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Developments in on-demand offerings continue to move very rapidly, however, as on-demand starts to become the dominant model for supply chain software over the next few years.
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The following article was excerpted from our recent Supply Chain Digest Letter on On-Demand Software, a 16-page report focused on just this topic. To download am electronic version of the Letter, and to access a wide variety of other articles and information on On-Demand Supply Chain software, please visit our resource center: On-Demand Supply Chain Software Resource Center
The pace at which the on-demand model has taken hold in different supply chain software areas varies, for a number of reasons. Below, we take a look at the state of on-demand in different sectors of the software industry.
ERP: This is clearly a work in progress, in part due to the sheer scale of a full ERP system from one of the top providers and the effort to fully transition that software – and business model. Oracle and SAP are clearly hard at work in the effort to do so, but the transition will take years. SAP is doing some interesting on-demand work in applications outside of its traditional functionality, such as web-based collaboration.
The on-demand model could be a threat to existing players in any application area, and “big ERP” is one of them. Some on-demand ERP start ups have emerged, such as Peoplesoft founder Dave Duffield’s Workay offering, which began as an on-demand solution.
Global Trade Management and Supply Chain Visibility: Probably the furthest along of any supply chain software category, with several players having been on-demand from the start. Global visibility naturally lends itself to an on-demand model, and the trade compliance aspects benefit from the providers being able to more easily manage the many content changes that occur to the regulations and quickly get them into their solutions in one place, rather than at each customer.
Transportation Management Systems (TMS): The TMS area is also very far along, with several companies having started on-demand from the beginning, though usually with lower levels of functionality than the traditional leaders. Those traditional market leaders now all offer on-demand TMS in addition to traditional deployments – but the products may not be the same.
TMS lends itself to on-demand deployment for several reasons, such as the “network effect” of potential collaboration between shippers, and the distributed nature of the places where managers may need to access the system (plants, distribution centers, carriers, etc.).
Warehouse Management Systems (WMS): Although there have been several recent on-demand market entrants in the past few years, actual deployments of on-demand WMS outside of smaller DCs have been relatively few – though it makes great sense for those smaller facilities or inventory storage locations.
The challenge with on-demand WMS is that it isn’t “clean” in larger operations – you still need radio frequency and/or voice terminals, perhaps materials handing automation, RFID readers, etc. that must all work with the WMS – meaning you still must have local “systems” regardless of what you do for the WMS. The need for sub-second response times also plays a role. On-demand WMS is coming, but slowly in terms of actual adoption - though recently there has been much activity be WMS vendors. (See Is It Finally Time for WMS in rhe Cloud?)
The related category of Labor Management Systems makes a lot of sense for on-demand, however, and is also seeing a series of new offerings. (See
As Labor Management Software Starts to Move On-Demand, Already Strong Value Proposition Can Become Even Stronger.)
(Supply Chain Trends and Issues Article - Continued Below)
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