There are two important business problems associated with today's manufacturing planning, materials planning, and supply chain environments:
1. Supply chain planning (SCP) applications need to address the lack of accurate logistics costs and service information that would enable more optimized decisions across the entire supply chain. SCP typically generates weekly or daily plans (in a better case scenario), but without adequately addressing the issues that arise almost every instant in dynamic logistics environments. Thus, plans are often invalid as soon as they have been made, while a mere re-planning does not answer the question of what went wrong in the first place (i.e., there is no facility to learn from prior plans' inadequacies).
2. Supply chain execution (SCE) applications need to further address the lack of real time inventory visibility and event management feedback information needed for SCP to respond to frequent supply chain changes when building and executing manufacturing and materials plans.
Much has been said lately about the SCE market thriving and its SCP counterpart being one of the worst performing enterprise applications segments during the still ongoing economic downturn. While core back-office ERP and possibly even more cumbersome SCP systems might have traditionally excelled at planning, conceptual optimization, and financial integration functions, they have not however, addressed warehousing, yard management, distribution network planning, or transportation/logistics management. Yet, increasingly, every user company's success is contingent upon its ability to make almost immediate finished product or service delivery to customers. Additionally, data inaccuracy and inconsistency problems, complex planning algorithms/models requiring sophisticated user skills, lack of easy integration to other applications, and plan timeliness have all contributed to traditional SCP products' steep fall from their early grace.
The demand for near real time supply chain collaboration will, in turn, place an increasing emphasis on any company's ability to immediately commit itself to promising orders' delivery dates on a global basis and to consistently meet those commitments ever after. This available-to-promise (ATP)/capable-to-promise (CTP) aptitude will be made more complex as companies rely on an increasing number of business partners and suppliers to procure raw materials, assemble, and deliver finished goods. SCE is therefore gaining increasing awareness among companies that realize that planning can do only so much without the ability to make the right and timely decisions and execute on the shop floor, in the warehouses, or within the entire distribution chain.
However, it would be too na�ve to dismiss the need for proper planning, because regardless of how responsive an SCE system may be, waiting for chaos to happen and only then trying to act would be equally disastrous, as it has been with compiling nearly ideal plans (through cumbersome algorithms) and never doing anything about executing them or obtaining feedback about their outcomes. Companies need real time information from execution systems to develop and adjust optimal plans, while the execution side should benefit from more realistic plans for the sake of readiness, rather than to merely react after the fact in a firefighting fashion. We believe that planning and execution will become more or less inseparable in a trend that will see SCP, SCE, supply chain event management (SCEM), manufacturing execution system (MES), and analytics/enterprise performance management (EPM) (i.e., decision support tools and multidimensional analysis on information aggregated from all levels of the commerce chain, and an extensive sets of predefined performance indicators, as well as strategic planning/forecasting and balanced scorecard functions) coming together into an adaptive system.
Leading SCE vendors will thus continue to mmove beyond their current SCE functionality to more collaborative and optimized holistic supply chain management (SCM) solutions, which will include more consistent functionality at all levels of the organization, including collaborative planning, forecasting, replenishment (CPFR), order management/customer relationship management (CRM), warehouse/yard/transportation management, integrated business intelligence (BI) and performance measurement, as well as industry-specific functions. Vendors lacking the technical expertise for the development of integration and business process management (BPM) platforms, and analytical planning engines will find it necessary to preferably OEM-embed or just loosely partner for this functionality.
1. Supply chain planning (SCP) applications need to address the lack of accurate logistics costs and service information that would enable more optimized decisions across the entire supply chain. SCP typically generates weekly or daily plans (in a better case scenario), but without adequately addressing the issues that arise almost every instant in dynamic logistics environments. Thus, plans are often invalid as soon as they have been made, while a mere re-planning does not answer the question of what went wrong in the first place (i.e., there is no facility to learn from prior plans' inadequacies).
2. Supply chain execution (SCE) applications need to further address the lack of real time inventory visibility and event management feedback information needed for SCP to respond to frequent supply chain changes when building and executing manufacturing and materials plans.
Much has been said lately about the SCE market thriving and its SCP counterpart being one of the worst performing enterprise applications segments during the still ongoing economic downturn. While core back-office ERP and possibly even more cumbersome SCP systems might have traditionally excelled at planning, conceptual optimization, and financial integration functions, they have not however, addressed warehousing, yard management, distribution network planning, or transportation/logistics management. Yet, increasingly, every user company's success is contingent upon its ability to make almost immediate finished product or service delivery to customers. Additionally, data inaccuracy and inconsistency problems, complex planning algorithms/models requiring sophisticated user skills, lack of easy integration to other applications, and plan timeliness have all contributed to traditional SCP products' steep fall from their early grace.
The demand for near real time supply chain collaboration will, in turn, place an increasing emphasis on any company's ability to immediately commit itself to promising orders' delivery dates on a global basis and to consistently meet those commitments ever after. This available-to-promise (ATP)/capable-to-promise (CTP) aptitude will be made more complex as companies rely on an increasing number of business partners and suppliers to procure raw materials, assemble, and deliver finished goods. SCE is therefore gaining increasing awareness among companies that realize that planning can do only so much without the ability to make the right and timely decisions and execute on the shop floor, in the warehouses, or within the entire distribution chain.
However, it would be too na�ve to dismiss the need for proper planning, because regardless of how responsive an SCE system may be, waiting for chaos to happen and only then trying to act would be equally disastrous, as it has been with compiling nearly ideal plans (through cumbersome algorithms) and never doing anything about executing them or obtaining feedback about their outcomes. Companies need real time information from execution systems to develop and adjust optimal plans, while the execution side should benefit from more realistic plans for the sake of readiness, rather than to merely react after the fact in a firefighting fashion. We believe that planning and execution will become more or less inseparable in a trend that will see SCP, SCE, supply chain event management (SCEM), manufacturing execution system (MES), and analytics/enterprise performance management (EPM) (i.e., decision support tools and multidimensional analysis on information aggregated from all levels of the commerce chain, and an extensive sets of predefined performance indicators, as well as strategic planning/forecasting and balanced scorecard functions) coming together into an adaptive system.
Leading SCE vendors will thus continue to mmove beyond their current SCE functionality to more collaborative and optimized holistic supply chain management (SCM) solutions, which will include more consistent functionality at all levels of the organization, including collaborative planning, forecasting, replenishment (CPFR), order management/customer relationship management (CRM), warehouse/yard/transportation management, integrated business intelligence (BI) and performance measurement, as well as industry-specific functions. Vendors lacking the technical expertise for the development of integration and business process management (BPM) platforms, and analytical planning engines will find it necessary to preferably OEM-embed or just loosely partner for this functionality.
No comments:
Post a Comment