Mitrix, a subsidiary of Mitsui & Co. USA, today introduced SCM Live, which it calls a collaborative trading platform, with applications including planning, sourcing, inventory, fulfillment, and logistics. Mitrix's technology was initially designed for Mitsui's parent company, Japanese trading company Mitsui & Co. Ltd.
Mitsui operates hundreds of business units, from steel to food to financial banking. Each run autonomously with unique business processes. Twelve of these business units, each of which are similar in size to a midsize company, with annual revenue between $75 million and $750 million, use the platform to trade with companies such as Hewlett-Packard and DaimlerChrysler.
Mitrix president and CEO Ed Lewis says the work with Mitsui proves that its technology and on-demand business model will be a success. "The growth will come from companies that couldn't afford these supply-chain tools in the past," Lewis says. SCM Live managed more than $250 million in transactions in 2004, and closed the year with $1.4 million in subscription and services revenue from Mitsui.
The software takes data from material planning forecasts and compares it with data on existing supplies to make recommendations that keep inventory balanced with trading partners.
Sophisticated algorithms built into the software applications enable businesses, for example, to check the status of orders for each item, and then renegotiate terms if a product will be delivered late. "The system interprets the information and understands the implications to the supply chain as a result of the delayed shipment," says Lewis, who calls SCM Live a new generation in resource and planning software. "It's real time, so every time something happens it recalculates itself and makes new recommendations."
Improving supply-chain performance provides a competitive advantage for small and medium-sized businesses and enables them to compete with large enterprises that have the capital to invest in sophisticated systems. "On-demand supply-chain management is an untapped market," says Jason Corsello, a senior analyst at the Yankee Group. "There is a gap today in terms of companies that serve this market."
But market success isn't guaranteed. Mitrix is entering a market potentially more difficult than customer-relationship management, and it will compete against existing on-demand vendors One Network Enterprises Inc. and RiverOne Inc. "No two companies have the same supply chain," says Bruce Richardson, chief research officer for AMR Research. "It's not like a CRM application."
Licenses for SCM Live are sold in what Mitrix calls "communities." One community allows between five and 10 users to access the platform. The costs for the first year for one community costs less than $200,000 to install, Mitrix says. Consulting services are included. Excluded is integration with other applications, if required. The license fee for subsequent years is about $75,000 annually, Lewis says.
SCM Live is a Java-based application built on IBM 's WebSphere and Oracle's database. Twelve Compaq ProLiant servers housed in Sterling, Va., support the applications.