Managing Automation - May 2008 - (Page 36)

[ TRANSFORMATION ] Transformation Integration TechWatch such as Logility Voyager, mySAP SCM and mySAP CRM, and Oracle’s Global Order Promising support profitable-to-promise processes. Because traditional MRP and ERP systems tend to rely on unconstrained data models, however, their ability to make such advanced ATP calculations is limited, says Ron Burnette, product director at supply chain planning provider Logility. Constraint-based models, however, add information about available production capacity to the equation and enable richer, more accurate capable- or profitable-to-promise calculations. Dale Colosky, CEO of Configuration Solutions, agrees, pointing to the fact that several ERP companies have partnered with advanced planning specialists to build out their ATP capability. Configuration Solutions uses a complex model with a product configurator at its center to analyze several factors, including the physical plant, logistics, inventory, production capacity, and costs. Despite advances in ATP and CTP products, however, the technology can only go so far toward effecting true business process change, especially when a network of trading partners is involved, says John Bermudez, senior director of SCM product strategy at Oracle, whose Global Order Promising product uses a planning engine to insert projected demand into the production schedule and runs a simulation to determine when an order request can be fulfilled. “With all the outsourcing today, companies are looking to do available-to-promise across a network of suppliers, but managingautomation.com we’re not quite there yet; there’s RELATED ARTICLES: still manual intervention involved. The Quest for the Perfect Order It’s not as far away on the techwww.managingautomation.com/perfectorder nology side, but further away on Reformulating CRM’s Value the business process supplier rewww.managingautomation.com/crmvalue lations side,” Bermudez says. Cultivating Supply Chains “Companies are always a little bit www.managingautomation.com/cultivating reluctant to open themselves up to a third party doing some type of COMPANIES MENTIONED: automated inquiry against what Configuration Solutions they’re able to provide.” www.managingautomation.com/configuration Making sure you have good, Consona high-quality data to share with www.managingautomation.com/consona par tners can help break down Infor these barriers, Logility’s Burnette www.managingautomation.com/infor4 says. So can using products i2 Technologies known as order hubs, available www.managingautomation.com/i2 from a variety of enterprise and Logility supply chain application vendors, www.managingautomation.com/logility including Sterling Commerce, i2, Oracle Epicor, SAP, and Oracle. The hubs www.managingautomation.com/oracle3 help par tners track an order Industries throughout the entire manufacturing process, says Ray Wang, an analyst at Forrester Research. “The heart of order management is all about where the order is. When I place an order, it may be for more than one item, it may come from multiple warehouses, it may ship to different areas, it may be in different configurations, and availability to promise is that last piece of delivering on the promise of a perfect order,” he says. What’s really changed between the late 1990s “Companies are looking to do available-to-promise across a network of suppliers, but we’re not there yet.” — Oracle’s Bermudez and today is the realization by many manufacturers that ATP is at the tail end of a long set of processes, says Anand Iyer, fellow at supply chain management software vendor i2 Technologies. “ATP is not really about promising orders, but about setting up everything else that comes before so you can make those promises,” he says. It’s a matter of operational alignment between a company’s business policies and its forecasting and supply chain execution processes. “Once those things are in place, ATP becomes relatively easy,” Iyer says. Of course, the level of risk and the amount of supply network complexity vary by company and vertical industry. But, experts say, all companies would do well to change their thinking about balancing cost and customer service levels. The answer, says Rory Granros, director of industr y and product marketing for Infor’s Process Industries group, is to take a proactive approach to risk, using available- and profitableto-promise technology to triangulate demand and supply with customer service and to rethink expectations. “Depending on the industry, it might be OK to set customer service levels at 70%, 80%, or 90%, because of demand fluctuations. It’s about balancing customer service with inventory and investment” to optimize profitability, Granros says. The profitability component starts with your replenishment plan, and creating it with a profit objective in mind, Burnette says, so that information on which items, orders, and customers are most profitable at a given point can be fed back to the customer service staff as they make delivery commitments. “The real trick is that, if companies manage their capacity right, they can take market share from competitors,” Configuration Solutions’ Colosky says. “But it comes down to a mind-set change.” I maonline ma May 36 2008 Photo courtesy: Oracle http://managingautomation.com http://www.managingautomation.com/perfectorder http://www.managingautomation.com/crmvalue http://www.managingautomation.com/cultivating http://www.managingautomation.com/configuration http://www.managingautomation.com/consona http://www.managingautomation.com/infor4 http://www.managingautomation.com/i2 http://www.managingautomation.com/logility http://www.managingautomation.com/oracle3

Table of Contents Feed for the Digital Edition of Managing Automation - May 2008

Managing Automation - May 2008 Contents Take 1 Award-Winning Shoe-Maker Otabo Alters Course, Shifts Production to China IBM Partners with Universities for Cloud Computing Getting Noise in Production Under Control Incuity Embarks on a Vertical Market Strategy Foundation Intensifies OPC Standard Testing Mailbox Notes PM Roundtable Cover Story: The Business of Going Green Special Report: Night and Day Delivering on Promises Finding the Right Fit for Wireless Driving RFID Product Scan Advertiser Index Next

Managing Automation - May 2008

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