Logistics.com, a provider of transportation procurement and management technology, announced a strategic partnership with SCT (NASDAQ: SCTC), whose one division provides business applications to process manufacturing and distribution enterprises. The partnership purports to combine SCT's strengths in process industry manufacturing related enterprise applications with Logistics.com's comprehensive transportation system to broaden SCT's "end-to-end" business solution for process manufacturers and distributors in the food, beverage, chemical, CPG, pharmaceutical, biotechnology and related process industries.
The partnership combines SCT's iProcess.sct collaborative planning, network optimization, supply chain planning and execution (SCP&E) capabilities with Logistics.com's OptiManage transportation management and execution solution. The companies believe the integrated offering will enable significant manufacturing and logistics cost reductions and improved customer service for process manufacturers and distributors. Logistics.com's OptiManage will be used in the integrated solution to handle load consolidation, optimal carrier selection, routing optimization, tendering and real-time tracking and tracing of road-based shipments in North America. SCT's iProcess.sct solution will provide all other required supply chain planning, execution and Relationship Network Management.
As the announcement happened not that long after a very similar alliance (and with almost identical PR rhetoric) with another prominent transportation procurement provider, G-Log (see SCT and G-Log Form Alliance For Collaborative Logistics in the Process Industries), many have wondered whether the partnerships with both vendors with an expertise in logistics were indeed necessary.
Market Impact
At first sight, this is a win-win situation for two companies that have been ebullient lately in their respective complementary strongholds (see SCT Corporation Means (e)Business For Process Manufacturing and Logistics.com Might Prove An Internet Success Story After All). The growth of industry specific, vertical solutions continues with concurrent internal development, acquisitions and partnerships, and the notion of an "end-to-end" solution continues to evolve. When it comes to transportation procurement and execution, most ERP vendors, even those with strong native transportation planning capabilities (e.g., J.D. Edwards), have had to turn to the partnership option.
With this partnership, the process industries should have a broadened definition of what is achievable, as any software vendor that strives to offer its clients an end-to-end supply chain management (SCM) solution should also provide logistics capabilities, especially considering the payback potential of these solutions. The partnership in case should enhance the value proposition of SCT's product suite, while providing Logistics.com with an opportunity to gain additional traction in the process industries.
Within the process manufacturing and distribution segment, the alliance seems to be a good fit, as both companies have sound customer lists, particularly within the food and retail segments. For example, Logistics .com touts names like Kraft, Colgate, Georgia Pacific, PPG and Schreiber Cheese, while SCT has Cargill, SmithKline Beecham, Godiva Chocolate, Akzo Nobel Organon, and Smithfields.
SCT continues to execute well in the operational level-centric applications, unlike most of the other process ERP wannabes who are still selling generic 'white collar' applications (e.g., HR, financial accounting, procurement) into the process industries.
Logistics.com, on the other hand, needs to tie its execution modules into the plant-level applications in order to give a customer a full solution. In process industries, the control of material extends further into the supply chain (owing for example to recalls, product shelf life and/or aging repercussions, etc.). Therefore, tying these two products together should be beneficial, as Logistics.com cannot provide the execution without a backbone system that does its part of the business, while SCT cannot deliver the full job without the transportation part.
As for the SCT's G-Log and Logistics.com alliances conflict, it is less than meets the eye. While G-Log and Logistics.com can be seen as competitors in a very broad sense, they specialize in different things. G-Log mastery is in global and multi-modal transportation (truck, rail, air, and ocean - and any combination of these), while Logistics.com excels at North America-only and truck-only transportation. Logistics.com also has a strong offering in the transportation e-procurement side (with its OptiBid product), while G-Log does not really target that market. Furthermore, the partnerships also seem to be complementary marketwise, considering G-Log's experience in the chemicals industry, with customers like Dupont and ShipChem, whereas Logistics.com has stronger penetration in the food market segment.
User Recommendations
Key to process manufacturing and distribution companies is that this partnership addresses major bases of operational efficiency, cost, and customer service. The combination allows these companies to address the extended supply chain with the added bonus of process industry specific solutions. Process industry companies should consider the combined SCT - Logistics.com solution if they are looking for a supply chain planning solution that includes a transportation planning component. Also, installed base clients of either Logistics.com or SCT should consider the possible cross selling of products of the other company, bearing in mind the availability of standard interfaces between the products. The key tenets of success are the tight integration and a single point of contact, which points to having an immaculate channel with expertise in both product lines.
Existing SCT iProcess.sct customers should evaluate the Logistics.com applications as a way to both add value to their existing iProcess.sct applications and resolve their logistics requirements. Existing process industry Logistics.com customers looking for added functionality of the related areas of SCM, e-business, CRM or ERP should evaluate SCT regardless of their incumbent vendor relationships. Process companies considering new solutions in the supply chain, e-business, or ERP areas should place SCT on their short list. These companies should consider the added functionality from this partnership for an addition to their requirements list.
source:http://www.technologyevaluation.com/research/articles/is-sct-and-logistics-com-partnership-a-d-j-vu-16534/
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