I’m just back from Manhattan Associates’ Momentum 2010 User Conference. The theme this year was “Platform Thinking.” Manhattan, an ARC client, has been on a four to five year journey to bring its applications onto a common supply chain platform. Its warehouse management system (WMS) application was just added to the platform this year. The only applications not fully on the platform today are demand planning and inventory optimization.

Manhattan Associates was hurt by the recession last year. This is not surprising based on the fact that a relatively high percentage of its customers are apparel and other upscale retailers that were themselves hit hard by the recession. However, the company posted good growth last quarter. In separate conversations with some of Manhattan’s top executives, all of them said that one key reason the company bounced back was its ability to demo the platform to customers and the value proposition is resonating with them. 

What is included in Manhattan’s platform? I’m not going to review all of Manhattan’s applications, but let’s just look at its core applications:

• Extremely functionally-rich warehouse and transportation management systems.
• Demand management and multi-echelon inventory optimization. These Manhattan solutions don’t get nearly as much publicity as its WMS and TMS solutions. It was nice to see two customers at the conference, both auto parts retailers, publically stand up and talk about how they were able to reduce inventory levels while maintaining or improving service levels. NAPA’s goal is to grow by over 50 percent in the next few years without carrying any extra inventory. Uni-Select has implemented the solution in Canada and has reduced inventory by 10 percent with no degradation in service levels.
• A distributed order management (DOM) system. This system takes customer orders and decides which warehouse is best suited to fulfill them based on inventory, inventory in transit, and delivery requirements. Recent functional enhancements have been added for multi-channel retailers. In order to have a robust supply chain platform, DOM is a critical application. 
• An interesting new “total cost to serve” analytics application that we’ll write more about down the road.

In most distribution-centric supply chains, the greatest savings will come from reducing system-wide inventory rather than from cost savings associated with more efficient transportation or more productive warehousing. Therefore, it is interesting that Manhattan, as well as other best-of-breed supply chain software vendors, have been more successful at selling WMS than TMS, and at selling TMS than replenishment solutions. However, it is clear that these applications work together and reinforce each other. Without good system-wide inventory visibility, which comes mainly from WMS, you can’t effectively optimize your inventory stocking levels and placement strategies. Once you do multi-echelon inventory optimization, you reduce the inventory you need to hold across your network. This means your warehouses have more storage capacity and potentially shorter travel paths. You also reduce the need to shuttle excess inventory from one warehouse to another, or to take back inventory from stores, which reduces transportation costs. 

A platform needs both applications and an intelligent technology stack. Here are some of the areas where Manhattan has made enhancements:

• Manhattan’s WMS remains a configurable solution, but recent architectural enhancements and tools should greatly increase its flexibility and the speed with which upgrades can be done. This is something that I addressed in “WMS Architecture and Total Cost of Ownership.” 
• Manhattan has added mobility capabilities to its platform. This solution is really part tech stack, part light application. Right now Manhattan is concentrating on two nodes: hubs/crossdocks and stores. For example, in a hub warehouse located at a port, a company might not need a full WMS with RF scanners, but rather just light functionality for receiving and shipping. It might not be able to justify an RF-based station and terminals, but would rather just have a few wireless terminals with scanners. In the stores, Manhattan’s handheld terminals could be used for scanning inventory into the store and for a light, store-specific form of cycle counting. Manhattan’s product manager told me they are already getting customer requests for a proof-of-delivery application.

To wrap it up, I particularly enjoyed this event. The customer case studies were very informative, it was great to network with the attendees, and the venue location was perfect (Westin Diplomat in Hollywood, FL). Also, this was only the second time in my fourteen years as an analyst that I’ve managed to talk my wife into accompanying me to a user conference. Now that the kids are older, I hope this happens more often.