Managing Automation - September 2007 - (Page 56)

[ TRANSFORMATION ] Transformation TechWatch Integration Industries tionships among the various players so that they do the right thing for the whole, Najmi adds. The answer is to synchronize manufacturers, contractors, component suppliers, distribution operations, and point-of-sale activities. “It’s about setting targets, getting visibility, and detecting events such as impending stock-outs,” Najmi says. “It’s also about: How do I look at what’s happening in the chain on a daily or hourly basis, and then decide how to realign inventories and expedite or delay shipments?” TECHNOLOGY CHOICES To increase the accuracy of demand forecasting and meet inventory optimization goals, manufacturers can choose from a variety of software tools, including technologies from large enterprise application vendors, such as Oracle and SAP, as well as point solution providers, such as i2, ClearOrbit, E2Open, and ToolsGroup. To bring manufacturers together with contractors, suppliers, and others involved in managing inventories, many products take advantage of portals — secure Web sites that let suppliers easily review purchase orders, accept or negotiate dates and quantities, track shipments, and monitor demand. Portals can promote various levels of inventory collaboration, taking into account each supplier’s volume and importance. A standard portal configuration lets supply chain participants jointly plan activities using shared MRP data. “You’re not only sharing demanagingautomation.com mand levels of what you need and when you need it, but also the RELATED ARTICLES: components that go into that prodBoeing’s Big Supply Chain Wager www.managingautomation.com/boeing uct,” Howells says. “You have visibility at the component level of the E2open: Supply Chain Management AVOIDING THE MULTI-TIERED SURPRISE products that are going into the www.managingautomation.com/e2open1 manufacturing process. So the outReporter’s Notebook: Contending with sourced manufacturer is involved China’s Supply Chain Challenges in the production process.” www.managingautomation.com/china In some cases, manufacturers Mastering the Demand Tides can use portals to track compowww.managingautomation.com/progressive21 nents that they have purchased and arranged to have shipped diCOMPANIES MENTIONED: rectly to contractors. The next i2Technologies version of SAP’s Inventory Colwww.managingautomation.com/i2 laboration Hub por tal will be Oracle renamed the Supplier Network www.managingautomation.com/Oracle3 Collaboration Hub to emphasize SAP these wider supplier insights for www.managingautomation.com/SAP3 multi-tier networks, Howells says. ToolsGroup Similarly, rival applications venwww.managingautomation.com/ToolsGroup dor Oracle offers a suite of sup- ply chain applications that includes portals and lets manufacturers work with partners to develop supply-side and demand-side forecasts. The shared forecasts can use customer point-of-sale data, as well as causal factors, such as weather conditions and economic trends, says Jon Chorley, vice president of supply chain management at Oracle. “A trend we are seeing is increased reliance on point-of-sale data, the reason being rapid product obsolescence,” Chorley says. “[Companies] have a very limited window to sell products at maximum prices. So even if you don’t have a contractual obligation to cover the inventory at [the] retail store, for example, very often you end up having a practical responsibility to do that. You have to give credits; you have to give discounts. So understanding how your product is flowing all through the supply chain is very important.” “A trend we are seeing is increased reliance on point-of-sale data, the reason being product obsolescence,” says Jon Chorley of Oracle. Portals have another efficiency advantage: They are relatively cheap and easy for supply chain partners to use. An Internet connection and Web browser are really all that suppliers and contractors need to connect with manufacturers. Even small suppliers and contractors supply critical components, “so you need to be able to work within their level of competence as well,” says Warren Sumner, vice president of marketing and products for ClearOrbit, a supply chain applications vendor. “We see companies that have outsourced part of their production and have critical long-lead items that particular suppliers provide,” Sumner says. “They watch those [products] very carefully.” Another point solution vendor, ToolsGroup, pulls transaction data from ERP backbones and feeds it into planning tools that help optimize inventories. “We focus on the demand signal as well as supplier variability,” CEO Joe Shamir says. “This allows companies to calculate optimal inventory levels based on service-level agreements.” Although an SLA may call for inventories to be maintained at an aggregate level of 99%, inventory optimization tools can help companies decide on a mix that keeps fast-moving items at the highest percentages and slow-moving products at much lower levels to better absorb the variability created by real-world conditions, Shamir adds. Armed with the right tools and processes, manufacturers will be able to take much of the inventory risk out of operating in a multi-tier, outsourced environment. ■ maonline ma September 56 2007 http://managingautomation.com http://www.managingautomation.com/boeing http://www.managingautomation.com/e2open1 http://www.managingautomation.com/china http://www.managingautomation.com/progressive21 http://www.managingautomation.com/i2 http://www.managingautomation.com/Oracle3 http://www.managingautomation.com/SAP3 http://www.managingautomation.com/ToolsGroup

Table of Contents Feed for the Digital Edition of Managing Automation - September 2007

Contents Take 1 Europe’s Automation Chiefs Upbeat on ’08 Business Prospects Vendor Coalition Pushes Human Element of SOA Wireless: Users Still Approaching with Caution One Year Later, IBM Shows Plan for MRO’s Maximo Study: More Work Needed to Lure Next-Gen Talent Executive Q&A Notes Cover Story: 2008 Companies to Watch Special Report: The 2007 Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Operational Excellence Mastery Leadership Mastery Transformation: Orchestrating the Multi-Tier Supply Network Integration: The Timeless Quest for Accurate Data Industries: Maintenance No Longer on Schedule Product Scan Advertiser Index Next

Managing Automation - September 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.