Managing Automation - March 2009 - (Page 25)

ness Objects process monitoring capabilities, the tool can monitor transactions taking place in SAP’s trade management, ERP, supply chain execution, or other systems, and issue alerts when a KRI has been exceeded. The tool can then present mitigation alternatives. Similarly, Cognos, a unit of IBM, is combining its BI software with the event management capabilities in IBM’s WebSphere products to enable tools that can monitor KPIs such as those defined by the Supply Chain Operations Reference (SCOR) Model. Sterling Commerce, a provider of on-demand value-added network collaboration services for supply chain partners, offers BI and monitoring tools that alert manufacturers when defined KPI thresholds are reached. Manhattan Associates, a provider of warehouse management and supply chain execution software, also offers event management, which provides alerts if, for example, shipments fail to clear customs on time. “You may have suppliers who are having issues with the [advance ship notice] or settlement process, and there is risk associated with that,” says Richard Douglas, Sterling’s global industry executive for manufacturing logistics. “You want to know in real time when that starts happening.” Vendors such as Manhattan Associates and SmartTurn Inc. also offer supply chain visibility tools so that manufacturers can keep an eye on things like inventory levels and collaborate with suppliers to mitigate problems. RISK/REWARD Technology vendors are providing manufacturers with simulation and optimization tools that can be used to reduce risk levels inherent in supply chain design and execution decisions. Kinaxis’ RapidResponse, for example, is an on-demand supply chain monitoring tool that gives manufacturers and their suppliers visibility into supply chain events. But manufacturers can also use the tool to model supply chain behavior and perform what-if analysis before making decisions meant to solve problems or mitigate risks. The RapidResponse tool, says Kinaxis Executive Vice President John Sicard, is able to save information about previous supply chain states and analyze the impact of previous decisions on pre-defined KPIs. Using that kind of historical information, the tool allows manufacturers facing similar decisions to analyze the likely impacts of different choices. Last summer, Sicard says, a Kinaxis customer used RapidResponse’s what-if analysis to quickly decide how to react when the Chinese government told the company it had to shut down production during the Olympics. The manufacturer, after evaluating five different response scenarios, quickly determined how best to satisfy demand in light of cost, transportation, and other constraints. Software vendor ILOG — recently acquired by IBM — offers supply network modeling and design tools that let manufacturers calculate the risks and other trade-offs involved in decisions such as where to locate plants and distribution centers. The tool, LogicNet Plus, can be used first to model existing supply networks, including details such as transportation and manufacturing costs and current forecast demand. Manufacturers can then use the tool to perform what-if analysis, balancing cost, risk, and benefits. These days, many manufacturers use ILOG’s tools to make decisions about whether to consolidate offshore plants and to compare the potential savings with the risk of compromising customer service, says David Simchi-Levi, chief scientist at ILOG and a professor of engineering systems at MIT. In his own research at MIT, Simchi-Levi has used the LogicNet Plus tool to study the most effective strategies for cutting supply chain costs while also reducing risk. By far, he says, the most effective strategy is to build flexibility into supply networks by, for example, enabling plants to produce multiple product lines and pursuing dual sourcing and other forms of supply network redundancy. “Considering the supply chain risk they face, manufacturers today cannot decide they are not going to have flexibility built into their supply chains,” Simchi-Levi says. “In the recent past, some have moved in the direction of single sourcing, dedicated plants, and no inventory. But, when disruptions hit, they are not able to meet demand.” Many vendors of BI, sourcing, warehouse management, and other applications software offer tools that manufacturers can use to continuously rate suppliers and quickly spot those that may be poised for problems. In addition to supply chain execution applications, for example, Manhattan Associates offers a supplier portal and BI tools that scan the transaction system for things like supplier fill rates, on-time performance, and non-compliance charge-backs. The BI tools calculate the costs of such problems and, using the portal, manufacturers can present individual suppliers with their scorecards. On-demand business-to-business valueadded-network provider GXS Inc. is moving in 25 March 2009

Table of Contents Feed for the Digital Edition of Managing Automation - March 2009

Managing Automation - March 2009 Contents Take 1 Sober Outlook, Cost-Cutting Techniques Dominate at Automation Conference Sale Canceled, i2 Searches for Its Focus Accenture Unveils a Service for the Factory Floor Solar Is Bright Spot for MES Player Eyelit Other Industries Outspent Auto on Robots in 2008 Integrators to Play a Bigger Role at ILS Technology Notes Deep Dive Supply Chains Reader Poll Technology Directions Expert Q&A User Resources Special Report Transformation Product Scan Advertiser Index Next

Managing Automation - March 2009

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