The on-demand model for supply chain execution systems is new enough that even the vendors marketing it are still learning fresh angles. On-demand, also known as “software as a service” (SaaS) is where the application is hosted on the vendor's server and the user pays for using it—like Cable TV, on a subscription model, rather than having an on-premise license. It's also part of the cloud computing phenomenon. Tom Kozenski, vice president of product strategy for RedPrairie, told me that this model's new pricing structure has opened this kind of software up to new sets of clients—the large tier- one companies that had relied on their own WMS before, as well as their smaller trading partners that might not have had a WMS at all. Kozenski says he's learning as much about the extended supply chains of his customers as his customers' supply chain partners are learning about this new technology.
“When we announced our presence in on-demand last year, we were approached by our existing customers and they started to describe parts of their supply chain we never knew existed,” he said. “They said â€˜I never told you about that because a full blown WMS was not going to be our answer. Now that you have this on demand model I can talk to you about my extended network in Mexico or my 3PL community that helps me provide value added services within the U.S. I want to introduce you to those guys so they can start using the on-demand model to better support what I need to do at their main facilities.'"
This on-demand model is all about scalability—being able to expand one's vision of supply chain flow as one's supply chain grows through mergers and acquisitions. Kozenski will be talking about this during a presentation at ProMat on Tuesday, March 22nd, where he'll join John Hill, vice president of TranSystems, to talk about “Warehouse in the Cloud: Is an SaaS-based WMS Right for You?” This will be a good session for anyone involved in the consumer packaged goods or food and beverage chains where companies are always dealing with the challenges of SKU proliferation. Scalability is key to making sure the system you build today won't be obsolete or outgrown in five years. Kozenski explains why:
“When you put in a mixing center for a food and beverage manufacturer and their SKUs continue to grow through acquisition or through promotional packaging, they don't have enough floor space to handle all the SKUs they need to ship,” he told me. “So they change their behavior around pickface slotting to do more dynamic slotting based on where the trucks that I'm going to load will be for the next four hours. Those are the items I want in my pickfaces, and then every four hours I'll do a reprofiling of the pickfaces to match what goes on the next set of trucks.”
I'll be at ProMat all week, talking about and seeing technology and best practices like this. I'll be sure to report back to you what I'm learning at my booth visits. My schedule is packed with them, so I hope I can be as efficient at finding and keeping my next appointments as this technology is at finding and slotting your next shipments.