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GT Nexus and Infor

ThesisERP software helps manufacturing companies plan, schedule, orchestrate, and monitor shop floor productioninside the walls of the enterprise. The continued shift toward outsourcing and expansion to new global markets tomeet multi-regional consumer demand moves the shop floor outside of the OEMs’ ERP system to other partners.OEMs, brand owners, and their supply chain partners all need visibility on production status, and inventory in transitor at rest, so they can allocate incoming shipments to customers, distribution centers, and retail outlets with thegoal of minimizing inventory buffer in the chain.

The GT Nexus network connects global companies to their partners, both onshore and offshore, and provides realtime visibility on order and shipment status, so brand owners can optimize their supply chain for greater agility,faster turns, and lower costs. That connectivity is accomplished by integrating the GT Nexus network directly intothe back-office systems of the enterprise (including accounts payable, ERP, warehouse management, and ordermanagement systems) and then doing the same on the other end with the suppliers, many of which are Infor®customers.

This is not the same as managing a traditional supply chain and receiving raw material or sub-assemblies for finalassembly in a brand-owned plant. Instead, the production schedule is now managed by third parties, whichcreates a need for multi-enterprise order management and coordination—in effect, a business network.

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The key features of the platform

■ Procure to pay shares and manages the masterrecord of the order across multiple suppliers.Everyone can see the same copy of the order andall its subsequent changes. 90% of all orderschange (style, quantity, ship to locations—based onchange demand), so keeping all parties informed isa key requirement.

■ GT Nexus transmits the order and subsequentchanges from the brand owners to the contractor.GT Nexus also helps the contractor schedulefreight and then transmits in transit status from thethird-party logistics providers back to the brandowner. In addition, GT Nexus prints the labels onthe boxes to meet each brand owner’s specificrequirements for shipping receipts.

■ The brand owner needs to know where theproducts are in transit and the contractor needs toknow when they’ve been received, since thattriggers settlement and payment. GT Nexustransmits that data to both parties and initiates bankinstructions for payment at settlement time. Thesettlement is done by netting accounts at the bank,and GT Nexus gets paid by taking some basispoints of the settlement transaction. So, thepayment is integrated with the transaction network.

■ This distributed order management acrossenterprises is designed to automate the necessarycommunications between partners to orchestratecomplex, long running orders with a high volume ofchanges, messages, and required services. Thoseservice types include:

- Purchase Order Receipt and Change Management

- Order Balance Tracking

- Order Status Inquiry

- Standard and Custom Reporting

- Invoice Creation/e-Invoicing

- Automated Data Compliance (N-way Matching)

- Custom Invoice Creation

- Additional EDI Document Maintenance

- Real-time Order Inquiry by Customer

- Advanced Ship Notices

- Pre- and Post-Export Financing and Factoring

■ GT Nexus’ customer concentration is in retailapparel and footwear and manufacturing. Theindustries that need this network are the ones thatoutsource manufacturing aggressively. Apparelindustry margins are low, with a labor drivenmanufacturing process.

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Offshore manufacturing generates a need formulti-modal scheduling and transportationmanagement, which is part of the network. Agentsinteract with the network to verify shipments andadd bills of lading and customs documents. Thebulk of the suppliers on the network are in offshoremarkets and the brand owners are in the US andEurope.

■ One of GT Nexus’ key advantages is that all majorocean carriers are already connected to theplatform, and actively supporting other platformcustomers. To schedule ocean-bound shipments inthe US, GT Nexus is the dominant platform; it hasintegrations to all the carriers and no one else hasthe critical mass. Even 3PLs like UPS rely on GTNexus for that. GT Nexus’ ocean-carrierrelationships are long standing, proven and hard toduplicate. GT Nexus also has added airtransportation, and recently added ground truckingin the US. Customers would like a single platformfor all shipping needs and this is potentially the firstcomplete multimodal transportation managementplatform. GT Nexus formed a Shipper Council,which is a group of executives from very largeimporters and exporters who came togetherbecause they all share GT Nexus as theirinternational supply chain technology platform. TheShipper Council participants come from a cadre ofcompanies that have over $1 trillion in revenues,and move over 5 million TEUs (twenty footequivalents) of ocean freight annually.

■ The apparel and footwear contractors on the GTNexus network overlap with Infor’s mid-marketoffshore manufacturing customers. These are costconscious, low margin manufacturing companiesthat need complex functionality, but cannot affordtraditional on-premise systems. The same is truefor brand-owned factories in these offshorelocations. Infor M3 has traditionally done well in thismarket.

■ GT Nexus is a single instance, true cloud service.Unlike other networks, it has a single code base forall customers, with a single view of the order acrossthe value chain.

■ GT Nexus has a single canonical map for ordersand contractors on the network, which means thatsuppliers join the network once and can talk to allbuyers with a single connection. That is not thecase with other networks where suppliers have tobuild unique integrations for each buyer or log intodifferent buyer portals.

Synergies1. Infor creates ERP applications with deep industry

features to build products inside the walls of theenterprise. GT Nexus is an ERP system for outsideof the enterprise, when a third party is building theproduct. Order visibility in a multi-enterpriseproduction network is what originally drove theneed for the network. The idea is to enrich thatvisibility with earlier stage production data.

2. Infor could take that order visibility further up thechain to sales, marketing, quoting, andmerchandise planning. These are processes thatindicate demand before there is actually an order.

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This is valuable information for sales andoperations planning (S&OP)—a key Infor productsegment. This data can be shared with suppliersfor more accurate capacity planning.

3. GT Nexus is moving into pick, pack, and ship statusinside the factory, and light inventory management.Infor is already a major supplier of warehousemanagement systems and could morecomprehensively provide inventory status withhigher fidelity data. Infor warehouse managementapplications could become another service in theGT Nexus network.

4. The GT Nexus network is for direct procurement.Infor and GT Nexus could create the first networkthat encompasses both indirect (the Ariba market)and direct procurement. Procurementprofessionals want one network for both. Infor hasthe workflow, catalog management, and punch-outtechnology, but not the network. GT Nexus has thenetwork and on-boarding technology to addadditional suppliers, but no front-end workflow forprocurement. Our applications and their networkare complementary.

5. GT Nexus could be a catalyst for moving moremanufacturing customers to the cloud. Infor couldembed the GT Nexus network into its ERPapplications to eliminate integration tasks. Gartnerhas described the “extended enterprise” with“embedded integration,” which is the originalconcept Infor began to target four years ago.Pre-wiring Infor applications with network andcollaboration services would be a differentiator.Suppliers on the GT Nexus network would havemotivation to go with an Infor ERP system, and tolet Infor be responsible for network integration.

6. Infor has leading products that manage thecomponents, raw materials, and configurations thatmake up a final product—the Bill of Materials. InforPLM (product life cycle management) documentsall components of the BOM. Those componentschange often and can be configured differentlywith Infor CPQ (configure price quote).Manufacturing needs this information to know whatto produce and how. Infor could help allconstituencies gain access to the current BOM, sothat what is designed and specified is actually whatis built and shipped.

7. Infor customers with heterogeneous ERP systemsacross their enterprises sometimes decide toconsolidate to a single ERP solution to get moreaccurate information on orders and shipments.That’s an expensive decision. GT Nexus canprovide that single view of the order across ERPsystems, without that high-risk consolidation. Thedeconstruction of the monolithic ERP suite to moremodular services is a trend already underway;helping customers implement that architecture,eliminating the need for a large consolidation, andstaying with a distributed, purpose-built ERP systemis to Infor’s advantage.

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8. Many companies are employing a “two-tier ERP”strategy, as defined by Gartner. The idea is to notduplicate the expensive infrastructure at all remotelocations where a company may have less ITexpertise and smaller operations. Infor and GTNexus would have a good value proposition forthese OEMs: Let Infor handle your remote locationsand your suppliers, and put them all on a singlenetwork with a standard ERP system for completenetwork visibility.

9. Functions and data within GT Nexus are availablevia REST APIs (application programming interfaces).Hook & Loop and other developmentorganizations can develop applications andanalytics that leverage that data and co-mingle itwith other production processes and data.

Information about thisdocumentThis document reflects the direction Infor may takewith regard to a pending acquisition and the specificproduct(s) described in this document, all of which issubject to consummation of the proposed acquisitionand change by Infor in its sole discretion, with orwithout notice to you. This document is not acommitment to you in any way and you should not relyon this document or any of its content in making anydecision. The acquisition transaction contemplatedherein has not been completed. Infor is notcommitting to develop or deliver any specifiedenhancement, upgrade, product, or functionality, evenif such is described in this document.

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