Managing Automation - March 2009 - (Page 40)

[TRANSFORMATION] you supply it. An integrated business plan “is the alignment of demand and supply to maximize the profitability of the business.” MEASURE THE DATA Before you can deliver on business goals, however, you need to measure the information you are collecting. Much of the forecasting and sensing relies on historical information and understanding past patterns to predict the future. This includes such questions as: Which products have been profitable? Is there an affinity between products? And, what can be done to create a more favorable situation? “We help a company determine where In the Kodak example, to place inventory and how to replenish the company uses Orainventory to meet the demand plan.” cle’s Demantra to track product demand down to — Logility’s Ron Burnette the granular level. Kodak will know how many and what type of camit’s not as easy as flipping a switch on new eras were sold by Staples, Best Buy, or Circuit software. The entire model has to change — City. And, since Circuit City is now out of busiincluding the organizational model. ness, Kodak can shift the channel. “Kodak “Even if you have the best technology, the wants to know how much demand came from biggest barriers to becoming demand-driven Circuit City and what products [were sold] are more organizational and cultural,” AMR’s because they’ll need to adjust demand around Barrett says. “Even if a company adopts techthat,” Oracle’s Bermudez says. nology due to one forward-looking person, if Demantra’s analytics engine enables a comthe organization doesn’t have the culture, pany like Kodak to do that, Bermudez says. mentality, and mind-set to think that this is Similarly, IBM’s Performance Blueprints the way it is to be done in the long term, product includes business intelligence to prothen it’s not sustainable.” ■ vide dashboards, scorecards, and analysis. But it also includes planning tools that provide managingautomation.com modeling and simulation to proactively adjust RELATED ARTICLES: to market conditions. Demand Management - Emphasizing Demand Logility, for its part, has a planning engine www.managingautomation.com/managedemand that specifically targets new product introducCaught Between Supply and Demand tions and product sunsets, because “product www.managingautomation.com/supplydemand behavior in the market won’t be the same as Mastering the Demand Tides the historical factor,” says Karin Bursa, Logilwww.managingautomation.com/progressive21 ity’s vice president of marketing, who points to the influx of green initiatives around products Cultivating Supply Chains www.managingautomation.com/cultivating and packaging as a good example of how market demands change. The S&OP Sweet Spot And therein lies the trick to all of this: facwww.managingautomation.com/sweetspot toring in the unforeseen. COMPANIES MENTIONED: ToolsGroup, a supply chain planning venIBM dor, has come out with a proprietary, scienwww.managingautomation.com/ibm tific software model that factors “uncertain Infor behavior” into the end-to-end supply chain www.managingautomation.com/infor4 plan. The tool covers, for example, lumpy Logility demand, defined as periods of time when www.managingautomation.com/logility there is no demand at all. “In the past, you could plan once a month or Oracle www.managingautomation.com/oracle3 once a week to replenish [goods] and you always had some demand,” says Joe Shamir, ToolsGroup CEO of ToolsGroup. “Today, industries must www.managingautomation.com/toolsgroup move to daily control frequencies [because] there are more periods with no demand.” To get a handle on the new market conditions, Shamir says, manufacturers need to be less interested in what is actually selling on a daily basis, and more concerned about the probability of what will be ordered that day. “Our secret sauce is our ability to take the demand and understand the probabilistic structure it has. It is a new approach that replaces the traditional approach of forecasting,” he says. Indeed, new approaches are needed to make sure product sales turn a profit. But maonline ma March 40 2009 Photo courtesy: Logility http://www.managingautomation.com http://www.managingautomation.com/managedemand http://www.managingautomation.com/supplydemand http://www.managingautomation.com/progressive21 http://www.managingautomation.com/cultivating http://www.managingautomation.com/sweetspot http://www.managingautomation.com/ibm http://www.managingautomation.com/infor4 http://www.managingautomation.com/logility http://www.managingautomation.com/oracle3 http://www.managingautomation.com/toolsgroup

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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