In a move to consolidate the market for supply chain design software, LLamasoft Inc. said today it has acquired the LogicTools supply chain applications suite from IBM Corp. Terms were not disclosed.
Ann Arbor, Mich.-based Llamasoft said it will buy IBM's LogicNet Plus, the Inventory and Product Flow Analyst, and IBM's Transportation Analyst products. Llamasoft has been growing fast in recent years due to increased interest in the company's specialties of supply chain modeling, analytics and optimization. Under the transaction, Llamasoft will absorb the IBM supply chain technology and support team.
"We're incredibly excited to have the opportunity to serve LogicTools customers and welcome them into the LLamasoft user community, the largest community of supply chain designers in the world," said Llamasoft CEO Donald Hicks. "Supply chain modeling is a must-have capability to survive and thrive in rapidly changing global market conditions."
Llamasoft and the IBM supply chain units operate in overlapping markets, meaning there will be one less option for users and greater pressure on other providers to compete with a much larger rival. "There's one less choice now. This will put a lot of pressure on the other vendors to really step up," said James Cooke, a principal analyst at the research firm Nucleus Research, Inc.
Llamasoft delivers cloud-based software solutions that enable users to run software programs from the Internet rather than software downloaded on a physical computer or server in their building. Llamasoft offers applications with simple functionality and an easy interface for loading data into a supply chain model from any transportation management system (TMS), warehouse management system (WMS), or enterprise resource planning (ERP) solution, Cooke said.
The acquisition comes at a time when companies are putting more emphasis than ever on how they run their supply chains. "The market for supply chain design is growing as more companies realize they have to reexamine their networks, and make sure their network of distribution centers and plants are in line with changing market conditions," Cooke said.
One example would be a retailer transitioning from selling product across one channel, namely the traditional store, to selling across digital platforms and fulfilling orders from the warehouse or the store itself, or through a drop-shipping arrangement where the manufacturer or supplier handles the deliveries. That firm could use supply chain design software to simulate the impact on its logistics network of setting up its distribution center to serve both online customers and to replenish its stores, Cooke said.