Subscription Fees Increased 29%, Cloud Services Annual Contract Value Increased 24% for the Quarter

ATLANTA (February 24, 2021) American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the third quarter of fiscal year 2021.

Key Third Quarter Financial Highlights:

  • Subscription fees were $7.5 million for the quarter ended January 31, 2021, a 29% increase compared to $5.8 million for the same period last year, while Software license revenues were $0.5 million, an 86% decrease compared to $3.7 million for the same period last year, reflecting our continued transition to the Software as a Service (SaaS) engagement model.
  • Cloud Services Annual Contract Value (ACV) increased approximately 24% to $31.6 million as of the quarter ended January 31, 2021 compared to $25.5 million as of the same period of the prior year.
  • Total revenues for the quarter ended January 31, 2021 decreased 10% to $27.7 million, compared to $30.6 million for the same period of the prior year.
  • Recurring revenue streams for Maintenance and Cloud Services were 64% of total revenues in the quarter ended January 31, 2021 compared to 54% in the same period of the prior year.
  • Maintenance revenues for the quarter ended January 31, 2021 decreased 6% to $10.2 million compared to $10.8 million for the same period last year.
  • Professional services and other revenues for the quarter ended January 31, 2021 decreased 8% to $9.5 million compared to $10.3 million for the same period last year.
  • Operating earnings for the quarter ended January 31, 2021 decreased 67% to $0.9 million compared to $2.8 million for the same period last year.
  • GAAP net earnings for the quarter ended January 31, 2021 decreased 30% to $2.3 million or $0.07 per fully diluted share compared to $3.3 million or $0.10 per fully diluted share for the same period last year.
  • Adjusted net earnings for the quarter ended January 31, 2021, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, decreased 26% to $3.0 million or $0.09 per fully diluted share compared to $4.0 million or $0.12 per fully diluted share for the same period last year.
  • EBITDA decreased by 54% to $2.2 million for the quarter ended January 31, 2021 compared to $4.7 million for the same period last year.
  • Adjusted EBITDA decreased by 45% to $2.9 million for the quarter ended January 31, 2021 compared to $5.3 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (expense)/income & other, net, income tax expense and non-cash stock-based compensation expense.

Key Fiscal 2021 Year to Date Financial Highlights:

  • Subscription fees were $20.8 million for the nine months ended January 31, 2021, a 32% increase compared to $15.8 million for the same period last year, while Software license revenues were $1.8 million, a 73% decrease compared to $6.5 million for the same period last year, reflecting our continued transition to the SaaS engagement model.
  • Total revenues for the nine months ended January 31, 2021 decreased 4% to $82.8 million compared to $86.2 million for the same period last year.
  • Recurring revenue streams for Maintenance and Cloud Services were 62% of total revenues for the nine-month period ended January 31, 2021 compared to 56% in the same period of the prior year.
  • Maintenance revenues for the nine months ended January 31, 2021 were $30.7 million, a 6% decrease compared to $32.7 million for the same period last year.
  • Professional services and other revenues for the nine months ended January 31, 2021 decreased 6% to $29.6 million compared to $31.3 million for the same period last year.
  • For the nine months ended January 31, 2021, the Company reported operating earnings of approximately $2.5 million compared to $4.5 million for the same period last year, a 45% decrease.
  • GAAP net earnings were approximately $5.0 million or $0.15 per fully diluted share for the nine months ended January 31, 2021, a 19% decrease compared to $6.2 million or $0.19 per fully diluted share for the same period last year.
  • Adjusted net earnings for the nine months ended January 31, 2021, which excludes stock-based compensation expense and amortization of acquisition-related intangibles, decreased 16% to $7.3 million or $0.22 per fully diluted share, compared to $8.6 million or $0.27 per fully diluted share for the same period last year.
  • EBITDA decreased by 36% to $6.9 million for the nine months ended January 31, 2021 compared to $10.8 million for the same period last year.
  • Adjusted EBITDA decreased 28% to $8.8 million for the nine months ended January 31, 2021 compared to $12.3 million for the nine months ended January 31, 2020. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation.

The overall financial condition of the Company remains strong, with cash and investments of approximately $100.8 million and no debt as of January 31, 2021. During the third quarter of fiscal year 2021, the Company paid shareholder dividends of approximately $3.6 million.

“Third quarter fiscal year 2021 saw continued adoption of our cloud services offerings with a 29% growth in Subscription Fees and a 24% increase in Annual Contract Value, reflecting the increasing momentum across the industry towards cloud-based supply chain transformation solutions,” said Allan Dow, CEO and president of American Software. “The impact of unforeseen risks over the last 12 months such as COVID-19 has driven increased interest in supply chain transformation initiatives, helping develop a strong pipeline for our innovative digital supply chain platform for the fourth quarter 2021 and beyond.”

“This past quarter also brought renewed attention to the responsibility of supply chains to help ensure the ethical treatment of workers around the world following actions taken by the United States Customs and Border Protection to seize imports suspected of containing materials produced with forced labor,” continued Dow. “The release of our digital supply chain traceability solution highlights our commitment to help companies ensure transparency across their supply chains and exceed their corporate social responsibility goals.”

Additional highlights for the third quarter of fiscal year 2021 include:

Customers & Channels

  • Notable new and existing customers placing orders with the Company in the third quarter include: Ansell Limited, Bruni Glass S.p.A., C&A Mexico, Cariuma Central Pte. Ltd., Color Image Apparel, Inc., Diversey, Inc., Dixon Valve & Coupling Company, LLC, Dyehard Fan Supply, LLC, Husqvarna AB, John Paul Richard, Rhone Apparel, Spanx, Stony Apparel Corp, The Echo Design Group, Topson Downs of California, Inc., Huhtamaki, Inc., Savant Technologies LLC, Sopal SA, Kyjen Company LLC, McIlhenny Company, and Tencate Geosynthetics.
  • During the quarter, SaaS subscription and/or software license agreements were signed with customers located in the following 11 countries: Australia, France, Ireland, Italy, Mexico, New Zealand, Singapore, Sweden, Tunisia, United Kingdom, and United States.
  • Logility, Inc., a wholly owned subsidiary of the Company, invited attendees of the 2020 NextGen Supply Chain Conference to attend the session “Pushing the Efficient Inventory Frontier at The Kraft Heinz Company,” led by David Villalpando, senior analyst, logistics analytics at The Kraft Heinz Company.

Company and Technology

  • Logility and New Generation Computing, Inc. (NGC), a wholly owned subsidiary of the Company, announced the availability of a digital traceability solution which allows brand owners and retailers to document the chain of custody from component origin to importer of record. During the quarter, United States Customs and Border Protection announced a region-wide withhold release order on cotton products and tomato products produced in China’s Xinjiang Uyghur Autonomous Region. This new solution ensures that companies can prove their imports are free from suspect materials.
  • Logility announced the company won IDC’s SaaS CSAT Award for Supply Chain Management Customer Satisfaction. Logility scored significantly higher than its peers’ average in areas such as low total cost of ownership (TCO), user experience, high availability, industry specialization, out-of-the-box availability, and availability of training. The announcement highlights relentless passion to deliver the highest level of customer service and to ensure its customers around the world can rely on the supply chain innovations the company brings to the market.
  • Logility invited attendees to the webcast, “Thriving Through a Period of Disruption.” The discussion included industry experts David Maloney, editorial director, Supply Chain Quarterly, and Mac McGary, executive vice president, Logility. The live webcast explored how resilient planning helps protect organizations through disruptions and optimizes supply chains for a stronger outlook.
  • NGC president Mark Burstein was accepted as a member of the Forbes Technology Council, an invitation-only community of leading technology executives. As a member of the Forbes Technology Council, Burstein shares his expertise on the intersection of supply chain technology in regular contributions to Forbes.
  • NGC was named a leading retail software company in the RIS Software LeaderBoard for 2021. NGC was named among the top 20 vendors in 17 categories, including top three rankings in nine categories such as Overall Performance, Customer Satisfaction for Apparel Vendors, Return on Investment and Total Cost of Operation.
  • Demand Management, Inc., a wholly owned subsidiary of Logility, was named one of Food Logistics’ FL100+ Top Software and Technology Providers for 2020. This marked the company’s twelfth time receiving the award.
  • Logility announced and invited attendees to the webcast, “Roadmap to Overcoming Five Obstacles to Achieving Multi-Echelon Inventory Optimization.” The discussion featured industry experts Martijn Lofvers, founder and chief trendwatcher, Supply Chain Media; Jonathan Jackman, vice president, EMEA, Logility; and Gokhan Usanmaz, product owner, innovation, Logility. This live event explored how Multi-Echelon Inventory Optimization (MEIO) can help improve customer service levels while removing excess and obsolete inventory.

About American Software, Inc.

Atlanta-based American Software, Inc. (NASDAQ: AMSWA), through its operating entities delivers an innovative technical platform with AI-powered capabilities for supply chain management and advanced retail planning that is accelerating digital supply chain optimization from product concept to customer availability. Logility, Inc., is helping large enterprise companies transform their supply chain operations to gain a competitive advantage. Recognized for its high-touch approach to customer service, rapid implementations and industry-leading return on investment (ROI), Logility customers include Big Lots, Husqvarna Group, Parker Hannifin, Sonoco Products and Red Wing Shoe Company. Demand Management, Inc. delivers affordable, easy-to-use supply chain planning solutions designed to increase forecast accuracy, improve customer service and reduce inventory to maximize profits and lower costs. Demand Management serves customers such as Siemens Healthcare, AutomationDirect.com and Newfoundland Labrador Liquor Corporation. New Generation Computing, Inc. powers the digital supply chain to enable apparel brand owners and retailers to maximize revenue and profit by accelerating lead times, streamlining product development, and optimizing sourcing and distribution. NGC customers include Brooks Brothers, Carter’s, Destination XL, Fanatics, Foot Locker, Jockey International, Lacoste and Spanx. The comprehensive American Software supply chain and retail planning portfolio delivered in the cloud includes advanced analytics, supply chain visibility, demand, inventory and replenishment planning, Sales and Operations Planning (S&OP), Integrated Business Planning (IBP), supply and inventory optimization, manufacturing planning and scheduling, retail merchandise and assortment planning and allocation, product lifecycle management (PLM), sourcing management, vendor quality and compliance, and product traceability. For more information about American Software, please visit www.amsoftware.com, call (404) 364-7615 or email kliu@amsoftware.com.

Operating and Non-GAAP Financial Measures

The Company includes operating measures (ACV) and other non-GAAP financial measures (EBITDA, adjusted EBITDA, adjusted net earnings and adjusted net earnings per share) in the summary financial information provided with this press release as supplemental information relating to its operating results. This financial information is not in accordance with, or an alternative for, GAAP-compliant financial information and may be different from the operating or non-GAAP financial information used by other companies. The Company believes that this presentation of ACV, EBITDA, adjusted EBITDA, adjusted net earnings and adjusted net earnings per share provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations. ACV is a forward-looking operating measure used by management to better understand cloud services (SaaS and other related cloud services) revenue trends within the Company’s business, as it reflects the Company’s current estimate of revenue to be generated under existing customer contracts in the forward 12-month period. EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, and income tax expense. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation expense.

Forward Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. There are a number of factors that could cause actual results or performance to differ materially from what is anticipated by statements made herein. These factors include, but are not limited to, continuing U.S. and global economic uncertainty and the timing and degree of business recovery; the irregular pattern of the Company’s revenues; dependence on particular market segments or customers; competitive pressures; market acceptance of the Company’s products and services; technological complexity; undetected software errors; potential product liability or warranty claims; risks associated with new product development; the challenges and risks associated with integration of acquired product lines, companies and services; uncertainty about the viability and effectiveness of strategic alliances; the Company’s ability to satisfy in a timely manner all Securities and Exchange Commission (SEC) required filings and the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted under that Section; as well as a number of other risk factors that could affect the Company’s future performance. For further information about risks the Company could experience as well as other information, please refer to the Company’s current Form 10-K and other reports and documents subsequently filed with the SEC. For more information, contact: Kevin Liu, American Software, Inc., (626) 657-0013 or email kliu@amsoftware.com.

Vincent C. Klinges
Chief Financial Officer
American Software, Inc.
(404) 264-5477

Two-Part Online Series Explores the Keys to Supply Chain Resilience

ATLANTA – February 18, 2020 – Logility, Inc., automating the digital transformation of supply chain optimization and advanced retail planning, invites you to the upcoming webcast: Deliver Better Business Outcomes – Managing Demand Variability. Featuring industry leaders Lora Cecere, founder, Supply Chain Insights, and Mac McGary, executive vice president, Logility; this two-part live webcast series will explore how to build a more resilient supply chain and turn unforeseen challenges into opportunities for differentiation and growth.

In part one of this two-part series, we will explore what it means to ‘deliver better business outcomes’ in 2021 and share insights into the main drivers of demand variability. The webcast will discuss how advanced technologies, such as AI and machine learning, and the use of a digital twin can accelerate planning and execution. Additionally, attendees will understand the importance of change management across the enterprise to help sustain resilience.

Webcast at a Glance

  • Title: Deliver Better Business Outcomes (Part 1) – Managing Demand Variability
  • Speakers: Lora Cecere, founder, Supply Chain Insights, and Mac McGary, executive vice president, Logility
  • When: Wednesday, February 24, 2021 at 11:00 a.m. EST
  • Register Today: https://bit.ly/3dfYw1W

About Logility

Accelerating the digital sustainable supply chain, Logility helps companies seize new opportunities, sense and respond to changing market dynamics and more profitably manage their complex global businesses. The Logility® Digital Supply Chain Platform leverages an innovative blend of artificial intelligence (AI) and advanced analytics to automate planning, accelerate cycle times, increase precision, improve operating performance, break down business silos and deliver greater visibility. Logility’s SaaS-based platform transforms sales and operations planning (S&OP) and integrated business planning (IBP) processes; demand, inventory and replenishment planning; global sourcing; quality and compliance management; product life cycle management; supply and inventory optimization; manufacturing planning and scheduling; retail merchandise planning, assortment and allocation. Logility customers include Big Lots, Husqvarna Group, Parker Hannifin, Sonoco Products and Red Wing Shoe Company. Logility is a wholly owned subsidiary of American Software, Inc. (NASDAQ: AMSWA). To learn how Logility can help you make smarter decisions faster, visit www.logility.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. There are a number of factors that could cause actual results or performance to differ materially from what is anticipated by statements made herein. These factors include, but are not limited to, continuing U.S. and global economic uncertainty and the timing and degree of business recovery; the irregular pattern of the Company’s revenues; dependence on particular market segments or customers; competitive pressures; market acceptance of the Company’s products and services; technological complexity; undetected software errors; potential product liability or warranty claims; risks associated with new product development; the challenges and risks associated with integration of acquired product lines, companies and services; uncertainty about the viability and effectiveness of strategic alliances; American Software, Inc.’s ability to satisfy in a timely manner all Securities and Exchange Commission (SEC) required filings and the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted under that Section; as well as a number of other risk factors that could affect the Company’s future performance. For further information about risks the Company and American Software could experience as well as other information, please refer to American Software, Inc.’s current Form 10-K and other reports and documents subsequently filed with the SEC. For more information, contact: Kevin Liu, American Software, Inc., (626) 657-0013 or email kliu@amsoftware.com.

Logility® is a registered trademark of Logility, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.

Media Contact:

Justin Siefert
Logility
jsiefert@logility.com
404.264.5485
www.logility.com/blog

Time to Adopt Next Genalytics

The pace of change in retail has never been faster than it is now. Couple that with disruptions, big and small, and it’s not surprising that consumers are now even more unpredictable than before. 

In a recent Logility blog post, Richie Proud, vice president of planning and inventory at Curaleaf, said this about the upheaval in the retail fashion sector: The digital transformation of the fashion industry has been immense over the past 6 months. Almost all companies that I speak with are ecstatic over their e-commerce sales, but readily admit that the growth in e-commerce does not offset the decline in brick & mortar stores. This divide will only increase as we enter the make-or-break time period of Q3 2020 and Q4 2020 – as we have never experienced a “COVID Black Friday.” Traditional thinking would have teams placing deep buys of highly promotional items to be ready for the onslaught of in-store shopping starting the week of November 22, 2020. But recent sales data has shown us the public is still hesitant to return to malls, however they fully embrace the digital experiences offered by many retailers. 

New market dynamics should spur the retail industry to seek new ways of measuring performance. It may not be the news you were hoping for, but traditional retail success metrics are fast becoming obsolete in today’s economy. The Internet has changed how business is done, but brick-and-mortar businesses remain. In fact, go-to-market strategists have elevated their game by adopting a channel-agnostic focus as opposed to a binary physical-versus-digital orientation.  

It’s difficult to state the case more clearly and succinctly than Matthew R. Shay, president and CEO of the National Retail Federation, does here: While retail continues to evolve and adapt to changing consumer preferences and new technologies, it is increasingly critical to develop newer, more relevant metrics to accurately value and measure retailers. The current suite of metrics were built for a time that no longer exists. The lines between channels have blurred beyond recognition, making it challenging to properly attribute a sale with these outdated metrics…we need a common set of updated metrics that more accurately measures retailer performance and captures the full value that retailers are creating.  

The processes, tools, and analytics that we’ve relied on in the past — like sales and inventory turns — will no longer be sufficient to move us forward. At the same time, our fundamental goals have remained constant: providing compelling customer offerings, optimizing inventory placement, and converting that inventory into cash.   

This predicament reminds me of the situation faced by Oakland A’s GM Billy Beane and his quant-jock sidekick Bill James in 2002, when the New York Yankees were spending $140M a year on players to the A’s $40M. Knowing they couldn’t match New York’s money, Beane and James attacked the problem with metrics. Throw in a Michael Lewis book and a Brad Pitt movie, and you have Moneyball.  

It’s become somewhat fashionable to find flaws with Lewis’s portrayal, but Beane’s creativity and bravery aren’t questioned. Without completely discarding traditional baseball performance measurements like home runs and RBIs, he set out to find new metrics that would help him build a competitive team of largely undervalued players. On-Base Percentage, for example, turned out to be a strong predictor of success. His commitment never wavered. When the A’s manager balked and played expensive, free agent veterans instead of Beane’s hand-picked “affordable” players with a knack for getting on base, Beane traded away the veterans.  

Retail needs a Moneyball moment. It’s time to leverage the vast amount of data available to us and create revolutionary ways of measuring value, gaining insights, and driving customer demand. Logility is at the forefront of this movement with its next generation of analytics, called Next Genalytics.  

Next Genalytics isn’t a one-size-fits-all prescription for retailers. There is no mandate to focus on X, ignore Y, etc. Rather, the concept has built-in flexibility. The metrics you choose to develop, and track will likely be based on corporate lifecycle stage (i.e. maturity) among other variables. A young business may determine that customer acquisition and sales per unique customer are critical drivers of success while a mature business might focus on free cash flow. 

The point and the promise of Next Genalytics is this: there are modern, proven tools to help deliver on your analytics needs. Technology is not the limitation. Imagination, creativity and perseverance constitute the first hurdle. The second is capturing the data you desire.  

Relying solely on traditional retail performance metrics won’t work. Time for action. Now, let’s play ball! 

Sources: 

The Future of Retail Metrics. Sides, Marsh, Hobbs, Furman. Deloitte Development LLC. 2019. 

A Roadmap for Designing an Enterprise that Thrives During Supply Chain Disruptions

We’ve arrived at mile markers 7, 8 and 9 on the road to building lasting resilience and agility into your extended supply chain. Thanks for sharing the journey with me.   

You’ll recall that the catalyst for this 4-part series was a renewed sense of obligation and urgency among Logility’s many seasoned supply chain and analytics professionals to share what we’ve learned over the years. As they say at Farmers Insurance, “We know a thing or two because we’ve seen a thing or two.” (Full disclosure, we thought we had seen it all, but 2020 has no equal.) 

Earlier this year we created a task force charged with documenting a program management methodology that would take CEO-driven enterprise-wide objectives and produce a “resiliency roadmap” that all can follow. The idea was to package our learning with a structure that you can leverage and adapt. It’s 12 steps, and in the first two posts I covered steps 1 through 6:  

  1. Assessment 
  2. Justification 
  3. Vision 
  4. Explore 
  5. Collaborate 
  6. Elevate

Now let’s cover steps 7 through 9. 

  1. Business Continuity. A long time ago in a business climate far, far away, business continuity was an IT responsibility, often paired with terms like disaster recovery, fail-over, recovery time objective, and recovery point objective. These were the glory days of the pessimistic approach to confronting supply chain disruptions. Success was defined as not dying. 

    At Logility, we applaud companies that have in recent years taken a broader, more optimistic view of business continuity. Traditional risk assessment remains essential, but companies should seek competitive advantage during challenging times. One way to do this is by strengthening and augmenting the supply chain.  

    Before introducing steps 8 and 9, Visibility and Change Management, let’s step back for a moment and critique the 12-step framework. It’s tempting to view each step as discrete and strictly chronological. But the world is messier than that. In reality, Visibility and Change Management permeate or at least influence most of the other steps on our journey.  
  1. Visibility. An enterprise seeking to fortify its supply chain must constantly strive for better data visibility across the entire network. We’ve observed that a certain “lunch bucket” mentality is useful. This step shouldn’t be left to theorists and data scientists. Improved visibility — and therefore improved decision-making — comes from practitioners tirelessly seeking novel insights from reliable data. 
  1. Change Management. This is where all consulting companies begin and end their presentations. There’s a reason for that. Perfect process and perfect technology won’t matter if employees are confused and unwilling to embrace new roles. In other words, culture eats strategy for breakfast. There will be strategy and ownership changes. Be honest. Communicate early and often. The good news is everyone can be empowered to make changes based on objective rather than subjective analyses.  

Dry Ice Dry Ice Baby 

For homework, think about how you would approach the massive disruption hitting the world’s “cold chain” as COVID-19 vaccines move through final approvals. At the time of writing, here are just a few of the logistical challenges that lie in wait: 

  • Vaccines like to be kept cool, but cooling requirements aren’t uniform. The Pfizer candidate for COVID-19 has to be kept at -70 degrees Celsius, 50 degrees colder than any current vaccine. That will be an issue for developing countries and for rural areas in the developed world. 
  • Dry ice is frozen carbon dioxide. What’s going to happen to the carbon dioxide supply? 
  • Dry ice can be dangerous to handle. 
  • Transportation is one thing, but what about storage? Consider what storage in California while wildfires are raging will be like. 
  • Coordination of construction and maintenance of databases that track who’s received what vaccine, where and when.  
  • Most vaccines are likely to require two doses. The whole effort must be repeated within weeks. 

Next up is the final installment of this 4-part series, where we’ll cover steps 10 through 12. 

You’re committed to rolling out an analytics platform across your supply chain and you have tons of data. So how do you turn that data into actionable information?

There is a continuum in terms of the presentation of data that allows for continuous sophistication in understanding and interpreting data. There are many ways to view data, but those that are particularly useful in supply chain analytics are reporting, score carding, dashboarding and benchmarking. Once these are embedded, deeper, more granular data analysis can be performed with the power of advanced analytics.

Reporting and Score carding

The simplest form of looking at data is the all-too-familiar reporting. Back in the day, reporting consisted of numbers printed out on green bar paper, but today’s analytical reports are far more detailed and dynamic than in the past. For instance, a modern report for a manufacturer might display all the data about transportation providers as usable information, in a scorecard format. Factors such as on-time delivery, freight cost per unit shipped, and transit time are assigned metrics and weighted averages to help users determine how well carriers are performing overall.

Dashboarding

Operations managers and executives who want a quick, daily overview of what is happening in their supply chain use dashboards to provide information in near real time to help users understand what is happening within their network. This supports them to make proactive decisions to remedy problems as they occur. Where reporting is really like looking in the rear-view mirror, dashboards are used to see what’s going on now, and make it easier for users to identify trends and exceptions, and to intervene before something goes wrong.

Dashboards can be implemented by companies to track all their real-time data and provide detailed reports of information such as claims as a percent of freight cost, space utilization, fuel efficiency, or vehicle time utilization. Essentially, the dashboard determines whether a transportation system is effective. Significant cost savings can occur when KPIs are monitored and the data is accessible in a format that allows users to make informed decisions. The biggest advantage of using dashboards to present data is the time-saving factor – dashboards give companies the advantage of allowing users to make decisions without having to wait for someone to pull and send reports.

Benchmarking

An analytics platform for the supply chain also allows for benchmarking. Comparing data on factors such as freight rates and on-time delivery percentages against peers allows companies to gain a more complete picture of their performance in the marketplace. Take freight rates, for example. Rates have fluctuated with the disrupted economy, so your job is really to assess whether a deal offered by a vendor is good or not. By benchmarking carriers against each other, you can easily see who is offering you the best deal. Consistently monitoring and making informed decisions based on data means you are fully leveraging your analytics platform.

Advanced Analytics

As you become more mature in your supply chain analytics adoption, you will be able to apply predictive and prescriptive analytics to find patterns in historical data that yield insights into future risks and opportunities in your supply chain and transportation networks. This predictive analysis capability uses real-time, data-driven insights to speed up decision-making and help create an optimized and responsive supply chain.

So as you think about rolling out an analytics platform, think in terms of the applications, not the data. Think about what reports are important and how scorecards could improve your visibility into data. Develop dashboards to give you a look ahead and use scorecards and benchmarking to make sure that you are getting the best deal from your vendors and suppliers. And work towards using advanced analytics to focus on improving your forecasting and finding trends and patterns in your data to determine, and plan for, what might happen in the future.

Take a moment to read this real-world example of how a Logility customer solved complex supply chain challenges with analytics and collaboration.

A Roadmap for Designing an Enterprise that Thrives During Supply Chain Disruptions

In part 1 of this series, we talked about the consensus among supply chain practitioners, pundits, and technology providers that minor supply and demand disruptions flare up constantly, the result of actions and reactions across complex, highly tuned, and interdependent global value chains. This has become cliché…the sneeze in Shenzhen that becomes a bad cough in Cupertino. Most companies can cope with these speed bumps, some better than others.

However, major sustained turmoil — like that caused by COVID-19 — quickly separates companies into bankruptcies, survivors, and thrivers.

As supply chain professionals, we at Logility have real-world knowledge gained from helping companies improve the consistency of supply, react to changing consumer behavior, and use analytics to deliver market-driven insights. We noticed that while thrivers are often surprised, and even harmed by major disruptions, they are resilient. They bounce back under adverse conditions. More to the point, inside their supply chains they have levers. They have easy access to accurate market data, they gather and analyze it quickly, they distill the key insights and, as a result, they enjoy options.

As Seth Godin says, “Flexibility in the face of change is where resilience comes from.”

We felt an obligation to share our observations, so in March 2020 we built a task force charged with creating an operational model and program management methodology that would take CEO-driven enterprise-wide objectives and bring them to life in a persistent, systematic roadmap. It’s 12 steps, and in part 1 we covered steps 1 through 3.

1. Assessment
2. Justification
3. Vision

Now it is time to look at steps 4 through 6, beginning with Explore.

4. Explore. When it comes to evaluating modern supply chain technologies, it’s important to be well-informed, curious, and realistic. The market is saturated with breathless assertions about the benefits of solutions based on Artificial Intelligence, Machine Learning and Predictive Analytics.

Some of those claims are true, some are more hat than cattle. Beware the hype-cycle. Remember, supply chain professionals are being asked to deliver tangible results. That’s your day job. Refer back to your Assessment — many companies have yet to create a comprehensive digital twin. That is eminently achievable with modern systems like Logility, so start there, and keep laser-focused on network visibility and the integration of planning and execution.

5. Collaborate. There are two facets to this step. The first is having an honest discussion about what it means to add a new project to everyone’s plate. Remember, this is not an IT project. It’s a business transformation project. Collaboration inside a silo is worthless, at times even harmful. We believe your innovation strategy must include a strategic partner.

It follows that, as a key partner, we need to continually refine our development and implementation disciplines to perfectly balance rapid value creation with reduced risk. This is much more than a product roadmap exercise or a debate about agile versus waterfall project management methods.

We must never let the platform interfere with your success. To borrow an analogy from manufacturing, picture a veteran machinist reviewing a CAD drawing for a new product. If you hear the machinist say, “Well, here’s another engineer that’s never set foot on the shopfloor,” then the organization failed the test for designed-for-manufacturability. Upstream failed downstream. The same principle applies to supply chain technology development and implementation.

6. Elevate Integrated Business Planning. This will remind many of you of Sales & Operations Planning. But there are new expectations in this realm, and they are focused on creating speed, trust, and resiliency. Specifically, your organization must embrace the value of a granular view of the extended enterprise. Can you analyze trends at the SKU level and drill into constraints on the shop floor? If so, then pronouncements from the War Room will be “virtually vetted,” and not the result of panic or guesswork.

Challenge yourself to think beyond the traditional Available-to-Promise metric and ask if an action meets the criterion of profitable-to-promise. You need to examine revenue, cost and margin impacts of every scenario under consideration. Some of these decisions will be automated, others will require exception-based intervention.

There you have a sketch for steps 4 through 6 in Logility’s 12-step process for building a resilient enterprise. Watch this space for steps 7 through 12. In the meantime, send us questions and comments. And for homework, spend some time thinking about this statement: “Planning is dead. Don’t waste your time telling the market what you want; instead, watch it like a hawk every day and take what it gives you.” Do you agree? Disagree? Somewhere in the middle perhaps?

Register for the first webcast of our four part series that will cover this 12-step roadmap for building a resilient enterprise. We will work our way through each step as we explore how to create a business that can respond and pivot at the pace of disruption, as well as seize opportunities presented by shifting market forces. Register here.

What does this mean for your supply chain?

On January 13, 2021 the United States Customs and Border Protection expanded the blanket Withhold Release Order (WRO) initially issued on December 2, 2020 and will detain all shipments containing cotton and cotton products originating from the Xinjiang Uyghur Autonomous Region (XUAR) and now includes tomato products. This potentially affects cotton products from countries other than China that use Chinese cotton inputs such as cotton fabric. Earlier this week Britain also announced they will tighten laws on imports linked to XUAR human rights abuses.

These announcements from both sides of the Atlantic highlight the urgency with which companies must act to ensure their products are not stopped at the border. According to the US Customs and Border Protection, the importer of record is responsible to prove its products do not contain any material, in whole or part, sourced from XUAR. If suspected and unable to show verifiable proof, the importer has three options:

1) Take the products out of the US market and export them somewhere else.

2) Destroy the merchandise.

3) Abandon the merchandise.

All three are costly, both financially and in the minds of consumers. Today’s consumers want to support brands that are ethical towards the treatment of workers and sustainable, good for the environment. Many companies tout their Corporate Social Responsibility initiatives however few can measure the impact of their supply chain beyond the first or second tier in the network. How the cotton is picked, or the yarn is spun, where the tomatoes are sourced, or silica is mined is more a matter of faith. The vast majority of companies do not have the capability to show evidence that each tier of their supply chain meets the ethical and sustainable standards they espouse, and their customers expect.

The latest developments from the United Kingdom and United States show there is strong action being taken to change the way materials are sourced. Now, it is up to supply chain leaders to ensure they can prove through a digital thread they are in compliance across every link in their complex, global supply chain.

How ready are you?

Continue Learning:

Benchmark Based on Global Survey Highlights Logility’s Leadership in Ease of Use and Driving Rapid Benefits

ATLANTA – January 14, 2020 – Logility, Inc., automating the digital transformation of supply chain optimization and advanced retail planning, is honored to be a winner of IDC’s 2020 SaaS CSAT Award for Supply Chain Management for Customer Satisfaction.

Logility scored significantly higher than its peers’ average in areas such as low total cost of ownership (TCO), user experience, high availability, industry specialization, out-of-the-box availability, and availability of training.

IDC’s customer satisfaction award program, the CSAT Awards, recognizes leading software-as-a-service (SaaS) vendors in each application market who receive the highest customer satisfaction scores based on IDC’s SaaSPath survey. SaaSPath is a global survey of approximately 2,000 organizations across all geographic regions and company sizes, where customers are asked to rate their vendor on more than 30 different customer satisfaction metrics.

“Today’s supply chains are critical to a company’s success; its ability to profitably serve customers and meet the challenges of unexpected events such as the global pandemic that has shaken every business throughout the last year,” said Fred Isenberg, EVP Customer Success, Logility. “Our relentless passion to deliver the highest level of customer service and to ensure our customers around the world can rely on the supply chain innovations we bring to the market is paramount. It is truly an honor to be named by IDC as a leader in supply chain customer satisfaction. We owe this recognition to our world-

class clients, and our dedicated employees who are focused on delivering excellent customer experiences across every interaction.”

About Logility

Accelerating the digital supply chain from product concept to customer availability, Logility helps companies seize new opportunities, sense and respond to changing market dynamics and more profitably manage their complex global businesses. The Logility® Digital Supply Chain Platform leverages an innovative blend of artificial intelligence (AI) and advanced analytics to automate planning, accelerate cycle times, increase precision, improve operating performance, break down business silos and deliver greater visibility. Logility’s SaaS-based platform transforms sales and operations planning (S&OP) and integrated business planning (IBP) processes; demand, inventory and replenishment planning; global sourcing; quality and compliance management; product life cycle management; supply and inventory optimization; manufacturing planning and scheduling; retail merchandise planning, assortment and allocation. Logility customers include Big Lots, Husqvarna Group, Parker Hannifin, Sonoco Products and Red Wing Shoe Company. Logility is a wholly owned subsidiary of American Software, Inc. (NASDAQ: AMSWA). To learn how Logility can help you make smarter decisions faster, visit www.logility.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. There are a number of factors that could cause actual results or performance to differ materially from what is anticipated by statements made herein. These factors include, but are not limited to, continuing U.S. and global economic uncertainty and the timing and degree of business recovery; the irregular pattern of the Company’s revenues; dependence on particular market segments or customers; competitive pressures; market acceptance of the Company’s products and services; technological complexity; undetected software errors; potential product liability or warranty claims; risks associated with new product development; the challenges and risks associated with integration of acquired product lines, companies and services; uncertainty about the viability and effectiveness of strategic alliances; American Software, Inc.’s ability to satisfy in a timely manner all Securities and Exchange Commission (SEC) required filings and the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted under that Section; as well as a number of other risk factors that could affect the Company’s future performance. For further information about risks the Company and American Software could experience as well as other information, please refer to American Software, Inc.’s current Form 10-K and other reports and documents subsequently filed with the SEC. For more information, contact: Kevin Liu, American Software, Inc., (626) 657-0013 or email kliu@amsoftware.com.

Logility® is a registered trademark of Logility, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.

Media Contact:

Justin Siefert
Logility
jsiefert@logility.com
404.264.5485
www.logility.com/blog

Live Event Explores How to Improve Profitability, Increase Customer Satisfaction and Free Working Capital

ATLANTA – January 12, 2021 – Logility, Inc., automating the digital transformation of supply chain optimization and advanced retail planning, invites you to the upcoming webcast: Roadmap to Overcoming Five Obstacles to Achieving Multi-Echelon Inventory Optimization. Featuring industry experts Martijn Lofvers, founder and chief trendwatcher, Supply Chain Media; Jonathan Jackman, vice president, EMEA, Logility; and Gokhan Usanmaz, product owner, innovation, Logility, this live webcast will explore how Multi-Echelon Inventory Optimization (MEIO) can help improve customer service levels while removing excess and obsolete inventory.

Today’s complex, global supply chains face many challenges from unexpected events to fluctuations in demand, and sudden shifts in supply. At the same time, supply chain teams must free working capital while delivering exceptional service. In this webcast, attendees will explore the rules of the road for achieving MEIO success including how to use a Digital Twin to navigate complex scenario analysis, optimize inventory positions to reduce working capital, and enhance service levels within financial inventory limitations.

Webcast at a Glance

Title: Roadmap to Overcoming Five Obstacles to Achieving Multi-Echelon Inventory Optimization

Speakers: Martijn Lofvers, founder and chief trendwatcher, Supply Chain Media; Jonathan Jackman, vice president, EMEA, Logility; and Gokhan Usanmaz, product owner, innovation, Logility.

When: Wednesday, January 27, 2020 at 10:00 a.m. EST / 4:00 p.m. CET

Register Today: http://bit.ly/3pvqLMW

About Logility

Accelerating the digital supply chain from product concept to customer availability, Logility helps companies seize new opportunities, sense and respond to changing market dynamics and more profitably manage their complex global businesses. The Logility® Digital Supply Chain Platform leverages an innovative blend of artificial intelligence (AI) and advanced analytics to automate planning, accelerate cycle times, increase precision, improve operating performance, break down business silos and deliver greater visibility. Logility’s SaaS-based platform transforms sales and operations planning (S&OP) and integrated business planning (IBP) processes; demand, inventory and replenishment planning; global sourcing; quality and compliance management; product life cycle management; supply and inventory optimization; manufacturing planning and scheduling; retail merchandise planning, assortment and allocation. Logility customers include Big Lots, Husqvarna Group, Parker Hannifin, Sonoco Products and Red Wing Shoe Company. Logility is a wholly owned subsidiary of American Software, Inc. (NASDAQ: AMSWA). To learn how Logility can help you make smarter decisions faster, visit www.logility.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. There are a number of factors that could cause actual results or performance to differ materially from what is anticipated by statements made herein. These factors include, but are not limited to, continuing U.S. and global economic uncertainty and the timing and degree of business recovery; the irregular pattern of the Company’s revenues; dependence on particular market segments or customers; competitive pressures; market acceptance of the Company’s products and services; technological complexity; undetected software errors; potential product liability or warranty claims; risks associated with new product development; the challenges and risks associated with integration of acquired product lines, companies and services; uncertainty about the viability and effectiveness of strategic alliances; American Software, Inc.’s ability to satisfy in a timely manner all Securities and Exchange Commission (SEC) required filings and the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted under that Section; as well as a number of other risk factors that could affect the Company’s future performance. For further information about risks the Company and American Software could experience as well as other information, please refer to American Software, Inc.’s current Form 10-K and other reports and documents subsequently filed with the SEC. For more information, contact: Kevin Liu, American Software, Inc., (626) 657-0013 or email kliu@amsoftware.com.

Logility® is a registered trademark of Logility, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.

Media Contact:
Justin Siefert
Logility
jsiefert@logility.com
404.264.5485
www.logility.com/blog

Spinning up a Digital Thread to Help Brands Achieve Supply Chain Resiliency, Compliance and Sustainability

Let’s journey back to late 2019 and early 2020. Under the umbrella of Sustainability, key players in the global fashion industry were talking about implementing lot traceability technologies, but in general the timelines were somewhat “comfortable.” There was no compelling event on the horizon. That would change.

At that point, “Sustainable” was largely a marketing term, and many fashion brands were using it haphazardly and irresponsibly. It reached the apex of the hype-cycle and consumers were naturally growing skeptical and cynical of its promotion without verification. Worried about alienating customers, many brand owners took new interest in traceability to understand the environmental impact of facilities, partners, and materials used.

The onslaught of COVID put pressure on many supply chains, including fashion. It forced the adoption and acceleration of eCommerce and spurred new ways of looking at stores as multi-purpose assets. In addition, COVID revealed the need for increased downstream fortification as sources — from growers to spinners to mills — became less reliable. The industry recognized the need for a digital thread connecting all members of the value chain, and lot traceability would be an important component.

Then came the moment of stark clarity, interestingly enough in numerical form: 406-3. (No, that’s not the score of the Georgia Tech football team’s historic victory over Cumberland College. Coach John Heisman’s Engineers eked out a victory in that game by a score of 222-0.)

The other shoe dropped in September 2020 when, by a vote of 406-3, the United States House of Representatives passed H.R. 6210 — the Uyghur Forced Labor Prevention Act. As currently drafted, the bill will block the import of any goods into the U.S. that cannot prove the merchandise is free of material and labor inputs originating in China’s Xinjiang region (XUAR).

Chinese cotton is extremely important to the fashion industry. As much as 85% of the cotton used in the industry is from the XUAR. In the US, 24% of all imports of cotton textile and apparel come from China. While the bill and related Withhold Release Orders did not go as far as banning all cotton and yarn products from China into the United States, it puts the industry on notice that cotton and other products from this region are becoming controversial due to human rights concerns. In other words, more action could come.

As the bill wound its way through House committees in the spring and summer, some apparel brands decided to hedge their bets and began to cut ties with companies that source materials from the region. In July, Patagonia said it would end sourcing from Xinjiang, and two months later, H&M Group confirmed plans to sever ties over the next year with a mill associated with a textile producer linked to Uyghur abuses.

But it was the September 22nd vote that grabbed everyone’s attention, in part because the bill imposes a guilty until proven innocent burden for importers. Complying will force the fashion industry to adopt sophisticated lot trace technologies.

Unlocking this level of verification will require a greater level of traceability than fashion is accustomed to. This is an early morning wake-up call. Most companies only deal with their Tier 1 vendors, because that’s where they have the relationship. The finished garment company sells to one of the retailers in the U.S., and that retailer has really no relationship with the fabric mill. They might have nominated that fabric, but they really have no idea where the yarns are coming from, much less even where the cotton is coming from.”

Thus, thanks to COVID and geopolitics, the industry now recognizes the growing importance of a resilient supply chain. Mapping and strengthening the supply network is one thing; but businesses now must take a more important step—completely eliminating and replacing XUAR-based fabric sources.

In the wake of these growing concerns, we launched in December 2020 a digital supply-chain traceability solution giving brand owners and retailers the tools to document the chain of custody from component origin to importer of record. With this solution, users can trace the chain of custody through all tiers in the supply chain in one digital thread while storing and managing all supporting documents related to every transaction between supply-chain trading partners.

The digital thread compiles and organizes a chronological record of importer of record back through the finished goods factory, fabric mill, yarn supplier, and cotton source. Transactions are validated at every tier using PO’s, invoices and packing lists. All these documents are rolled up to a certificate of compliance with complete chain of custody. This comprehensive genealogy is sent electronically for all shipments arriving in the US. This is what United States Customs and Border Protection will examine to determine compliance with relevant rules and regulations.

Outside of the potential legal issues arising for apparel companies, traceability will be key in meeting consumer demands. While supply chain professionals in the fashion industry knew that a sophisticated lot traceability solution would be critical for backing up sustainability claims, no one predicted that the path would include a pandemic and aggressive state-versus-state government action. Coming full circle, brands now have compliance tools that also help them prove to jaded customers that environmental and social responsibility programs are in place and supported by tangible evidence.