Since the onset of the pandemic, enterprises of all sizes have been tackling supply chain challenges and the situation is not likely to get any better without making fundamental changes to one’s business processes and models.
Oracle is beefing up its Fusion Cloud Procurement offerings to overcome those challenges, while extending its entire application platform to address the broader requirement of running a sustainable supply chain.
As part of the latest Oracle 21c Fusion Applications update, the new features include conducting complex procurement for both goods and services to mitigate supplier risks, drilling down into procurement and supplier performance analytics and classifying spending patterns, assessing supplier health and verifying supplier data for speedy onboarding, as well as practicing project-driven supply chain in asset-intensive industries with disparate design, engineering, production and assembly operations.
Oracle is no stranger to scaling out its procurement offerings. For years, thousands of its Oracle E-Business Suite, PeopleSoft and JD Edwards customers have been deploying procurement applications that cover the full spectrum of supplier relationship management for sourcing, direct materials purchasing and monitoring contract lifecycle from start to finish.
Today, Oracle Fusion Cloud Procurement is positioned as the nexus between its financial management and supply chain applications, allowing for optimized visibility into how one spends on its goods and services to capture maximum savings, while bullet-proofing its supply chain with sustainability in mind, a prerequisite especially for those with significant carbon footprint around the world.
At its recent webcast, Rick Jewell, Senior Vice President of Oracle, said the pandemic has laid bare the need to reexamine the efficacy of one’s supply chain systems as well as its manufacturing method. The producer that can fetch a premium with its widgets that appeal to the masses these days must pay close attention to running an integrated software platform that makes easy configurability, predictive maintenance, use of IoT and robotics possible, Jewell added.
The global marketplace now dictates not just how one makes and distributes its goods and services quickly, but also the imperative to harness critical data and insights that power the entire manufacturing ecosystem covering everything from tracking and tracing the origins of its raw materials to sourcing and managing suppliers.
Tom Anthony, vice president of product strategy at Oracle, said a typical use case for a new generation of purchasing executives is the integration of DataFox, a rich database of seven million company records, into Oracle Fusion Procurement, allowing for real-time lookup of data on supplier health with incoming alerts on any noteworthy legal, regulatory and environmental issues for risk mitigation.
Jon Chorley, Chief Sustainability Officer of Oracle, added demand is on the rise for a holistic approach and achieving manufacturing, procurement and supply chain efficiency while meeting sustainability objectives at the same time is no longer considered mutually exclusive. That helps explain the growing appeal of Oracle’s Fusion Cloud SCM applications, now reaching over 3,200 customers, compared with about 1,000 in 2018.
For example, Tetra Pak, the $13-billion packaging goods company, has recently implemented Oracle Cloud SCM in a multi-phase project designed to achieve advanced logistics support and optimized transportation management visibility.
“We can afford to reduce the number of transports and if we need to have transport, (the key is) how we can do them the smartest way,” said Ewonne Lennartsson, global integrated logistics director of Tetra Pak, adding that the use of Oracle Cloud SCM greatly improves the different moving parts of its logistics operations, which in turns helps meet its sustainability target.
Upgrading logistics is only part of Tetra Pak’s stated goal of becoming carbon neutral by 2030. The Swedish company has also mandated the use of renewable energy in many regions where it operates, maximized the use of recycled water for many of its manufacturing processes, while stepping up traceability to account for sustainable aluminum and origins of other raw materials from its suppliers.
Tetra Pak’s decision to overhaul its SCM systems serves as the catalyst for many applications vendors to rethink their strategies as well. In 2021 alone, multiple acquisitions have been announced pairing industry heavyweights all with the shared goals of delivering next-generation SCM systems that drive efficiency, reduce waste and save energy.
Blue Yonder, the result of the 2012 marriage between JDA and RedPrairie, was acquired by Panasonic for $7.1 billion in April 2021 as the Japanese hardware maker aims to expand in the software market. CEO Yuki Kusumi of Panasonic calls the Blue Yonder purchase a stepping stone for the combined company to realize a world where waste is autonomously eliminated from all supply chain operations and the cycle of sustainable improvement continues.
That was followed by the July 2021 announcement by the $4-billion manufacturing software vendor Hexagon to pay $2.75 billion for the Enterprise Asset Management applications division from Infor, a major ERP vendor with many SCM offerings including the GT Nexus emarketplace for global trade management. Koch Industries, parent of Infor, will own 4.9% of Hexagon after the purchase.
Hexagon CEO Ola Rollén added that the Infor EAM addition to its manufacturing systems and its expanded relationship with Koch – a $100-billion manufacturing conglomerate – will be a key enabler for predictive maintenance and reduced energy usage among the building blocks of its sustainability strategy.
Meanwhile, E2Open, another widely-used emarketplace next to GT Nexus and GXS(now part of OpenText) built around different supply chain management apps for sourcing and logistics, has gone public in early 2021 after it was picked up by CCNB1, a blank check company, last October.
In the eCommerce order fulfillment space, Stamps.com, which competes heavily against Pitney Bowes, Fulfillment By Amazon, Quadient, and others, is in the midst of being acquired by Thoma Bravo for $6 billion in July 2021.
All these deals point to the fact the Supply Chain Management software space is in a state of flux with major vendors and startups jockeying for the best position as the incumbent, consolidator or disrupter as many verticals still grapple with long lead time, quality degradation and supply constraints, compounding already elevated inflationary measures in many parts of the world.
That presents both opportunities and risks for customers that are in the process evaluating SCM solutions to accommodate their present and future needs. What works to the advantage of incumbents like Oracle with a robust Cloud infrastructure that supports and enhances an array of seamlessly integrated applications for financial management, procurement and supply chain management is the completeness of its vision, something that its customers consider one of the key reasons behind their investment in the full stack.
Their full throttle support was on full display during Covid when customers like Hormel Foods kickstarted a wall to wall replacement of its legacy systems with Oracle Fusion Cloud applications for financials, HR, payroll, procurement, and supply chain. In its May 2021 earnings call, Hormel executives said having a unified supply chain system has helped the $10-billion food giant, which sells everything from SPAM to Skippy peanut butter, navigate the pandemic especially in making it easier to manage soaring freight costs. “I can’t imagine us having gone through the pandemic with a fragmented supply chain,’’ said James Snee, CEO of Hormel during the call.
List of Oracle Fusion Procurement and SCM Apps Customers
Source: Apps Run The World, August 2021