The Kinaxis RapidResponse supply chain planning platform will add multiparty collaboration and order execution capabilities with Kinaxis' acquisition of MPO.
Kinaxis recently bought the small Rotterdam-based MPO for $45 million.
Analysts are bullish on the move, as it provides Kinaxis RapidResponse with expanded functionality and positions the company to compete more strongly in the enterprise supply chain software market.
Kinaxis acquired MPO to add order execution capabilities to the RapidResponse supply chain planning platform, according to Kris Reid, vice president of strategic operations at Kinaxis, based in Ottawa. Kinaxis RapidResponse allows customers to plan for various supply chain scenarios, Reid said, but it has limited ability to help them deal with short-term disruptions, which are occurring frequently now.
"Kinaxis operates in the supply chain planning space, which is typically measured anywhere from days to weeks to as far as years for some of our life sciences customers," he said. "But we realized that a lot of disruptions are about very short-term execution-oriented things, like moving goods from point A to point B. Having a great plan is a good starting point, but you also have to be able to respond from an execution perspective."
MPO operates a SaaS network for what it calls multiparty orchestration. Essentially, it connects various entities in a supply chain -- such as manufacturers, logistics providers and end customers like retailers -- to act together in real time to execute orders.
Combining MPO with Kinaxis RapidResponse provides a complete real-time picture of a company's orders from the planning stages through to delivery, according to Reid.
"This allows manufacturers and suppliers to align together on a single version of what's needed in the supply chain," he said. "[MPO has] experience with connecting to systems that Kinaxis typically didn't have experience with, like e-commerce systems and [warehouse management systems] that tie into the execution of orders."
MPO will continue to operate independently, but Kinaxis has already started to work on integrating MPO into Kinaxis applications, Reid said.
"We're going to start to integrate a lot of back-office capabilities, but they are going to operate as a separate entity," he said. "Each organization continues to focus on the business that they have at hand, which allows both to buy time to properly plan out how they are going to work together in the future."
Keeping up in the digital supply chain arms race
The move by Kinaxis was not surprising, given that there is currently an "arms race" among vendors in the supply chain management (SCM) software market, said Predrag Jakovljevic, analyst at Technology Evaluation Centers.
For example, SCM vendor Körber recently acquired the EnVista Enspire Commerce platform, along with its freight and audit payment service and order management system. Supply chain planning vendor ToolsGroup acquired Onera, a provider of real-time inventory availability and fulfillment software.
Supply chain management and planning vendors need to add these capabilities to help customers deal with rapidly evolving customer requirements, according to Jakovljevic.
Predrag JakovljevicAnalyst, Technology Evaluation Centers
"Today, manufacturing companies compete with their entire ecosystems and networks," he said. "Kinaxis was always strong with their very fast [RapidResponse planning system], but that is no longer enough, as their customers demand the order visibility and ETAs throughout the entire network."
Kinaxis is "no longer a one-trick pony," Jakovljevic said, as adding MPO to its portfolio allows it to expand into retail from its traditional manufacturing customer base. It also enables Kinaxis to be more competitive with SCM vendors like Blue Yonder, Logility, E2open and ToolsGroup, as well as ERP vendors that have strong supply chain functionality, such as Infor, SAP and Oracle.
Timely decision-making is key
The deal makes sense because it enables Kinaxis' customers to integrate concurrency and collaboration into extended B2B business and supply chain planning, as well as supply chain execution processes, according to Bob Ferrari, managing director of the Ferrari Consulting and Research Group.
"It is about being able to integrate physical, digital and order fulfillment planning and execution information needs to foster more informed context aware and timely decision-making," Ferrari wrote in the blog Supply Chain Matters, of which Kinaxis is a client and a sponsor.
The most important aspect of these capabilities is in solving challenges and last-mile fulfillment needs beyond visibility, according to Ferrari.
"It is providing needed context such as customer orders that can be impacted, the implications of a material or shipment delay, the planning of daily operational workforce and equipment needs in a facility capacity context, along with identifying alternative actions and their cost implications to business metrics," he said in the blog.
The challenge for both companies lies in aligning the joint vision, integration timing and time-to-market availability, according to Ferrari. He added that it appears both companies share a similar culture of being able to be innovators, however.
Jim O'Donnell is a TechTarget senior news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.