Dematic acquires Reddwerks to leap into WES software space

Material handling and logistics systems provider Dematic Corp. will acquire Reddwerks Corp., an Austin, Texas-based warehouse execution software (WES) provider, the companies said Wednesday. Terms of the transaction were not disclosed.

The combination integrates Reddwerks' WES systems with Dematic's warehouse automation tools to give customers real-time decision-making engines that optimize their material and information flows, Atlanta-based Dematic said.

In today's environment, "the only way to effectively achieve responsive order fulfillment is through an automated supply chain, powered by comprehensive real-time software. Traditional batch processing cannot sufficiently respond to either the operational variability or the speed required," Dematic President and CEO Ulf Henriksson said in a statement.

Customers typically use a WES platform to optimize a highly automated environment and balance the movement of people, resources, and product throughout the four walls of a DC. Adding Reddwerks helps Dematic fill a void between warehouse control system (WCS) and warehouse management system (WMS) platforms and improve customers' performance in an automated environment, said John Santagate, research manager for supply chain execution at IDC Manufacturing Insights, a consultancy.

After the merger, Reddwerks will operate as a subsidiary of Dematic under the name Dematic Reddwerks.

Dematic is wise to maintain the Reddwerks' name while merging the two firms' capabilities, Santagate said. "Reddwerks has a good brand; they are well known in the WES field, and you don't want to disrupt that," he said.

Santagate said Dematic's strategy is similar to the approach taken in 2014 by Accellos Inc. after it acquired HighJump Software Inc. in a combination of technology providers to support omnichannel fulfillment. "HighJump continues to operate under its own name and maintain its brand, and not be fully integrated into Accellos," he said.

Likewise, the pressure of meeting omnichannel demands was a key factor driving Dematic's acquisition of Reddwerks, Santagate said.

"Dematic is building out its capabilities around omnichannel, where there is a lot of confusion and challenge," Santagate said. "When shoppers say they want to 'buy what I want, wherever I want, and have delivery where I want it,' that adds a tremendous layer of flexibility into fulfillment."