with tried-and-true technology solutions. Customers currently not requiring native RFID capabilities, fall within this category; however, it is a matter of time when the need for RFID will present itself, giving many WMS players the competitive edge (see RFID—A New Technology Set to Explode?).

Further, however broad (to include both distribution, discrete, and process manufacturing) and wellbalanced the functionality of X3's is, in order to become recognized as a true differentiator in the market, Adonix will have to exhibit greater vertical focus beyond its few distribution industries. To that end, Adonix should develop templates, wizards, and implementation methodologies to further decrease the time and expense of implementation projects, as well as to vertically incline its product offering. Even if these sectors do not necessarily need strong product lifecycle management (PLM) and engineering capabilities, they still might need product information management (PIM) (see The Role of PIM and PLM in the Product Information Supply Chain: Where Is Your Link?), which is an area where Adonix has not been vocal, to say the least.

Also, the vendor should try to increase its base of reference accounts from the 1,200 or so companies that have purchased X3. The sixty-five sites it has in the US (which recently grew from former and new CIMPRO users) may still be insufficient to boost brand recognition and make a splash in the North American market. Internationalization requires significant investment. Additionally, Adonix' limited R&D funding needs to also to "beef up" its indirect channel, possibly with many more high-profile partnerships. These challenges are not only attributable to Adonix, which is certainly in a better situation than many of its smaller peers, such as Made2Manage Systems, SYSPRO, 3i Infotech, Softbrands, or Intuitive Manufacturing Systems, all of which have similar aspirations and hurdles.