Software provider E2open is trying to bridge a gap between planning and execution in managing supply chains for retailers with its acquisition of Terra Technology..
The purchase, announced on Friday, brings Austin, Texas-based E2open a technology business focused on forecasting consumer demand, which has become increasingly important as e-commerce has triggered rapid changes in buying patterns and made it harder for retailers to get inventory to the right place.
Terra Technology has clients including Procter & Gamble Co., Unilever PLC and ConAgra Foods Inc. that use its analysis based on a range of information that includes point-of-sale data to predict shifts in demand. E2open provides cloud-based software that helps companies manage back-end operations, including sourcing supplies and managing inventory.
The purchase follows the acquisition by Infor Inc., an inventory management software company, of GT Nexus, which provides technology for retailers to manage their global and logistics trade processes.
Supply chain experts say technology providers are trying to link operations, including buying goods from manufacturers, more closely with rapid changes in demand arising from e-commerce. Retailers including Target Corp. and Nordstrom Inc. are redesigning their supply chains to get goods in the right place after reporting mismatches between inventory and demand in the last year.
“Everything is more volatile now thanks to e-commerce,” said James Cooke, a software analyst at Nucleus Research. “Marrying the front end, which is Terra, and the back end that E2open manages can give you the ability to make course corrections and manage your supply chain in a much more flexible way.”
Mr. Cooke said the combination can provide the technology support for a “supply chain control tower,” a central operation to manage purchasing and the movement of goods across a global network of suppliers with rapidly changing information, much as an airport control tower manages flights.
Combinations such as E2open with Terra or Infor with GT Nexus compete with bigger enterprise software providers such as SAP AG and JDA Software Inc. Those companies provide strong internal management systems and they also have struck deals in recent years aimed at providing companies more ability to manage the buying and movement of goods outside their own operations.
Writer paul.page@wsj.com
Source: Wall Street Journal
http://www.wsj.com/articles/e-commerce-pushes-supply-chain-technology-consolidation-1457382074
http://www.wsj.com/articles/e-commerce-pushes-supply-chain-technology-consolidation-1457382074
