RedPrairie Corp. looks through its clients to see its future. Customers drive the high-end research and development at the Waukesha-based supply chain solutions provider, according to John Jazwiec, company leader of RedPrairie. RedPrairie’s research and development division creates solutions for the efficiency issues that large companies face in their warehouse and distribution process. Nearly every solution that is developed is versatile across industries and can be scaled down for a smaller company, Jazwiec said.
"We never sought out opportunities by studying the macro market, but built the company by working with large corporations," Jazwiec said. "We listen well, partner and build a solution and go from there. They push us in the right direction."
Because of that process, RedPrairie is easily able to see trends emerging in the supply chain solutions market and identify what is working and what isn’t.
A perfect example of RedPrairie’s responsiveness to its customers is the company’s ongong adventures with radio frequency identification (RFID) technology and applications.
RedPrairie is a world leader in the RFID field, where inventory can be tracked through a radio frequency transmitter. RFID was widely deemed the future of supply chain management technology when Wal-Mart Stores Inc. mandated in 2004 that its top 100 suppliers place RFID tags on all cases and pallets by January 2005.
At that time, RedPrairie was already providing solutions for supply chains involving RFID and also offered products that would be compliant to any retailer mandate.
"RFID made sense for us," Jazwiec said. "Most inventory management relates to using a bar code system and is about putting inventory in some place where people are guaranteed to remember where they put it. With RFID, businesses can put their inventories anywhere they want and instantly be able to locate it."
However, it was RedPrairie’s customers that showed the company that RFID was not going to take off as quickly as predicted by industry experts.
Currently, the cost per tag of RFID does not make economic sense for a company to pay for having a tag on every item or every box, Jazwiec said.
Instead, RedPrairie has seen RFID become very valuable to manufacturers that have mobile devices or expensive assets, he said.
"The market has been gradual," Jazwiec said. "In the next three to five years, as the cost per unit goes down, there will be exponential growth."
Jazwiec is bullish about 2006.
"I have a tremendous confidence in the economy," he said. "From a historical point of view, we continue to have low core inflation, low real interest rates and rising productivity."
RedPrairie grew both its top and bottom lines by 25 percent in 2005 and its team of 700 employees (with a presence on every continent) is starting the year off with a backlog of committed work.
To compete in a global market, RedPrairie established locations to both accommodate global clients and expand its own presence. RedPrairie has deployed its applications in just about every language, Jazwiec said.
"There is a lot of momentum in Europe," Jazwiec said. "I expect a great deal of transactions (from Europe in 2006)."
RedPrairie was bought out last April by Franciscan Partners, a Menlo Park, Calif.-based technology-focused private equity funds group, for $250 million. RedPrairie is in the process of acquiring two other companies and will complete the purchases before the end of the first quarter, Jazwiec said. He declined to disclose further information about the acquisitions.
"Our biggest obstacle is the software application industry," Jazwiec said. "We continue to offer value while others over-promise and under-deliver."
Five trends Jazwiec sees in 2006 through the eyes of RedPrairie and its clients include: growing retailer focus on lowering inventory costs by streamlining the supply chain from the manufacturer to the store; an increased interest from the automotive supply chain to adapt software productivity systems; a renewed focus on managing transportation costs due to rising fuel costs; a continued gradual pick-up in the interest of deploying RFID in supply chain solutions; and rising business focus on the return on investment of software.
RedPrairie plans to be in the middle of each one of those trends, working with clients to create and implement solutions.
RedPrairie’s own goals will be to maintain customer satisfaction and to continue on the steady upward growth path it experienced last year, Jazwiec said.
"I think we have reached a level of maturity in the applications market where we won’t see 100 percent growth but mostly grow at the 10 percent growth rate," Jazwiec said. "Our challenge is to continue to grow the rate we have continued to."
RedPrairie’s progressive nature, combined with its 30 years of experience in technology solutions and its global presence, enables the company to have the potential to work with just about every major manufacturer in the world.
"The distrust of the corporate software buyer continues to remind us why we are successful," Jazwiec said.
Half of the top 30 U.S. consumer goods companies use RedPrairie technology to optimize their supply chains, according to Consumer Goods Technology magazine.
"For 30-plus years, we have maintained relationships with the largest companies in the world," Jazwiec said. "Historically, we listen and that allows us to find emerging opportunities."
RedPrairie Corp.
Number of Employees: 700
Owned by: Franciscan Partners, Menlo Park, Calif.
CEO: John Jazwiec
Web page: www.redprairie.com
Corporate headquarters: 20700 Swenson Drive, Waukesha
Jazwiec Predictions
- Growing retailer focus on lowering inventory costs by streamlining the supply chain from the manufacturer to the store.
- An increased interest from the automotive supply chain to adapt software productivity systems.
- A renewed focus on managing transportation costs due to rising fuel costs.
- A continued gradual pick-up in the interest of deploying radio frequency identification (RFID) in supply chain solutions.
- Rising business focus on the return on investment of software.
