Over the last year, we’ve been working closely with E2open to reinforce our Digital Supply Chain offering as a stack of collaborative platforms bundled with managed services. I’m extremely excited about the journey we’ve embarked on, which demonstrates our commitment to maintaining our position as a leader in the delivery of world-class supply chain services for our clients. E2open is a superb organization and truly at the forefront of innovative technologies that transform supply chain operations. In the following interview for our Innovation Nation magazine, Shawn Lane, SVP Sales and Marketing at E2open, offers a glimpse into E2open and some of the exciting things they’re working on.
Innovation Nation: Let’s start with a bit of background. Could you please tell us about how E2open fits into the supply chain space?
Shawn Lane: Yes, that’s good place to start. E2open is an end-to-end supply chain company. We provide software solutions around supply chain planning, execution, collaboration and connectivity. Our E2net is the largest direct materials network in the world, managing about $250 billion dollars worth of spend from some of the largest companies in the world.
In terms of where we fit into the supply chain market, if you go back to the old days, companies had two choices: they could go to an ERP provider and get a monolithic solution that integrated well but probably didn’t provide the level of business value they were looking for because it was broad but not very deep; or they could go to different niche providers and buy separate software packages from different software vendors, but had the responsibility of integrating them together—so they got the business value, but the expense, cost and effort to maintain a multitude of suppliers was problematic.
E2open sits in the middle—we give you an integrated solution, but from a company that is 100% focused on software-as-a-service (SaaS) supply chain, enabling you get the best value at the most reasonable cost.
Finally, we focus on not just better operations of a single company, but collaboration between companies. Today, competition isn’t company vs. company, it’s supply chain vs. supply chain. Seamless coordination between all the companies in a supply chain is an absolute necessity to be able to deliver reliably and consistently.
How did the partnership with Capgemini come about and what challenge does the joint offering address?
E2open has been around for 17 years and we’ve known Capgemini from the beginning. We saw them investing heavily in the supply chain area and providing creative solutions. In particular, their managed business services caught our eye because our clients were increasingly not only asking for software solutions to solve their problems, but they also wanted to outsource the work. They wanted someone who could plan and manage their supply chain using our software, either because they didn’t have the skills and capabilities, they didn’t consider it a core competency or they needed to drive productivity gains.
We saw Capgemini as a logical partner in that space because they had a lot of experience in doing this with other companies, so in this respect, the partnership is very synergistic. We also saw a level of depth around process understanding, redesign, change management and strategy. We felt Capgemini could go into large companies, recommend the transformation and follow it all the way through, giving us the opportunity to remain good at what we do—which is being a software provider and a network.
Which industry sectors are moving quickest in adopting this type of solution?
Consumer packaged goods (CPG) is the biggest one. Activist investors and the rise of Amazon.com are forcing companies to change the way they behave. Companies are terrified, and they know they need to perform better. They know that they need to have higher customer performance at lower cost and they’re struggling to figure out where to get those productivity improvements—which is where we come in. We enable you to take non-core areas of your business such as supply chain planning and demand forecasting, and let Capgemini provide the service using E2open tools to do it cheaper, better, faster, and with better outcomes. This allows companies to invest more in improving their products, services, stores, or other aspects of their core business.
The need for dramatic productivity improvements applies to almost every industry. In the pharmaceutical industry, for example, there’s a rush to become efficient, so they can price more effectively. In the US, the government is forcing providers to reduce costs, but they’re unable to reduce the amount they spend on research and development, making it a perfect fit in having Capgemini provide the business planning functions using E2open tools.
It also extends to high tech, where margins are shrinking and the success or failure of a company is largely dependent on the availability of the supply of chips and glass for screens and a number of other constrained materials. The right way to manage that is to outsource the planning and let the company focus on designing and marketing better products. It really applies to all industries but I’d say the CPG, pharmaceutical and high tech industries are the really hot ones right now because they have particular market pressures.
Can you share any client examples where the solution has been applied?
Yes. E2open is one of the best kept secrets behind hundreds of Fortune 500 companies. Procter & Gamble uses E2open to forecast its entire global business. Dell runs their procurement, manufacturing and distribution on E2open. Boeing manages the production of the 787 Dreamliner on E2open. Most of our clients have seen paybacks in a year or less, with inventory reductions that amount to hundreds of millions of dollars.
Could you talk about some of the new developments you’re currently working on at E2open?
A lot of the work we’re currently doing is in artificial intelligence (AI). We’ve been providing AI-based products for about 15 years, but they have largely focused on the demand side within specific industries. We’re now working to apply AI to the supply side, to make better decisions around the make, move and pack of materials and extending them across other industries.
We’re also working on making the experience more seamless. Historically, companies bought multiple niche software products for different processes such as forecasting, inventory planning, supply planning and procurement. Users would log in and out between applications and it required extensive IT investment to integrate the disparate products. The lines are now blurring and when your supply chain is run in the cloud, it won’t matter what product you’re in—what matters is that you have access to the information you need. So were trying to make the process seamless and cohesive across functional groups to allow better collaboration.
And finally, what advice do you have for supply chain leaders?
Act now! The worst decision you can make is to do nothing. It’s important for companies to act right now because the lifeblood of these companies is at stake. More and more companies are going bankrupt because they are failing to be efficient and productive in their markets. And there’s a lot of trepidation in the market right now—the private equity effect in CPG, the regulatory effect in pharmaceutical, and the market depression in high tech.
But if companies can step back, what they realize is that during times of change there are tremendous amounts of opportunities. Investing in change, new techniques and approaches is best done in times of transition. Coming out of these difficult markets, there will be winners and there will be losers—and Capgemini and E2open work with companies to enable them to be winners.