Key Supply Chain Planning Functionality Bolsters Manufacturing Cloud Offering

On August 9, 2016, Manufacturing Cloud pioneer Plex, announced the acquisition of DemandCaster, a cloud based sales forecasting and inventory planning software provider based outside of Chicago, Illinois.  Founder Ara Surenian built DemandCaster from his operational consulting experiences in demand planning, supply planning, and sales and operations planing software.  This first acquisition by Plex in the company's history will:

• Add critical supply chain planning and distribution requirements planning functionality.  DemandCaster provides Plex customers with formal sales and operations planning (S&OP) structure, capacity planning and scheduling, automated safety stock and order point options, and dashboards and reporting (see Figure 1).  The S&OP capabilities include collaborative data gathering, demand planning, supply planning, reconciliation of plans, and finalization and release of plans.  Capacity planning and scheduling allows planners to explode forecasts and customer orders using the bill of materials (BOM) including independent forecasts through dependent components, daily MPS, stock out root cause analysis, rough cut capacity planning, and ability to drill to specific work enters to view work order schedules.  Safety stock and order point options allow location specific forecasts to control inventory across multiple sites, calculate safety stock values without hierarchical duplication, ensure matching of supply to demand, and compare actual and peak demand against order points.  Dashboards and flexible reporting allow for user specific custom reports, templates, basic excel reports, pivot tables, and hierarchical grids.
  
  Point of View (POV): Despite the small size of the company, DemandCaster packed a punch of functionality.  Customers often cited ease of use of the product, rich features, and easy reporting as the benefits.  Most customers chose DemandCaster for four key use cases including supply lead time reduction, inventory reduction, stock-out reduction, and overall operational productivity improvements.  The biggest complaint about DemandCaster was the lack of available resources and the company's small size.  Acquistion by Plex will help DemandCaster scale out customer service, professional services, and sales.

Figure 1.  Plex Rounds Out The Manufacturing Cloud

Source: Plex

• Improve overall and supply chain analytics and IOT for Plex customers. While Plex has had a robust ERP and MES capabilities, the supply chain planning gaps were filled by the OEM relationship with DemandCaster from a year ago.  With a full acquisition, Plex can provide customers with full visibility and related analytics for planning, control, and execution.  Customers can communicate supply disruptions and respond quickly enough to reshape demand or redploy inventory. Moreover, the acquisition adds to the IntelliPlex analytics offering.
  
  (POV): Customers in the cloud will expect the next set of exponential improvements to come from anlaytics.  Today's IntelliPlex offering provides advanced reporting, customized templates, and the beginnings of basic analytics.  The need for more advanced analytics has been the key driver for organizations to add technologies such as Steel Wedge and Kinaxis to their supply chain solution.  More than visibility and control, customers will expect their data sets to drive future capabilities in artificial intelligence and machine learning.  The result - the dramatic ability to improve operational performance with augmented decisions.  With all the data in the manufacturing cloud, customers can expect these improvements in the future roadmap.

• Take out a key Netsuite partner.  DemandCaster built a strong business with Netsuite customers.  As part of the SuiteApp.com ecosystem, many customers turned to DemandCaster for the same reasons Plex acquired them. DemandCaster brings over 40 customers with 10 joint customers on Plex.
  
  (POV): While the partnership will most likely continue, expect most of the resources to focus on cross-sell to Plex customers.   DemandCaster shares many common components in the Microsoft cloud stack with Plex which improves integration.  Expect future functionality to expand integration within the Plex stack and apps.

The Bottom Line For Customers

The first acquisition by Plex provides a win-win for customers who seek consolidation of capabilities in the cloud.  Here's Constellation's take:

• Customers gain massive benefits.  Customers win with end to end manufacturing execution, ERP, and supply chain capabilities from one cloud vendor.  The OEM partnership paved the way for a smooth transition for customers.
• Prospects can keep Plex in the short lists for Manufacturing Cloud.  While large vendors such as Oracle and SAP try to move down market, prospects continue to complain about the high cost of ownership and complexity despite a cloud delivery.  Smaller competitors Rootstock and Kenandy still lack the full functionality of Plex.  Netsuite's acquisition by Oracle may cause some distractions during post-merger integration.  The result - limited players in the space.  JD Edwards on-premises and Microsoft Dynamics remains a worthy competitor though both lack the rich supply chain planning capabilities out of the box.

Your POV.

Are you a Plex customer seeking supply chain planning? Have you used DemandCaster? What are your thoughts about the acquisition?
Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

Resources

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