Friday, December 4, 2009

Manugistics Indulges In The Open M&A Season

Manugistics, remains one of the leading providers of supply chain management (SCM) solutions, with the extra sophistication of its supplier relationship management (SRM), profitable order management system (POMS), and pricing and revenue optimization (PRO) innovations all under its EPO mantra. Manugistics indeed offers a considerable portfolio of high level value chain planning, scheduling, optimization and management systems, and, as of recently, the factory level advanced planning and scheduling (APS) systems too.

Although prior to its acquisition of the UK-based shop floor APS vendor STG Holdings in 2000, manufacturing has not been Manugistics' forte, having a history of building solutions for the distribution end of the supply chain, the recent development of shop-floor applications bundled with the pricing and revenue optimization applications, might enable the company to provide a holistic approach to enterprise optimization throughout design, source, buy, receive, make, move, store, price, promote, sell, and deliver phases. These can take place in different environments, including paper-based, electronic data interchange(EDI), web-based (XML), and/or real-time web-based collaboration. Its solutions support, and are used by, both private and public trading exchanges, particularly following its acquisition of SpaceWorks, a sell-side e-commerce provider, in 2001, they also support all major operating systems and databases.

Manugistics' suite has also long been constraints-aware - from supply chain planning level at the top, down to the detailed scheduling of machines. For manufacturing specifically, it offers a number of modules owing largely to its late '90s acquisitions of Avyx and Promira, and the above-mentioned STG. NetWorks Production Planning provides process optimization with multi-site synchronization in a large-scale production environment, based on a modeling language that enables detailed descriptions of complex flows for simulation, optimization and control. NetWorks Production Scheduling is aimed at rapidly scheduling complex, single-site production, helping companies to improve customer service while minimizing inventory through the identification and management of both capacity and material constraints. Finally, NetWorks Sequencing optimizes shop floor operations by generating detailed schedules that respect manufacturing rules and production constraints, it is a good fit for complex assembly line sequencing and multiple attribute-sensitive problems where user-defined rules generate schedules.

Coming back to WDS' acquisition, the arrangement seems to be mutually beneficial at first look. The acquisition brings Manugistics a roster of high-profile WDS' customers and brings along a deep domain expertise in defense contracting and in other similar asset-intensive industries. Manugistics should hereby also extend its offering from supply chain planning (SCP), pricing/profit optimization and transportation into MRO management focused ERP functionality (e.g., complex cost accounting and product configuration), which should blend well with Manugistics' solid complex bill of material (BOM) collaboration capabilities.

Also, its SRM offering should be rounded up, as the Buying Advantage e-procurement module should add unique defense contract capability to its supply chain application for strategic sourcing and collaboration, along with a connection to the Exostar aerospace industry marketplace. Having acquired WDS' execution information at the OEMs and the repair depots should improve the supply chain process as a whole.

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