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Home » Llamasoft acquires supply chain software division from Barloworld
Forward Thinking

Llamasoft acquires supply chain software division from Barloworld

November 4, 2015
Ben Ames
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Cloud-based supply chain software firm Llamasoft Inc. said today it has acquired the supply chain software division from South African rival Barloworld Ltd., in a move that continues Llamasoft's expansion into global markets to challenge major providers like Redwood City, Calif.-based Oracle Corp. and the German giant SAP SE.

The move consolidates the market for supply chain design applications by allowing Llamasoft to absorb Johannesburg-based Barloworld's "Cast" software, a competitor to Llamasoft's own "Supply Chain Guru." Companies use supply chain design applications to reduce logistics costs by modeling changes in plant and warehouse locations.

Llamasoft, based in Ann Arbor, Mich., will also take over Barloworld's Optimiza software, an inventory replenishment tool. That allows Llamasoft to move into the market of supply chain planning tools—used by companies for advanced planning and scheduling tasks—and offers shippers an additional option to big-name products from SAP, Oracle, and JDA Software Group Inc.

The firms did not reveal the purchase price, but said the combined company would now have nearly 400 employees, over $50 million in annual revenue, and a combined customer base that includes more than 500 of the world's largest and best known companies, according to Ginger Stegmier, Llamasoft's vice president of global marketing.

In addition to acquiring the software applications, Llamasoft will also gain the Barloworld SCS team's full range of technology and staff. Llamasoft plans to keep its headquarters in Michigan, while employing the majority of the former Barloworld team in their U.K. offices.

The companies have also agreed to form a strategic relationship, with Barloworld Logistics—the former parent company of Barloworld SCS—providing access to all Llamasoft products as a value-added reseller.

This change in position could gain Llamasoft a seat at the table with larger clients than it currently serves. In the past, Llamasoft has played an upstart role, competing against its larger opponents by providing software products with comparable functionality but far better ease of use, said James A. Cooke, principal analyst at Nucleus Research Inc., a research firm.

In April, the company made an ambitious move to apply this strategy to a wider market segment and eliminate a competitor when it acquired the LogicTools supply chain applications suite from IBM Corp., including IBM's LogicNet Plus, Inventory and Product Flow Analyst, and Transportation Analyst products.

That strategy took on greater importance in September when Llamasoft gained $50 million in financing from investment banking giant Goldman, Sachs & Co. to fund technology development and growth initiatives in its supply chain design, analytics, and planning solutions.

Now armed with a big checkbook, Llamasoft has knocked another competing platform out of the market with its acquisition of the Barloworld division.

"Until now, Llamasoft was a one-trick pony," Cooke said. "Players like Manhattan Associates Inc., JDA, and Logility all have more than one app, covering both supply chain planning and execution."

In addition to consolidating its client base, the move is also an chance for Llamasoft to enter the European market, picking up Barlowsoft clients such as Jaguar Cars, BASF SE, and Tesco PLC.

These multinational firms have a great interest in eliminating bottlenecks in the flow of global trade, improving efficiencies, and cutting costs.

"You can do as much as you want about beating up your carriers about lowering transportation costs, but supply chain design tools have taken off lately because they are a more effective way to cut costs," said Cooke. "They let you play with scenarios about where your plants and warehouses are located. If you place the nodes of your supply chain network in the right place, you can reduce transit miles and you can reduce freight costs."

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Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly?s sister publication, DC Velocity.

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