According to a recent study by ARC, ?Supply Chain Execution Worldwide Outlook: Market Forecast and Analysis through 2010?, only one ERP company is in the top ten list of the largest SCE suppliers for production applications. Why?

Supply Chain Execution (SCE) systems are real-time systems that manage supply chain operations. SCE solutions are composed of Warehouse Management Systems (WMS), Transportation Management Systems (TMS), Collaborative Production Management (CPM) applications, and other real-time supply chain applications. This is a very large and very fragmented market composed of both Best of Breed suppliers and Enterprise Resource Planning (ERP) suppliers. Leading ERP suppliers tend to have a fuller suite of SCE applications; Best of Breed SCE suppliers tend to offer either logistics or production SCE applications but not both. Despite that, Best of Breed companies dominate the list of the largest SCE suppliers.

Supply Chain Execution BusinessExecutives who are evaluating investments in new SCE systems are often confronted with two options: expand the use of existing Enterprise Resource Planning (ERP) solutions; or, procure a best-of-breed SCE system. ERP systems already manage some operational information, so why can?t they be used to actually manage execution? Why should additional investment be made in SCE systems?

The Role of ERP on the Plant Floor
If you want to understand the capabilities of ERP systems, look to their history. ERP was invented and embraced in the early 1990s to bring multiple applications together as a bundled suite. Over the past several years, ERP suppliers have expanded their suites to include supply chain management (SCM), Customer Relationship Management (CRM), Product Lifecycle Management (PLM), Data Warehousing, and Analytics. They have also enhanced their capabilities in manufacturing to include finite capacity planning and scheduling and to manage more shop floor data, such as product quality.

The top 10

ABB, best of breed, proces industry
Aspen Tech, best of breed, proces industry
Honeywell, best of breed, proces industry
OSIsoft, best of breed, proces industry

Invensys, best of breed, mainly proces industry some discrete too

Manhattan, best of breed, logistics all sectors
RedPrairie, best of breed, logistics all sectors

Rockwell, best of breed, production and logistics all sectors
SAP, ERP, production and logistics all sectors
Siemens, best of breed, production and logistics all sectors

According to Greg Gorbach, Vice President for Collaborative Manufacturing and Architecture at ARC, ?While solution capability has evolved, existing ERP solutions may still reflect certain aspects of their financial heritage, according to how they were implemented and the focus of the implementation. A system intended primarily for management of financial and ?business? transactions may still utilize batch processing of transactions across many applications. While this may be appropriate for proper tracking and auditing of information and operations, it can place severe restrictions on the system?s ability to support the real-time needs of shop floor operators and managers.?

Granularity and connectivity of information in existing ERP systems is likewise influenced by heritage and implementation objectives. Detailed transactions are basic to accounting and are carefully managed by every ERP system. But rarely do such records include information about individual production units or equipment conditions. Batch and shift summaries are generally granular enough for systems whose focus is to collect costs, allocate overheads, and support only general traceability requirements. But, plant floor managers require the ability to inquire about specific production units and relate units to equipment conditions at the time of production. These detailed unit history records are often absent from ERP style SCE applications for production.

ERP Vendors Make Greater Inroads in SCE Logistics
In contrast, on the logistics side of SCE, three ERP suppliers are among the top 10. According to Steve Banker, Service Director for Supply Chain Management at ARC, ?Except in the case of SAP, acquisitions of Best of Breed SCE suppliers by ERP suppliers is part of the reason that ERP suppliers have a higher market share on the logistics side than the production side. SSA Global?s acquisition of EXE and Provia and Oracle?s acquisition of G-Log are particularly noteworthy.?

Source: ARC

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