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February 21, 1999


By CBR Staff Writer

Baan NV admits it’s been slow to act on its acquisition plans following the purchase of Caps Logistics in September 1998, but says momentum will pick up a gear now it has cleared what it hopes to have been a temporary financial downturn. Several things happened to slow down the pace of progress, says Wayne Webb, EMEA VP of Baan’s Supply Chain Management said. The deal still looks a good one, it just seems badly timed as things turned out. There’s a lot for us to do over the next couple of quarters, he told us.

A leader in its niche, Caps Logistics mainstay is transportation planning and scheduling software for industrial manufacturers, hauliers, logistics firms and other distribution-heavy sectors. Baan’s distribution planning function has always been perceived as relatively weak (something the ERP supplier tried to address when it bought Berclain a few years ago) and sales of Baan ERP have never penetrated the logistics sector. In fact Baan and Caps Logistics have no common customers.

As such, there’s little obvious synergy with Baan’s core installed base and the purchase could well distract Baan into a disparate market segment, at a time when it can hardly afford to deviate from its core business. Perhaps cautious of this Baan says it will allow Caps Logistics to continue operating under its own brand name in its main North American market. Long term, however, the acquisition does offer new market opportunities. Caps customer list includes 24 of the top 100 US logistics providers and Baan intends to leverage its indirect channel infrastructure to gain a foothold in this fast-moving segment.

The amount to be leveraged is questionable, though. The undisclosed deal brings to Baan 135 employees with invaluable domain expertise in logistics and application expertise in the field of supply chain optimization. But Caps still seems to have stronger ties with SAP in this area. As an indication, there’s more mention of R/3 and SAP than of Baan to be seen on the Caps’ web site. At best, Caps’ TransPro and RoutePro product lines do help plug a hole in Baan’s fast developing Supply Chain Solutions (SCS) suite, its attempt to deliver an end-to-end supply chain solution. The TransPro/RoutePro messaging components and database run on Windows NT/SQL Server, now the favored platform at Baan so integration plans should move along smoothly enough. But it’s something that still will take a couple of quarters more Webb said, explaining that development teams were now busy both in Caps’ Atlanta HQ and Baan’s own labs.

Caps does not concentrate solely on transportation planning, however. It also specializes in high-level strategic supply chain modeling and has a product known as Supply Chain Designer that could prove pivotal in the development of SCS because it is designed to help planners visualize a better supply chain.

The Caps product is used to model and optimize the design and planning of global logistics supply chains taking into account restrictions of infrastructure, facilities and locations, resource allocation, inventory histories and so on. Using interactive map-based graphics, the software helps a planner understand and change the design of a supply chain. It provides a business with the long range visibility that’s needed to accurately forecast what will be needed when, while accommodating seasonal variations and fluctuations in resource availability.

Supply Chain Designer has already made an appearance as part of Baan’s Operations Management suite announcement earlier this month. With this Baan claims it’s now the only vendor to offer strategic solutions (planning ‘what to make’, ‘when to make’ and ‘where to make’ using Supply Chain Planner), tactical solutions (managing the build and shipment process with Baan Demand Planner, TransPro and RoutePro) and operational solutions (process management with Baan ERP). Not only do these cover all the key areas of supply chain forecasting, planning, execution, transportation, but they also integrate well with ERP and manuf

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acturing systems, the company suggests.

Whether this feature will win Cap Logistic customers over to Baan ERP remains to be seen, but Baan has to hope to win custom on the back of the deal. Certainly the Cap Logistics’ customer base is far more impressive than its estimated $14+ million revenue stream. An obvious starting point for any cross-sell by the Dutch ERP vendor is the wealth of European based Cap Logistics customers with Amalgamated Beverage Industries, Caliber Logistics Europe, ELF Autochem, Exel Logistics, Nedlloyd Flowmasters, BOC Group Plc, San Miguel Corporation, Coca-Cola Amatil, and TOLL Holdings all figuring on its books.

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