Executive Briefings

The Supply Chain e-Business Top 100

The second annual list of leading-edge supply chain vendors is characterized by those that can offer fast payback, quick implementation and financial stability.

The second year of the Supply Chain e-Business Top 100 list of leading application vendors very much reflects the tumultuous shifts that have beset the industry over the past 12 months. Most of the transaction-oriented public exchanges are gone. There are far fewer of the highly promising web-native solutions focused on providing broad data visibility across activities and trading partners. The ranks of innovative point solutions for specific supply chain activity has thinned. Consolidation relentlessly continues in all sectors of supply chain applications. The few growth areas have been execution solutions, product lifecycle management (PLM) applications and large vendor suites.

While no one has given up on the goal of end-to-end solutions that share real-time data for demand, sourcing, production and delivery activities across the supply chain, the focus this year is back to basics. Companies are less concerned about broad collaborative capabilities that have hard-to-measure results and long implementation cycles. The focus is squarely on solutions that quickly achieve cost savings, often within the four walls of each company.

For example, AMR Research reports that the entire supply-chain management market will grow by only 13 percent growth this year. Supply-chain planning in particular has had a rough ride with 2001 sales declining 14 percent. In contrast, sales for execution solutions grew by 21 percent last year, and sales for supply chain event management (SCEM) skyrocketed by 182 percent. PLM is among the hottest application categories, with AMR Research forecasting 31 percent growth for 2002.

Peggy Vaughan, senior partner and global supply chain and operations solutions leader of PwC Consulting, says that budgetary pressures are driving companies to leverage existing technology investments, especially with their enterprise resource planning (ERP) systems.
"It's all about driving short-term value and avoiding risk," says Vaughan.

The primary beneficiaries of this trend have been the traditional ERP vendors, both large and small, who are busily extending their product lines with modules for every type of supply-chain activity with a strategy of selling up their installed base of users.

The 2002 Supply Chain e-Business Top 100 list is a clear reflection of these shifting trends. Thirty-seven of this year's Top 100 software vendors are new to the list. They replace companies that have been acquired, gone out of business, or more typically, are out of favor with supply-chain managers who have much smaller budgets and immediate bottom-line priorities. For example, last year's list included a number of sell-side vendors whose e-commerce and customer relationship management (CRM) solutions promised to use real-time demand information to drive supply chain efficiency. These promises have been too slow to materialize, so user interest has shifted to more execution solutions that can prove their value by immediately lowering logistics and fulfillment costs.

Regardless of these shifts, the purpose of the Top 100 has not changed. This list identifies market-leading application vendors whose solutions squarely address today's supply-chain challenges. In many ways, this list is the clearest indicator of what types of solutions users are seeking, and how well specific vendors are communicating the value of their applications. For supply-chain managers, we are confident that this list provides a starting point for evaluating the dozens of vendors vying for today's busy technology users.

Please note that the Supply Chain e-Business Top 100 is not a ranking or even a rating system. Such a task would be almost impossible since the range of supply-chain applications is so broad, the needs of users so diverse and the basis for evaluation so subjective. Our list is a consensus of opinions from many industry experts whose job it is to know what is happening in the world of supply-chain applications.

Our methodology
We at Supply Chain e-Business take full responsibility for this list, but as we did last year, we have developed it with help from more than 20 consultants, analysts and users who have wide expertise in what solutions are available, what is leading-edge and what is most useful.

We have created this list in stages. We mailed or emailed detailed questionnaires to nearly 200 vendors of leading supply-chain solutions followed regularly by our staff. In these questionnaires, we asked for specific information about sales, implementations, user profiles, as well as the solutions themselves and their specific features and benefits. We inserted this information on a grid we created for easier comparison, and shared it with our selection committee of consultants, industry experts and analysts who provided their evaluations. The final list was a compilation of their collective input.

The factors considered in evaluating vendors and their applications include the following:

1. Proven record of driving bottom line supply-chain performance

2. Marketplace success measured by the number of implementations, revenue earned, number of transactions, etc.

3. Usability, ease of implementation and simplicity of integration

4. Financial viability

5. Innovation and functionality

Factors considered
Our evaluation process is both objective and subjective. With nearly two years of data, we are able to look at total revenue, sales growth, number of implementations and other objective factors for most of the vendors on our list. A small sampling of this data appears on page 16. But such statistics as total sales revenue and number of implementations accounted for less than half of the criteria we considered. Our process attempts to look at the underlying value of the applications to users-not just the success the vendor sales force has achieved. For example, users tell us that the ease of integrating solutions with other systems within and beyond the enterprise is a critical factor. Similarly, these users tell us that a web-native architecture is important for fast implementation of solutions across supply chains. The consultants in our selection group who actually implement these solutions considered such factors.

Functional balance
Another factor that guided our development of the Top 100 list is balance. We wanted our list to represent vendors whose applications cover the broad range of supply-chain activities. We believe there are "six pillars" of supply chain technology. In addition to the standard four supply-chain activities of planning, sourcing, manufacturing and execution, we have added managing and selling solutions. Managing solutions include a broad list of visibility and event management tools that cross functional and enterprise boundaries. Selling solutions with a supply-chain focus include applications that use customer orders and other real demand data to drive the rest of the supply chain. The vendors in the Top 100 offer solutions in one or more of the following areas:

1. Planning, which includes such activities as
• Advanced planning and scheduling
• Constraint-based optimization
• Distribution planning
• Inventory planning
• Collaborative planning, forecasting and replenishment

2. Sourcing, which includes such activities as
• Indirect or MRO e-procurement
• Direct material sourcing
• Services procurement (including logistics)
• Contract management
• Spend management
• Supplier relationship management

3. Manufacturing which includes such collaborative production activities as
• Product lifecycle management
• Collaborative manufacturing management
• Collaborative product commerce

4. Management, which includes such inter-enterprise activities as
• Supply-chain event management
• Process management
• Supply-chain visibility
• Extended enterprise relationship management

5. Execution, which includes delivery-related tasks such as
• Warehouse management
• Fulfillment
• Transportation management
• Logistics collaboration
• Global trade management

6. Selling, which includes such sell-side activities as
• Order management
• Customer-relationship management
• Customer-facing portal solutions

Looking forward
A year ago, we predicted that our next Top 100 would look very different from the first list, and we were right. A turnover of 37 companies on our Top 100 is significant. With the turmoil continuing in our industry, no doubt there will be significant differences in next year's Top 100, but perhaps for different reasons. Consolidation will certainly continue, but we expect that there will be an upturn in the general economy that will allow corporations to think more strategically about their businesses and how supply chain technology can provide long-term competitive advantage.

"I am bullish on the supply-chain space," says John Leffler senior partner and global collaborative value chain leader of PwC Consulting, who predicts a major turnaround in investment in supply-chain applications within nine to 12 months.

"As IT budgets come back, supply- chain applications will be near the top of the list because of their unmatched ability to impact the bottom line and to provide competitive differentiation," says Leffler.
So which applications will participate in this much-anticipated resurgence?

It depends on how companies adapt to the new realities of e-business, according to John Leffler.

For example, collaboration has been the most over-used buzzword in the world of supply-chain applications. Every user and every vendor talk about it, but few companies are actually making collaboration a critical part of their technology infrastructure.

"A large number of companies are still very reluctant to share any information with their trading partners, so they are not really interested in applications that offer collaborative capabilities," says Leffler, who points to the slow adoption of e-procurement solutions in many industries.

"E-procurement is anything but collaborative for many companies," he says. "The focus is on getting the lowest price and leveraging the supplier in every way possible. Collaborative applications can only prosper when this mindset changes."

Leffler believes this change has happened in certain industries, like high tech, where outsourcing and rapid product lifecycles have forced companies to collaborate. Product designs, component specifications, production plans, demand forecasts, inventory levels and shipping information all have to be shared among suppliers, contract manufacturers and customers. Collaboration capabilities become just as important as the base functionality of the application.

PwC Consulting's Peggy Vaughan thinks that customer-facing applications will have their day in the supply chain marketplace, even though they have not yet made a major impact.
"The big win in supply chain is getting a solid handle on real demand and using that information to control all other processes," says Vaughan. "Real-time order management, collaborative forecasting, customer visibility all have to be made part of the total supply-chain process."

These industry experts may be right about these coming trends in supply chain technology, but it is the users who ultimately determine the winners by how they invest their precious IT dollars. That will be the subject of the 2003 Supply Chain e-Business Top 100.

For now, we present this year's Supply Chain e-Business Top 100. We hope it is useful to our readers as a tool to help identify viable applications from among the many hundreds of supply-chain solutions that are promoting themselves in the marketplace.

Click here to view the Top 100 list.

Plan: Supply-chain planning drives business value
Plan: Planning applications balance inventory supply and demand
Source: Sourcing technology must manage total cost
Manage: Exit supply chains; enter adaptive supply networks
Manufacture: Manufacturing needs a product lifecycle management strategy
Execute: Supply-chain execution expands its boundaries
Sell: Sell-side solutions and the customer-centric enterprise

Top 35 Supply Chain Vendors by 2001 Revenue
RankVendorTotal Revenue (Millions $Notes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Oracle
Invensys
SAP
PeopleSoft
Siebel System
i2
PTC
J.D. Edwards
Ariba
Intentia
Aspen Technology
Manugistics
IFS
JDA
QAD
Retek
Epicor
Manhattan Associates
FreeMarkets
QRS
MatrixOne
SSA Global Tech
EDS PLM
Frontstep
Swisslog
Kewill
EXE Technologies
Descartes Systems
Agile
Lilly Software
Industri-Matematik International
Vastera
Red Prairie
Intershop
Vertex Interactive
10,860.0
9,939.0
6534.0
2,073.3
2048.4
985.6
898.0
874.0
408.3
386.6
310.6
310.1
304.6
207.0
204.0
179.5
171.0
155.6
147.6
142.6
142.1
140.0
125.0
118.3
100.0
97.4
95.6
79.5
77.8
71.0
63.0
63.0
62.0
61.2
59.1
B
C
B
B
B





B

B








B





A







Financial and implementation data drawn from company reports and third party sources including Hoovers, SEC/Edgar and Dun & Bradstreet. Financial data not available for all companies.
Notes:
A. 2002 revenue figures
B. Includes substantial non-supply chain application revenue
C. Includes revenue for Baan, Caps Logistics as well as other Invensys companies

The second year of the Supply Chain e-Business Top 100 list of leading application vendors very much reflects the tumultuous shifts that have beset the industry over the past 12 months. Most of the transaction-oriented public exchanges are gone. There are far fewer of the highly promising web-native solutions focused on providing broad data visibility across activities and trading partners. The ranks of innovative point solutions for specific supply chain activity has thinned. Consolidation relentlessly continues in all sectors of supply chain applications. The few growth areas have been execution solutions, product lifecycle management (PLM) applications and large vendor suites.

While no one has given up on the goal of end-to-end solutions that share real-time data for demand, sourcing, production and delivery activities across the supply chain, the focus this year is back to basics. Companies are less concerned about broad collaborative capabilities that have hard-to-measure results and long implementation cycles. The focus is squarely on solutions that quickly achieve cost savings, often within the four walls of each company.

For example, AMR Research reports that the entire supply-chain management market will grow by only 13 percent growth this year. Supply-chain planning in particular has had a rough ride with 2001 sales declining 14 percent. In contrast, sales for execution solutions grew by 21 percent last year, and sales for supply chain event management (SCEM) skyrocketed by 182 percent. PLM is among the hottest application categories, with AMR Research forecasting 31 percent growth for 2002.

Peggy Vaughan, senior partner and global supply chain and operations solutions leader of PwC Consulting, says that budgetary pressures are driving companies to leverage existing technology investments, especially with their enterprise resource planning (ERP) systems.
"It's all about driving short-term value and avoiding risk," says Vaughan.

The primary beneficiaries of this trend have been the traditional ERP vendors, both large and small, who are busily extending their product lines with modules for every type of supply-chain activity with a strategy of selling up their installed base of users.

The 2002 Supply Chain e-Business Top 100 list is a clear reflection of these shifting trends. Thirty-seven of this year's Top 100 software vendors are new to the list. They replace companies that have been acquired, gone out of business, or more typically, are out of favor with supply-chain managers who have much smaller budgets and immediate bottom-line priorities. For example, last year's list included a number of sell-side vendors whose e-commerce and customer relationship management (CRM) solutions promised to use real-time demand information to drive supply chain efficiency. These promises have been too slow to materialize, so user interest has shifted to more execution solutions that can prove their value by immediately lowering logistics and fulfillment costs.

Regardless of these shifts, the purpose of the Top 100 has not changed. This list identifies market-leading application vendors whose solutions squarely address today's supply-chain challenges. In many ways, this list is the clearest indicator of what types of solutions users are seeking, and how well specific vendors are communicating the value of their applications. For supply-chain managers, we are confident that this list provides a starting point for evaluating the dozens of vendors vying for today's busy technology users.

Please note that the Supply Chain e-Business Top 100 is not a ranking or even a rating system. Such a task would be almost impossible since the range of supply-chain applications is so broad, the needs of users so diverse and the basis for evaluation so subjective. Our list is a consensus of opinions from many industry experts whose job it is to know what is happening in the world of supply-chain applications.

Our methodology
We at Supply Chain e-Business take full responsibility for this list, but as we did last year, we have developed it with help from more than 20 consultants, analysts and users who have wide expertise in what solutions are available, what is leading-edge and what is most useful.

We have created this list in stages. We mailed or emailed detailed questionnaires to nearly 200 vendors of leading supply-chain solutions followed regularly by our staff. In these questionnaires, we asked for specific information about sales, implementations, user profiles, as well as the solutions themselves and their specific features and benefits. We inserted this information on a grid we created for easier comparison, and shared it with our selection committee of consultants, industry experts and analysts who provided their evaluations. The final list was a compilation of their collective input.

The factors considered in evaluating vendors and their applications include the following:

1. Proven record of driving bottom line supply-chain performance

2. Marketplace success measured by the number of implementations, revenue earned, number of transactions, etc.

3. Usability, ease of implementation and simplicity of integration

4. Financial viability

5. Innovation and functionality

Factors considered
Our evaluation process is both objective and subjective. With nearly two years of data, we are able to look at total revenue, sales growth, number of implementations and other objective factors for most of the vendors on our list. A small sampling of this data appears on page 16. But such statistics as total sales revenue and number of implementations accounted for less than half of the criteria we considered. Our process attempts to look at the underlying value of the applications to users-not just the success the vendor sales force has achieved. For example, users tell us that the ease of integrating solutions with other systems within and beyond the enterprise is a critical factor. Similarly, these users tell us that a web-native architecture is important for fast implementation of solutions across supply chains. The consultants in our selection group who actually implement these solutions considered such factors.

Functional balance
Another factor that guided our development of the Top 100 list is balance. We wanted our list to represent vendors whose applications cover the broad range of supply-chain activities. We believe there are "six pillars" of supply chain technology. In addition to the standard four supply-chain activities of planning, sourcing, manufacturing and execution, we have added managing and selling solutions. Managing solutions include a broad list of visibility and event management tools that cross functional and enterprise boundaries. Selling solutions with a supply-chain focus include applications that use customer orders and other real demand data to drive the rest of the supply chain. The vendors in the Top 100 offer solutions in one or more of the following areas:

1. Planning, which includes such activities as
• Advanced planning and scheduling
• Constraint-based optimization
• Distribution planning
• Inventory planning
• Collaborative planning, forecasting and replenishment

2. Sourcing, which includes such activities as
• Indirect or MRO e-procurement
• Direct material sourcing
• Services procurement (including logistics)
• Contract management
• Spend management
• Supplier relationship management

3. Manufacturing which includes such collaborative production activities as
• Product lifecycle management
• Collaborative manufacturing management
• Collaborative product commerce

4. Management, which includes such inter-enterprise activities as
• Supply-chain event management
• Process management
• Supply-chain visibility
• Extended enterprise relationship management

5. Execution, which includes delivery-related tasks such as
• Warehouse management
• Fulfillment
• Transportation management
• Logistics collaboration
• Global trade management

6. Selling, which includes such sell-side activities as
• Order management
• Customer-relationship management
• Customer-facing portal solutions

Looking forward
A year ago, we predicted that our next Top 100 would look very different from the first list, and we were right. A turnover of 37 companies on our Top 100 is significant. With the turmoil continuing in our industry, no doubt there will be significant differences in next year's Top 100, but perhaps for different reasons. Consolidation will certainly continue, but we expect that there will be an upturn in the general economy that will allow corporations to think more strategically about their businesses and how supply chain technology can provide long-term competitive advantage.

"I am bullish on the supply-chain space," says John Leffler senior partner and global collaborative value chain leader of PwC Consulting, who predicts a major turnaround in investment in supply-chain applications within nine to 12 months.

"As IT budgets come back, supply- chain applications will be near the top of the list because of their unmatched ability to impact the bottom line and to provide competitive differentiation," says Leffler.
So which applications will participate in this much-anticipated resurgence?

It depends on how companies adapt to the new realities of e-business, according to John Leffler.

For example, collaboration has been the most over-used buzzword in the world of supply-chain applications. Every user and every vendor talk about it, but few companies are actually making collaboration a critical part of their technology infrastructure.

"A large number of companies are still very reluctant to share any information with their trading partners, so they are not really interested in applications that offer collaborative capabilities," says Leffler, who points to the slow adoption of e-procurement solutions in many industries.

"E-procurement is anything but collaborative for many companies," he says. "The focus is on getting the lowest price and leveraging the supplier in every way possible. Collaborative applications can only prosper when this mindset changes."

Leffler believes this change has happened in certain industries, like high tech, where outsourcing and rapid product lifecycles have forced companies to collaborate. Product designs, component specifications, production plans, demand forecasts, inventory levels and shipping information all have to be shared among suppliers, contract manufacturers and customers. Collaboration capabilities become just as important as the base functionality of the application.

PwC Consulting's Peggy Vaughan thinks that customer-facing applications will have their day in the supply chain marketplace, even though they have not yet made a major impact.
"The big win in supply chain is getting a solid handle on real demand and using that information to control all other processes," says Vaughan. "Real-time order management, collaborative forecasting, customer visibility all have to be made part of the total supply-chain process."

These industry experts may be right about these coming trends in supply chain technology, but it is the users who ultimately determine the winners by how they invest their precious IT dollars. That will be the subject of the 2003 Supply Chain e-Business Top 100.

For now, we present this year's Supply Chain e-Business Top 100. We hope it is useful to our readers as a tool to help identify viable applications from among the many hundreds of supply-chain solutions that are promoting themselves in the marketplace.

Click here to view the Top 100 list.

Plan: Supply-chain planning drives business value
Plan: Planning applications balance inventory supply and demand
Source: Sourcing technology must manage total cost
Manage: Exit supply chains; enter adaptive supply networks
Manufacture: Manufacturing needs a product lifecycle management strategy
Execute: Supply-chain execution expands its boundaries
Sell: Sell-side solutions and the customer-centric enterprise

Top 35 Supply Chain Vendors by 2001 Revenue
RankVendorTotal Revenue (Millions $Notes
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Oracle
Invensys
SAP
PeopleSoft
Siebel System
i2
PTC
J.D. Edwards
Ariba
Intentia
Aspen Technology
Manugistics
IFS
JDA
QAD
Retek
Epicor
Manhattan Associates
FreeMarkets
QRS
MatrixOne
SSA Global Tech
EDS PLM
Frontstep
Swisslog
Kewill
EXE Technologies
Descartes Systems
Agile
Lilly Software
Industri-Matematik International
Vastera
Red Prairie
Intershop
Vertex Interactive
10,860.0
9,939.0
6534.0
2,073.3
2048.4
985.6
898.0
874.0
408.3
386.6
310.6
310.1
304.6
207.0
204.0
179.5
171.0
155.6
147.6
142.6
142.1
140.0
125.0
118.3
100.0
97.4
95.6
79.5
77.8
71.0
63.0
63.0
62.0
61.2
59.1
B
C
B
B
B





B

B








B





A







Financial and implementation data drawn from company reports and third party sources including Hoovers, SEC/Edgar and Dun & Bradstreet. Financial data not available for all companies.
Notes:
A. 2002 revenue figures
B. Includes substantial non-supply chain application revenue
C. Includes revenue for Baan, Caps Logistics as well as other Invensys companies