Sinisgalli, former president and COO of CheckFree, took similar positions at Manhattan Associates in March. At the same time, the company announced Sinisgalli would also take over the CEO role when Richard Haddrill became vice chairman of the board on July 1.
“I spent the year before joining Manhattan Associates in the logistics business at a third-party logistics provider that dealt directly with Manhattan Associates and was impressed with the company and the industry from that perspective,” he says. “Prior to that, I spent six plus years as president of CheckFree and had heard, just through living in Atlanta, a lot of very positive things about Manhattan Associates.”
Those positive things include being named to Supply & Demand Chain Executive's Top 100 list of key performers in the supply chain industry, among other accolades.
Manhattan Associates provides supply chain execution solutions. SCE solutions employ a variety of modules that make up an integrated system. Among the many modules are trading partner management, transportation management systems and warehouse management systems. The goal, according to the company’s Web site, is to “streamline business in ways that increase fill rates, improve the bottom line and decrease overall logistics costs.”
While the concept of moving materials from sourcing to the end consumer more efficiently and more cheaply is as old as business itself, the science and industry that is now called supply chain is a relatively recent invention.
“Fourteen (years) sounds like a young babe, but not in this industry, Sinisgalli says. “That’s as experienced as they get.”
The recognition and the company’s reputation “primarily (because of) our industry reputation for customer satisfaction and innovative solutions,” Sinisgalli says. “We’ve been doing this for 14 years, which makes us one of the most experienced players in the space. Our ability to continuously improve our applications with richer functionality as well as better performance, scalability and lower total cost of ownership help to drive what we believe to be very high, industry-wide customer satisfaction.”
With more than 900 customers representing more than 1,600 facilities around the world, Manhattan Associates’ clients are involved in a variety of industries that include consumer goods, food, government, high tech/electronics, industrial/wholesale, life sciences, retail and third party logistics.
“We’re a formidable company in Atlanta,” Sinisgalli says. “We have about 600 people here and another 500 people spread around the globe. We will grow above the market pace.”
Smart Business spoke with Sinisgalli to learn about the state of the supply chain industry and how he plans to make sure that Manhattan Associates continues to increase its market share on the world stage.
How did your past roles help prepare you for this position?
I was fortunate enough, through previous experiences, to have similar situations. I spent about 14 years with Dun & Bradstreet, the last couple at D&B Software. The CheckFree situation was great fun. We grew rapidly during that six-year period in an attractive market. I think that growth through organic initiatives as well as acquisitions, that experience hopefully will be very helpful to Manhattan as we have a similar type opportunity in front of us. I think my last year as a CEO of a third-party logistics company gives me some valuable domain experience in Manhattan’s industry.
What opportunities are there for Manhattan Associates in the supply chain space?
The supply chain services and applications market is generally described as an $8 billion market, today. The component in which we compete, supply chain execution, is about half of that or about $4 billion. Our revenue last year was about $200 million. We’re effectively the largest player in the space, (holding) about an 8 percent market share. The market is estimated to grow about 10 to 12 percent a year for the next five years. So being the largest player in a relatively high-growth market, but a market that is still fairly fractured with the largest player being only 8 percent, gives us great optimism that through very good execution, focus and deployment of strategies that we can be a very substantial software and services company over the next five years.
What drives companies to improve their supply chain operations?
There’s a lot of pressure on companies from things like globalization, international as well as domestic regulation, the need to become more efficient to gain greater visibility into the supply chain, to drive faster turnover of inventory, to order more accurately to meet customer demand. All these marketplace issues, we believe, makes our solution substantially more attractive. So I’m quite excited for the opportunity for Manhattan. The good news for everyone in our space is whether they get it or not, they’re being forced to get it, primarily because of the effect of globalization. Sourcing around the globe, distribution around the globe, the need for visibility into the supply chain, is a fact that everyone in this space is going to have to wrestle with. Certainly, the big local players understand it and most of the regional players understand it as well. I don’t think there’s a whole lot of education that needs to take place here. It’s merely a matter of aligning resources and executing.
How do the demands that companies like Wal-Mart put on their vendors shape the market?
Obviously what Wal-Mart is trying to do is make its supply chain more efficient, lower its costs and get its suppliers to participate in that improved efficiency. And certainly having that mandate from a company as powerful as Wal-Mart helps move the entire industry forward. The department of defense is similarly requiring its contract suppliers to also begin tagging (with RFID radio frequency identification) in 2005. Clearly Wal-Mart makes a major footprint in the landscape and we’re thrilled that they continue to move forward.
How has the economy affected the sale of supply chain solutions?
We have said, as recently as last fall, that we were starting to see some pickup in velocity in the market space that the sales cycle, although still longer than what it had been in the late ‘90s, was beginning to shrink, that buyers were getting more comfortable signing contracts, and our hope was that the market would continue to build momentum. We found that to be true in Q4 of ’03 and Q1 of 04. We do believe that the market is gaining momentum, and our industry will benefit from that.
Does Manhattan Associates have a presence outside the U.S.?
We have 19 offices around the globe in 10 different countries. A little over 20 percent of our revenue today is from outside North America. Actually, we expect that in the next three to five years, a third of our revenue will come from international sources. We are definitely in those spaces, particularly Europe and Asia, where we see very strong future demand for our solutions.
What are the hottest areas of supply chain right now?
Generally speaking, transportation, trading partner management, distributed order management are growing faster than warehouse management primarily because warehouse management as an application suite has been around longer and is a little further penetrated in the market space. Transportation and trading partner management are less penetrated, so those are expected to grow more quickly as a specific product set over the next five years.
What we’re seeing, and we’re quite excited about it, is the demand from clients to have an integrated suite across all the supply chain solutions. For everything from sourcing product to consumption of that product by the end consumer, the marketplace is looking for vendors who can supply them with the complete solution from source to consumption. We call that our integrated logistics suite, integrated logistics solutions, and that takes all of our product sets and allows them to communicate with one another across the supply chain to improve on the solution set for our clients.
Are clients interested in whole solutions or are they searching for point solutions?
What clients have found appealing about our solution is that it’s modular, meaning you can implement just WMS, just TMS, just trading partner, just distributed order management, just RFID for that matter. Yet they know that if they wish to expand upon those implementations, we have a suite of solutions that can better meet your needs. Folks still wish to implement for the most part modularly, one application suite at a time. But, with the confidence that in the future they’ll be able to lean on one primary service supplier to provide a complete supply chain execution solution. Chief technology officers and chief information officers are all being pressured to drive down the total cost of ownership of technology.
What benefits can companies reap from improving their supply chains.
Primarily driving improved return on their investments in information technology not just improvements in ROI in IT, but improvements across their entire business. We believe we provide the best solution from a technology perspective and that solution will allow companies to optimize their supply chains and get greater visibility into their supply chains rapid inventory turns, more accurate ordering of project, faster delivery of that product through the supply chain, greater opportunity for returns to be processed properly everything from source to consumption, allowing companies to operate their supply chains more efficiently with greater visibility.
What does the future hold for Manhattan Associates?
One of the great things about moving into this job is there is a very strong company in place with very strong management and a good strategy. My challenge, and the rest of the management team’s challenge, is to continue to execute more effectively than any of our competitors and to continue to build out our strategy to play in a larger footprint within supply chain. Much of that will come through organic growth expanding through research and development, investment in our product development for organic growth, and we also believe given our strong market position and our strong Wall Street assessment of us that we have more than adequate ability to acquire complementary companies as well to help drive our growth and success. So through a combination of R&D and acquisitions, we believe we’ll play a much larger role in supply chain solutions over the next five to 10 years.
How to reach: Manhattan Associates, (770) 955-7070 or www.manh.com.