©2009 AMR Research, Inc.
Industry Value Chain Strategies | September 2009
Industry value chaIn strategIes
Does Supply Chain Planning Need an
by Lora Cecere
Gone are the years when the market was fueled by
exuberance and supply chain planning innovation.
Courtesy of market consolidation, APS visionaries like
Manugistics, Numetrix, ProMIRA, and Red Pepper
have largely disappeared, and best-of-breed survivors
like AspenTech, i2, JDA, Kinaxis, and Logility have
been tossed around in the turbulent sea that is the soft-
ware application market, which has lost its best-practice
moorings. Companies that initially bought the software
weren’t ready organizationally to take advantage of it.
Because of overzealous and irresponsible selling, the
market stunted before it could mature.
Wanted: Redefined APS apps
Consumer products (CP) companies need a redefined
APS application, driven by the need for global supply
chain data and the proliferation of clean downstream
data. With these changes, the old definition doesn’t fit.
Companies know they need something new, but they
aren’t sure where to turn. Where can it come from?
Venture capital funds have dried up, and only early
adopters are self-funding innovation.
Consider these challenges for the APS market:
Application technology vendors focused on
market share versus new innovation. As competi-
tion intensified, technology providers focused on
beating each other instead of driving breakthrough
innovation. The goal became market share versus
developing industry-specific functionality.
Consolidated vendors focused on a broad-brush
approach. The industry-specific functionality was
fused into a common platform, resulting in a loss
of CP-specific functionality.
Maintenance dollars were spent elsewhere.
Although companies with advanced planning sys-
tems pay 18% to 22% of the initial software costs
for maintenance, the lack of governance on how
this money would fund net-new functionality for
the industry has resulted in software