Composable Enterprise: the next revolution in Supply Chain?

How a digital platform can unlock business change and innovation

Enterprises cannot afford to not undergo (or at least plan) major change. Rising customer expectations, brought by the growth of online commerce, the rise of sustainability issues, as well as the increased digitization of traditional business models, require organization flexibility.

The COVID-19 crisis, as well as the recent geopolitical and energetic situation, has also highlighted the need for resilience and agility: companies must be adaptive and cohesive, in the face of unforeseen supply chain challenges, risks and disruptions.

The pressure is on for enterprises to scale their business and quickly deliver innovation, to keep up in an increasingly customer-centric and volatile market.

To be resilient and flexible, business leaders are aiming to build structural agility in the supply chain, putting aside bulky traditional systems and complexity, and favoring connected, digitally enabled and predictive networks across the extended value chain instead [McKinsey].

This is where composable enterprise, a term coined by Gartner to address this emerging requirement, comes into play.

What is the composable enterprise?

Composable Enterprise is defined as a new approach to microservices design, that embraces the API economy and agile concepts, that delivers new business models through the assembly of packaged business capabilities, called PBCs. [Gartner]
Essentially the composable enterprise leverages composable, lego-like infrastructures, such as software-as-a-service (SaaS) platforms. They are architectures split into smaller building blocks, encapsulated, containerized software components, exposed through APIs and event channels, that create a comprehensive library of microservices and accelerators, which can be composed to create new packaged business capabilities [MIT Technology Reviews].

PBCs are ready-to-use business services, tailored to the end-client, that can stand on its own— which can be also monetized and brought to market, creating new, innovative business models through what is known as a “capabilities economy”.

Composable enterprise: what are the benefits?

This is where the future of software is heading: digital platforms are evolving from being a collection of ready-made applications to modular libraries of business capabilities and accelerators, to deliver the agility, resilience and innovation needed to quickly respond to new demand or supply chain challenges. Which are the benefits?

The ability to remain agile and deploy new products at a competitive pace, is nowadays crucial for any company; agile methodologies and fusion teams seem the way to go to organize work to be done speedily and effectively.

A fusion team is “a multidisciplinary team that blends technology or analytics and business domain expertise and shares accountability for business and technology outcomes”. Fusion teams are typically organized by cross-cutting business capabilities or business outcomes they need to support. [Gartner]

Multidisciplinary teams cut deployment times (by removing interdepartmental checking processes and middle management), and they allow the rapid implementation of new business capabilities, because they do not need to rework applications in a monolithic approach.

Furthermore a modular, microservices-architecture allows for large and small changes to be done quickly across a common architecture: exposed API offered by PBCs are utilized by fusion teams to combine components quickly, to solve any unpredicted business issue or emergency effectively.

In a market space filled with countless products and alternatives, businesses must put customers at the center to remain competitive: it's the customer experience, where convenience, personalization and flexibility are key, that truly gives value to the final customer.

However traditional “one size fits all” business models fail to support these customer expectations. Businesses must shift to a platform-enabled, customer-centric model, where they don’t adapt to changing customer demand, but they decide the level of service that sets the standard for their competitors.

Composable enterprises enables what KPMG calls the “micro supply chain model”: operations are segmented in different business streams, optimized to serve a specific market segment or customer, without impacting how the organization serves other segments [KPMG].

The focus shifts from a Project-Centric Approach to a Continuous Product-Centric Delivery [Gartner]; the goal is to build a product that enables customization, without changing it all the time and for the single customer, by assembling already available PBCs to adapt to the customers peculiar business scenario and project requirements.

This way an organization can better tackle complexity and costs, react faster to changes and ultimately differentiate themselves in the market by offering an optimized customer experience.

The agility and customer experience required by the market require new capabilities and tools. Agile operations make extensive use of smart automation and advanced technologies such as robots, AGVs, drones (and many more) in both production and logistics settings.

The drive for agility also requires companies to reassess and adapt to demand fast; this is possible by leveraging analytics and visibility tools, to quickly identify pain points and opportunities across the end-to-end supply chain.

Integrating new tools and capabilities in a company ecosystem can be challenging: different systems and technologies often come together in a mishmash of applications. However microservices and APIs make it easier to integrate technologies as well as orchestrate processes in the company ecosystem, as well as to implement customizations for business needs as the changes can be modularized, well-tested and well-maintained.

Better integration open the field to third parties, make deployments more manageable and reduce risk; most importantly, they unlock the possibility of innovation, where different functionalities, technologies and enablers come together in new cutting-edge solutions, improved interfaces, and a seamless experience of integration to customers.

Traditionally IT expenses have fallen under the umbrella of capital expenses (or CapEx); those costs are usually paid in bulk by companies to acquire, and own its physical assets and software. With the advent of cloud computing and the ‘as a Service’ model, many organizations have shifted to the OpEx model, where expenses are recurrent costs, usually paid through a subscription model.

In the capability economy model, payments are componentized, meaning that companies pay for smaller components, enabling them to pay for what they really use and need. While CapEX and OpEX models can result in losses and hidden costs, due to upfront expensive and sometimes badly planned investments, a real “pay as you go” model, maximizes profitability and scalability and enable flexibility in expenses.

LEA REPLY: towards the Composable Enterprise

Our mission here at Reply is to help our customers solve complex (but common) problems in their business and stay competitive against industry giants. The market moves at a fast pace and the name of the game is speed and agility: in delivery, in reacting to changes in demand, in designing and developing new IT solutions, in adopting new technologies.

We make this possible thanks to LEA Reply.
LEA Reply™ is our proprietary, cloud native, microservices-based digital platform, that fully embraces the composable enterprise model. Offering a flexible, technology-driven, end-to-end logistics platform made of composable services that provides the capabilities needed to satisfy new customer requirements quickly, as well as facilitate collaboration with external partners.

LEA Reply Platform provides a portfolio of ready-to-use services, that can be packaged together, integrated with other services or field technologies, software or ERPs, to execute any supply chain operation. These services, that we can call packaged business capabilities (PBCs), are either assembled in our “standard solutions”, such as our LEA Reply™ WMS and the other solutions in our LEA Suite, or create new, out-of-the-box propositions to the market.

We build a shared vision with our customers and partner with them in their SC transformation journey, by offering our ready-to-use business capabilities to create new, personalized end-to-end solutions, tailored to their specific, differentiating processes.

For example, we partner with Fabric, a tech company specialising in automated micro-fulfillment for ecommerce distribution in the retail space, to enable a whole new end-to-end solution for warehouse automation. Thanks to LEA Reply, that leverages APIs and integrates with the customer’s software environment at the single-service level, we guarantee the flexibility, agility and scalability of their model, necessary for fast, flexible and efficient fulfillment and deliveries.

Enterprises should look for modular, integrative, and extensible technology platforms that can grow with them into the future. Our LEA platform does just that, leveraging accelerators and tools to bring to market connected, effective and usable solutions, and making delivery easier and more autonomous, by lowering the technical complexity and encouraging collaboration.

We enable our customers to react fast to any disruption, challenge and market requirement and seek opportunities to deliver unique, innovative, valuable services to their final customers.

Partner with us to create a smart, adaptive and resilient supply chain for your business and build together the future supply chain.
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    Logistics Reply combines tech and process knowledge and through its ability to adapt processes to technology with a strong customer focus approach is able to partner with you you in your Digital Transformation Journey.

    LEA Reply is the latest evolution of logistics software: a digital platform for supply chain execution. It offers ready-to-use business services able to support extended processes and to quickly create brand-new end-to-end solutions.

    Leveraging the services offered by our SaaS Digital platform, we help you achieve your goals and improve your digital supply chain with guaranteed results, while keeping safe your differentiating processes.

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