Managing Automation - March 2009 - (Page 38)

[TRANSFORMATION] were flying off the shelves. It looked like a “The technologies today are good,” says success, but Kodak started running low on Jane Barrett, a research director at AMR. cameras. And, the chipsets it used in the camToo often, however, one business leader ineras needed to be ordered several months in vests in an application to solve a specific advance. Suddenly, sales were at a standstill. problem associated with one business area. “They found that they didn’t have their sales Manufacturers need to adopt corporate-wide and marketing promotion strategy aligned with standards around the demand management the production plan,” says John Bermudez, strategy in order to make it a sustainable senior director of planning product strategy process that is entrenched within the culat Oracle Corp., who worked with Kodak to enture of the company, she says. sure that it didn’t repeat this problem. STRATEGIC OBJECTIVE Using Oracle’s Demantra demand management software, Kodak now can track sales What does that mean? Basically, demand manat a granular level and shift marketing tactics agement is becoming a strategic corporate to pull back on products that “sell themselves” objective that requires aligning demand with while focusing on areas that require more the business plan to create profitable revpromotion — such as a more expensive camenue. It’s not a new concept, but it has beera — in order to move it off the shelf. This come more important due to the complexity process is what experts With demand management, “managecall demand shaping, and it is one of the most ment has the extra dimension of manipuimportant aspects of a lating demand for the benefit of the holistic demand management strategy. company.” — Oracle’s John Bermudez Like Kodak, many manufacturers realize they need to align supof the supply chain, the weak economy, and ply and demand better. And, in some cases, global market dynamics, experts say. they need to create demand in order to match “It’s a tough market out there right now,” existing supply. That could mean promoting a says Paul Hoy, IBM’s director of global manuproduct in a two-for-one sale because there facturing industries. “People are fighting for is excess inventor y or creating incentives market share, customer retention, and new around products that are not moving. Combusiness, and there is a slowdown throughpanies use technology tools such as demand out the value chain as the consumer slows forecasting, sales and operations planning down spending.” (S&OP), and supply chain management. But What manufacturers need to do, Hoy says, all of those tools fall into the broader category is take advantage of the existing demand — called demand management, which, according the things that are already in the pipeline to industry experts, is a multi-faceted process. or have been forecasted — and work with “Demand management is the superset,” customers to ensure that specific demands Bermudez says. “It is different from planning are met. But this can’t be approached uniand forecasting because management has the laterally with a focus only on the end point, extra dimension of manipulating demand for or customer. the benefit of the company.” “To understand demand and do it effecAccording to AMR Research, while foretively, you have to be looking at the end-tocasting and planning are important spokes end supply chain,” Hoy says. From there, in the demand management wheel, manufacmanufacturers can shape demand and use turers should be concentrating on demand it to directly drive operations. sensing, demand shaping, and profitable reThat may require rethinking the way the sponse tactics to gain the visibility and control business is run and breaking down invisirequired to manipulate downstream demand ble walls between functional areas and de(see sidebar, p. 39). And while technology in partments. It also means a new mind-set for the form of applications like Demantra from the person in charge of demand manageOracle and software from Infor, IBM, Logility, ment strategies. and others, is important, it is only 10% of the “It requires a simple shift in attitude from demand management equation. Fifty percent the demand manager as he or she [has to of a demand management strategy relates diunderstand] that it’s not just their job to imrectly to collaboration within the organizaprove the overall accuracy of demand; it’s tion and with the supply chain, and 40% is also their job to manage it, change it, and maabout managing the process. nipulate it so that the demand they are reMarch ma 38 2009 Photo courtesy: Oracle Corp.

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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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