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Planning & Forecasting
Just the Facts on Supply Chain Planning Optimization, Please
There has been a trend to embed sophisticated optimization logic into advanced planning and scheduling (APS) suites to improve decisions of supply chain planners. If used successfully, this type of optimization promises to drastically improve a company's supply chain performance in a variety of areas:
• Reduced supply chain costs
• Improved product margins
• Lower inventories
• Increased manufacturing throughput
• Better return on assets
This potential for improvement is generating a great deal of interest in supply chain optimization. Many established and startup APS vendors are now using the concept as a selling point, and in some cases, as a key marketing differentiator. While optimization methods have been around since post World War II--with the advent of operations research and management sciences--there has been only a marginal interest in applying these concepts to supply chain planning. Will companies embrace these newer versions of optimization technology? The answer is yes. What company would not want to optimize its supply chain? These solutions, however, are expensive. Do all buyers really understand how to apply these solutions and what they are getting for their money? Is optimization worth the cost? Does it really work?
http://www.e-optimization.com/
i2 Helps ON Enhance Risk Management Planning Capability
i2 Technologies Inc., Dallas, says that ON Semiconductor has completed implementation of i2 New-Generation Supply Chain Planning for risk management. As part of this project, ON implemented solutions and workflows from i2 that leverage the Agile Business Process Platform which is the company's service-oriented architecture designed to allow for more flexibility and usability of its new-generation solution set. This solution contributes to ON's risk management approach for capacity decision making capabilities as it competes in the asset-intensive semiconductor industry.
The i2 Agile Business Process Platform is designed to perform core platform services to compose, model and execute business process workflows or business logic. New-generation planning is enabled by the i2 Agile Business Process Platform, which features roles-based user interface customization, business process configuration capabilities and extensive supply chain management data models and related data processes. Structured supply chain data modeling workflows, planning parameter maintenance and supply chain data management are also part of the benefits, according to i2.
ON already leverages a wide-range of i2 solutions for enabling key supply chain processes. Expanding its footprint with this recent implementation enables the company to simulate multiple what-if scenarios to assess the impact of available capacity across its wafer fabrication process, assembly and test operations. The solution helps provide insights into potential capacity substitutes that can help improve profitability and potential capacity gaps that need to be closed proactively. Leveraging the i2 Agile Business Process Platform, ON was able to customize its user interface and specific workflow capabilities for a more tailored solution offering.
Leveraging i2 New-Generation Planning for systematic risk management, ON evaluates multiple supply chain scenarios per week for enhanced capacity planning capabilities. The company evaluates potential risks and bottlenecks and is able to make informed decisions on capacity configuration. By creating rules-based automated scenarios and multiple scenarios in parallel, the company is more in tune with supply chain disruptions and how to overcome those issues. The implementation also provides analytics capabilities for decision support. i2 New-Generation Planning provides the ability to compare multiple scenarios and visually determine developing trends. The ability to run these scenarios and compare them against each other provides the company with the decision support tools necessary to mitigate capacity risk.
http://www.i2.com
NetSuite Says New Release Increases Forecasting Ability
NetSuite Inc., San Mateo, Calif., describes the “breakthrough capabilities” of PRM+ in its products include partner commissions and collaborative order management for increased forecast visibility and seamless direct and channel customer relationship management. NetSuite says the latest generation of the partner relationship management (PRM) product allows partners to enter new orders directly via their self-service portal or easily convert opportunities into quotes and orders with access to real-time inventory availability, giving the vendor organization complete and accurate visibility for sales forecasting, and minimizing any potential channel conflict regarding who is credited for the sale.
The PRM+ release brings the integration of PRM and CRM together with the back-office transactional system critical to seamless partner management and partner business processes. Customer-facing CRM and PRM processes extend through the back office for seamless sales management and order fulfillment, inventory availability, returns processing, and partner incentive compensation management.
"NetSuite is on a mission to correct the misguided course of customer relationship management that other CRM vendors have charted and too many companies have followed--they've built and sold PRM as a silo separate from core CRM and back-office operations," says Zach Nelson, CEO of NetSuite.
He says vendor companies that extend NetSuite PRM+ to their partners get greater visibility into partner pipelines and forecasts because the opportunities and orders are managed directly in the same system. They eliminate redundant day-to-day partner support as partners can now access much of what they need to know simply by logging into the system.
http://www.netsuite.com
Version 7 of SmartForecasts Planning Tool Available
Demand forecasting, planning, and inventory optimization solutions provider Smart Software, Belmont, Mass., is shipping Version 7 of its flagship product, SmartForecasts. The developer says the latest version includes powerful new conversion capabilities, as well as embedded parameter tools for further automating the forecasting process by reducing the number of repetitive planning tasks. These new features “help ensure more accurate forecasting and inventory planning results during every forecasting session, and enable better cross-functional use of these results among corporate departments,” according to Smart Software.
SmartForecasts 7 includes a new set of powerful conversion capabilities that enables users to dynamically switch between forecasts in units and dollars, or any other defined set of measures and conversion factors. These features are designed to significantly enhance the S&OP process by increasing planning flexibility and allowing more effective collaboration to take place between departments. For example, one department can forecast in its preferred measure--such as units, and compare their forecasts to those of another department that forecasts in a different measure--such as dollars.
In addition, SmartForecasts 7 greatly speeds up the forecasting process, especially when there are many thousands of items that need to be forecasted on a regular basis. The software employs a new, automated set of "Forecast and Selection Parameters" tools that reduce forecasting tasks previously taking hours to complete, to just a few minutes. With these tools, users can pre-specify and embed parameter values (such as varying lead times and service levels) for thousands of individual product items to be used each time forecasts are generated. This capability increases consistency and accuracy by ensuring that the same set of SKU-specific parameters will be applied from one forecasting session to the next.
The Forecast and Selection Parameters, as well as conversion capabilities, are available for both database and file-based systems. These new features expand SmartForecasts' overall utility making it easier for organizations to manage the S&OP and inventory planning processes.
http://www.smartcorp.com
Management Dynamics Helps Hallmark Protect Demand Plan
Hallmark Cards Inc. has implemented the Supply Chain Visibility and Event Management solution from Management Dynamics for its transportation and logistics operations. Hallmark is leveraging the global, multi-mode visibility solution to streamline purchase orders, inbound inventory, order fulfillment and trading partner performance.
Hallmark selected Management Dynamics' solution to establish a complete end-to-end source of order and shipment information to help manage its inbound supply chain. With multiple trading partners involved in each shipment and long lead-times from its manufacturing base in Asia, Hallmark's logistics team needed better tools to pinpoint in-transit delays and resolve issues before they impacted the demand plan. Now Hallmark can share critical order, shipment and inventory information with employees in purchasing, warehousing and inventory planning groups. With the system's scorecarding functionality, the Hallmark logistics team can measure and analyze the performance of vendors and service providers.
“We needed one secure central location for tracking and analyzing inbound shipments across our partner network,” says Cathy Burrow, international transportation and customs manager for Hallmark Cards. “Management Dynamics delivered with a complete end-to-end solution supported by an established track record of customer implementations and carrier partnerships. We now have the ability to spend more time on strategic initiatives, such as managing our carriers' performance, and proactively identifying bottlenecks in our domestic and international supply chain before they impact the bottom line.”
http://www.ManagementDynamics.com
Supply Chain Contingency Planning: 12 Tips for Weathering the Storm
The last year or so has not been easy for importers and exporters, thanks to rising fuel costs and an intense hurricane season that included some of the most damaging storms ever. What can importers and exporters do to prepare for natural disasters and other factors beyond their control?
The global trade management experts at JPMorgan Chase Vastera offer the following tips for planning ahead and maintaining your supply chain in tough times.
1. Assess risk: In deciding where to buy product, where to manufacture, where to locate distribution centers and which ports to use, consider the following risk items:
• Political risks and labor unions
• Physical and geographic risks, including weather and logistics/utilities infrastructure
• Economic and market risks, including fuel prices, currency and inflation
Running different scenarios of best case, average case and worst case gets your organization thinking about handling normal variability and disasters.
2. Communicate: Establish a team that will be responsible for making decisions during a crisis, and communicate it throughout the supply chain. When communication channels break down, people often act and react on their own, thinking that they are doing the right thing, when in fact it may hurt the overall plan.
3. Give yourself options: Establish and maintain relationships with alternative suppliers and logistics networks. Use multiple carriers, ports and modes of transport. Giving yourself a choice enables you to control costs and service levels in normal times, and builds flexibility in emergencies or times of high demand.
4. Testing: Demand disaster plans from your suppliers and logistics providers, then review and update these plans on a regular basis. Test the alternatives they provide. By conducting an audit, you can evaluate their level of preparedness.
5. Documentation: Make detailed processes and authorizations readily available for the alternate brokers you use in the event of an emergency.
6. Current events: Following your initial risk assessment, be sure to monitor each country or region for threats and trends that can impact your supply chain, including: weather, strikes, fuel prices, currency exchange, inflation, labor rates, pending legislation ( e.g., trade sanctions, quotas, duties, free trade programs) and political elections that may alter the country's view of trade.
7. Know your products: Understand how demand for your products will be affected by an emergency. For example, before Hurricane Charley, Home Depot and Lowe's each created a war room to monitor the storm. By doing so, they were able to supply specific stores with plywood, generators, water and medical supplies before the storm hit.
8. Assess demand: Develop a flexible supply chain that can handle large fluctuations in demand. If your products are needed in case of an emergency, make sure your supply chain has the capacity to keep up. If demand drops, make sure the pipeline can be slowed down to avoid a build up of inventory.
9. Cross-training: Develop a cross-trained workforce that can react quickly. If part of your supply chain is affected directly by a disaster, you'll need people who can keep operations running as best as possible.
10. Be prepared: For example, Florida ports are subject to hurricanes from June to November. For products destined to Latin America and the Caribbean that gateway out of Florida, carriers, distributors and exporters should identify alternate gateways with established rates and frequencies. Perishables or other time-sensitive goods may need to avoid South Florida ports through the more hectic hurricane season months of August, September and October.
11. Save time: Avoid port congestion by using customs facilities that enable you to obtain and finalize clearances at a location other than the port of entry.
12. Back up your files: Ensure that all trade-related documents--especially those you need to maintain for five or more years--are backed up and saved in electronic format at an off-site location. If all records are lost at your primary site, they should be easy to obtain from a backup site.
http://www.jpmorganchase.com/vastera
Aberdeen: Most Retailers Use BI Technology to Improve Planning
According to a new Aberdeen Group research report, 58 percent of retailers are using business intelligence (BI) technology, including advanced analytics, to improve merchandising processes such as advanced planning and replenishment. In addition, over two thirds of retailers that use business intelligence for merchandising indicated that senior executives, including the CEO, are actively engaged in its use within their organization.
The Business Intelligence in Retail Merchandising: Harnessing Advanced Data Management Intelligence in Retail report finds that the need for better operational efficiency and improved customer response time are driving retailers to budget new business intelligence programs or upgrade existing internal data management processes. Improved store performance is also a critical factor on the minds of retailers as they evaluate new business intelligence processes.
In the report, retailers explicitly stated that there is great potential to using business intelligence in merchandising. However, the report also uncovers that less than half of all retailers surveyed believe their data is not reliable enough for analysis. The big challenge for retailers is getting their internal data management processes in order.
Other key findings: Only 11 percent of retailers are looking at business intelligence data on a near-real-time basis, and 32 percent of retailers still use spreadsheets to manage their business intelligence data, despite recognizing that they are extremely inefficient.
http://www.aberdeen.com
Manhattan Associates Signs Two More Planning Solutions Clients
Manhattan Associates, Atlanta, will deploy its Integrated Planning Solutions for The Orvis Company, a retailer of high-end sports equipment, apparel, home furnishings and gifts. The company selected Manhattan Associates' advanced planning and replenishment solutions to support its multi-channel supply chain and help optimize its inventory investments.
"We know that, to achieve this vision, Orvis must deliver a very high quality customer experience--with products arriving where and when our customers choose to engage us," says Mark Holmes, vice president of information services at Orvis. "Receiving a new fly rod the day after fishing season opens isn't good enough. We must deliver operational excellence to sustain our high standards, even as our business model becomes more complex."
Since its days as a pioneer of mail order, Orvis' business model has changed dramatically to that of an international, multi-channel retailer, supporting global customers through U.S. and UK retail stores, Web sites, catalogs and a network of more than 500 dealerships worldwide. The company's need for a multi-channel approach to supply chain management became clear when its strategic commitment to retail expansion and rapidly growing online sales began to be constrained by its legacy processes and systems.
"Our IT philosophy is to adopt industry leading best-practices by partnering with a small number of solution providers that can deliver and continuously advance the capabilities of our business," says Holmes. "Manhattan Associates offers a partnership that will allow us to re-engineer our supply chain processes from planning and forecasting to inventory and warehouse management to deliver to our customers around the world."
In a separate development, Manhattan Associates reports that announced that sit-up channels, whose portfolio of screen commerce channels includes bid tv, price-drop tv, speed auction tv and Screenshop, also has implemented Integrated Planning Solutions. sit-up channels will use Manhattan Associates' Financial and Item Planning solutions, components of its advanced planning solution, to service all of the company's commerce channels, which are available through digital satellite, digital terrestrial and cable TV as well as the Web and which have a collective customer base of more than 2.6 million people.
The Financial and Item Planning solutions will allow sit-up channels to automate planning processes, react to consumer buying trends and compare forecasts with actual buying habits across all of its retail channels. The solutions cover three distinct functions: strategic, corporate-level planning; weekly stock, storage and intake monitoring; and product line planning. With between 12,000 and 15,000 product lines, accurate planning and forecasting at the product level has become essential to ensure that performance is monitored uniformly.
http://www.manh.com
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