Supply Chain Planning

Supply Chain Planning

The ability to synchronize supply to demand is a tough nut to crack which is why SAP took home top honors in this year’s supply chain planning category. Built on the SAP NetWeaver platform, mySAP Supply Chain Management is a beefy concoction that includes not only planning and execution modules, but also visibility, collaboration, and RFID. With big-time firms, like Kimberly-Clark, already up-and-running with SAP Auto-ID Infrastructure to handle its enterprise-wide EPC information, 2006 should be another good year for SAP. At the No. 2 slot, Manugistics is certainly no slouch, as the readers of CGT are finding supply chain planning solace in the company’s bevy of offerings including the ability to custom-build Advance Planning and Scheduling capabilities. Readers’ Choice regulars Oracle and Logility bolster core capabilities while nabbing big customer wins. In 2005, Klaussner Furniture selected Logility’s Voyager Inventory Planning to maximize the information communicated from Demand Planning. Prescient and newcomer John Galt are also closing big customer wins. Ranir, a private-label manufacturer of consumer oral care products, selected Prescient solutions earlier this year in an effort to streamline its supply chain and better collaborate with retail trading partners. John Galt Solutions has recently won over numerous customers for its Atlas Planning Suite and now has about 7,000 customers. The company claims to have grown its customer base by 100 percent in six of the past seven years. Inventive supply chain players like John Galt will continue to find success in 2006 so long as new offerings are created to span collaborative forecasting, demand planning, sales and operations planning and inventory management.

Breakout Winners

Customer Experience
As the DDSN kicks into overdrive, SCP vendors that build a better mousetrap will thrive.“The particular benefit of the Manugistics solution was its advanced planning and distribution functionality, along with its built-in flexibility. This allowed us to meet the needs of many different types of Avon market in one implementation...,” says Sue Morton, project director, European Supply Chain Initiative for Avon.

Small/midsize business
A deciding IT factor for many mid-sized firms is the ability of a tool to support their competitive strategy. "Having a system in place like mySAP SCM will enable us to better manage out inventory, eventually at a customer-specific level," says Bob Rzasa, systems and programming manager and SAP Advanced Planning and Optimization project manager. "This is going to give us a leg up on the compteitors in the years going forward, provided we take advantage of this tool now."

Demand Meets Supply
Historical data will soon be
eclipsed by real-time data, as Supply Chain Planning (SCP) becomes demand-driven, rather than supply-driven. Real-time data will drive demand-planning accuracy, improve manufacturing efficiencies and reduce obsolete product in the supply chain.

According to AMR Research, the top four areas of Supply Chain Management (SCM) investment for 2006 will be demand management, supply visibility, RFID and Sales and Operations Planning (S&OP). “The best companies do more than just cut costs — they create markets,” according to the AMR Research ‘Supply Chain Top 25 for 2005’ report. The report ranks manufacturers and retailers that are pioneering the rollout of a new model of supply chain — which AMR calls the Demand-Driven Supply Network (DDSN). According to the report, exemplary leaders include Dell, Procter & Gamble (P&G), IBM and Nokia. According to other sources, P&G is the overall leader, with its demand-driven supply chain driving competitors to invest to survive. Unilever’s Global Data Synchronization (GDS) success also puts it ahead of the curve; so does Nike’s SCP and forecasting being integrated to manufacturing and to retail.

\ The advantages of DDSN come at a cost, however. It can only work with massive amounts of IT investment, and requires massive amounts of information and constant back-and-forth with customers and partners, according to the report. Benefits include improved communication, visibility and decision-making across the three areas of demand, supply and product.

“Key demand insights include POS data from retailers, and consumer-level demographics,” explains Kara Romanow, research director, consumer products, AMR Research. “Intelligence is needed on top of the data. Best-of-breed vendors have a leg up now.” Romanow sees supply chain visibility and event management, demand planning, data warehousing and visibility, S&OP and RFID as major trends into 2006.

Andrew White, research director, supply chain management, Gartner, sees optimization, collaboration and GDS as the major 2005 SCP trends. “In 2006, the major business drivers — agility, margin, customer service, out-of-stocks — will stay the same. Optimization (which was hot before the Internet bubble happened) will return now, along with more real-time planning driving better planning decisions in execution systems like WMS and transportation. S&OP will return to being a hot topic.”