Firms lukewarm over SCM tech but warming up - Oracle

Thursday, September 15, 2011

Companies in Latin America can be fairly resistant to new supply chain management (SCM) technology but that trend is starting to ebb away, according to Javier Desentis, Oracle's (Nasdaq: ORCL) Latin America supply chain sales director.

"Many of the companies in Latin America have a history of preferring to wait for others to implement the technology, to see if it works, and then make a decision to follow those pioneers," the executive told BNamericas. "I think in the region the number one challenge is for management to recognize SCM solutions as a competitive advantage."

"Demand for these systems has been growing strong, but there's still some resistance to it. Many companies are still dedicated to internal systems like back office or ERP," Desentis added. However, SCM "is where value is generated.... Time to market at the lowest possible cost is often where companies win."

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The executive pointed to as SCM drivers in Latin America areas such as cloud computing, inter-operability and collaboration throughout the extended chain, and medium and large companies growing both organically and via acquisitions, and needing to meet the technological challenges in bringing operations in-house.

And SCM can be applied to areas other than the production industry, he noted. "In their service offer, many companies in other sectors need some of the processes in supply chain. For example, a telecommunications company needs to plan resources and services. The logistics of how to light up a new cable line, making the installations, or maintenance of the infrastructure. Telecoms firms are asset-intensive, with a very high value in assets," Desentis said. "And service and billing are also very important. Maintaining the infrastructure is core for that business."

Another example is in banking. "Every bill is like a product - an asset that has value, can be inventoried and the value isn't expressed until it is used. It has to be maintained and distributed - just like an SKU - with demand peaks. So the distribution needs to be planned for the most efficient way to satisfy demand."

Oracle recently launched a series of events looking to strengthen its Oracle PartnerNetwork (OPN) and boost specializations in Latin America. Specialization can be done by category of products and offers three levels - Gold, Platinum and Diamond. In addition, an incentive program will be offered for specialized partners.

Oracle's Americas revenues surged 12.3% year-on-year in fiscal 4Q11, ended May 31, hitting US$5.49bn. Yearlong revenues for the region totaled US$18.4bn, a 32% increase from US$13.8bn in fiscal 2010.