October 12, 2004
Teradata, SeeCommerce Alliance Promises Retail Out-of-Stock Help
By Evan Schuman, eWEEK
Leveraging the deep retail installed base of Teradata, SeeCommerce and Teradata announced on Monday an integrated package focusing on one of retail's most troubling issues: out-of-stocks.
The package—which starts at $150,000—doesn't necessarily promise better analytics, but it does say that the more deeply integrated approach will allow for much more timely updates of product status at many points within the supply chain. In theory, those earlier alerts could allow retailers to make inventory and shelving changes before most out-of-stock problems could happen.
"We're making this information very granular data, which means it is very actionable," said Shannon Williams, SeeCommerce's director of marketing.
SeeCommerce SeeChain software monitors key supply chain metrics, including order changes, inventory levels, forecast accuracy and delivery performance, across detailed, transaction, product, SKU (store-keeping-unit) and store-level data contained in a Teradata Warehouse.
In retail, the stocking prediction problems have often been dealt with not with technology, but by deliberating overstocking and hoping everything will even out, said Paula Rosenblum, director of retail research at The Aberdeen Group. But that's not an ideal strategy as it can lead to spoilage, spot shortages and quite a few inventory accounting headaches. "The problem is that you don't have the right stuff in the right place at the right time," she said.
Rosenblum sees two advantages to what SeeCommerce and Teradata announced. For retailers who are already Teradata customers, she liked the almost seamless integration. "It's handy that they are dealing with the integration for [retailers]," she said. "It takes away the integration challenge. Pre-integrating solves a huge problem for IT."
The second advantage that Rosenblum sees is a more comprehensive supply chain analysis, including the distribution center and with various suppliers.
SeeCommerce's Williams said he sees the strongest part of the combined product being the user interface. Retailers are able to see results via an integrated Web front end instead of less-frequent ad hoc reports. "We're running our application native on the Teradata database, and we're pulling in supplier performance" and noting activity at both the shelf and the distribution center level, Williams said.
Historically, SeeCommerce has had to do its forecasting in a much slower and less-integrated manner. "We've always brought in data from other places—our databases have either been Oracle or DB2—and then drive correlations off of those," Williams said, adding that with the new announcement, "we don't have to actually pull that data as it's all coming directly into the data warehouse. Look at the whole supply chain and how each area contributes. We show the holistic picture."
One close market rival—Manugistics—said the move makes perfect sense for current Teradata customers, but perhaps not for others.
"It's a cool concept. If they have really done all of the packaging to work with Teradata out of the box, that's impressive," said Patrick Smith, director of analyst relations at Manugistics.
But Smith argues that there is a key difference between the two. SeeCommerce, Smith argues, would then be able to gather the data and analyze the data, but it couldn't recommend what the retailer should do about it. Manugistics' package could, he said.
SeeCommerce "is not going to have the muscle to figure out what to do next. Just telling someone you have a problem is good," Smith said, "but solving it is much better."
The "solving" part of the equation—coupled with the ability to project likely inventory problems before they happen, which is essentially predictive analytics—is common with many business intelligence applications, but not in the supply chain, Smith said.
Smith also stressed that Manugistics—among others—focuses on the ability to interact with many software players, including IBM DB2 and databases from Oracle Corp., SAS AP and Teradata, as well as application vendors SAP, J.D. Edwards and PeopleSoft.