Archive for the ‘Products’ Category

IndustryWeek is reporting on new findings from AMR on the projected growth in supply chain software in 2008.

Planned Application Upgrades or Adoption for 2008 (Process vs. Discrete)
Source: AMR Research

As a vendor of supply chain software, this is certainly good news.  It’s also consistent with the momentum we are seeing.  I noted the interest in sales and operations planning (S&OP).  As I’ve written in the past (see here), we are definitely seeing strong interest here - but not as you might expect.  Companies are certainly focused on improving the planning process itself, but the greatest interest is in what happens when the planning meeting ends.

The volatility that companies face is increasingly making it hard to live up to the commitments made during these meetings.  The emphasis is on the “O” in S&OP, on the operational implications.  How do you execute day in and day out in the midst of constant change in a way that is consistent with the companies objectives?

Supply chain visibility, another area of investment, is certainly one piece of the puzzle - it’s the foundation of being able to address some of these challenges.  But, it’s never enough.  Visibility can tell you a problem, but visibility alone can’t help you actually solve the problem in most cases.  What front-line decision makers need are tools for collective risk tradeoff and to deliver a profitable response.

I believe we will increasingly see companies invest in solutions that empower people to make faster and better decisions.  In a static world, planning and execution are the priorities.  In a dynamic world, empowering people to respond to change becomes the new priority.

In case you didn’t see, we formally introduced a new on-demand service today called RapidResponse for Demand Management (you can see the press release here and learn about the product here).  This is very exciting for us on a couple of fronts.

For years we’ve gained success selling our Response Management solutions into the manufaturing/supply chain (the “supply-side”) groups within manufacturers.  These groups struggle with daily changes in demand, supply and product inside the sales and operations planning horizon and have to be able to alter supply plans to profitably respond to these changes.  Our users typically end up being planners, schedulers, materials managers, outsourcing managers, etc.

For some time now, we’ve been getting “pull” from the demand management/fulfillment (the “demand-side”) groups within these companies.  They too are struggling with volatile demand and supply.  In their case, they own demand and are struggling to sense true demand quick enough and see an increasing need to collaborate with their customers around demand.  Likewise, they are responsible for allocating finished goods inventory to ensure that the right products are in the right place at the right time.  What we’ve continued to hear is that demand managers, customer service reps and sales operations staff are struggling.  They lack the needed visibility and exception notification systems to understand what the current state of demand and supply is across an increasingly distributed fulfillment network, and they lack the tools to collaborate with their customers on demand and internally with colleagues to resolve problems.

Enter RapidResponse for Demand Management.  We’ve designed this solution with these user communities in mind.  This new service empowers them to sense demand more quickly, to shape demand and to more profitably respond to demand and supply changes to drive greater levels of customer satisfaction and revenue for the company.  They get an integrated view of demand and finished goods inventory so they can quickly spot misalignments and then leverage tools to determine the most profitable response.

And, when combined with our existing RapidResponse for Manufacturing into an integrated on-demand service, you’re able to see from end-to-end, from customer demand all the way down through component supplies in an outsourced supply chain.  Each group is individually empowered to solve problems within their domain of influence, but can now uniquely collaborate amongst the groups to find the best response to changing conditions.

Our on-demand RapidResponse service supports another key trend I continue to see, and that’s an increasing emphasis on the sales and operations planning (S&OP) process.  Interestingly, while we certainly see a focus on improving the planning process, the more urgent need is at an operational level.  Companies are struggling with how they deliver to the metrics and plans agreed upon in the S&OP meeting given how many things are constantly changing.  Response Management solutions like RapidResponse are designed to empower front-line decision makers with tools for risk tradeoff and response to daily changes inside the sales and operations planning horizon.  This is critical since more and more companies are operating in an environment when many of the assumptions taken into the planning process are proven wrong as soon as you complete that process.

Supplychainer.com has a new post talking about supply chain solutions offered as on-demand (software-as-a-service) services.  The ultimate conclusion is that the market will mature for such solutions, but the prediction is it will take about 10 years.  I’m much more bullish than that based on what we see for our on-demand service.  My comment to the blog post below.

** My comment **

Our Response Management solution - which empowers people to respond to supply chain changes - is delivered as an on-demand service today.

We sell to large manufacturers across a variety of verticals.  We’re seeing extremely strong interest in on-demand as companies continue to outsource much of their IT infrastructure.

Very importantly, our on-demand service provides exactly the same full functionality as our prior on-premises offering.  It is not a first generation solution with limited capabilities - so we don’t encounter that obstacle.

You are correct in that some people are initially concerned about data - but when they stop and think about how much data is already outside their walls because of the pervasive outsourcing they’ve done, they get much more comfortable with an on-demand service.  In fact, a huge value that we provide is the ability to actually regain visibility into that outsourced data because that is critical to enabling effective response to change.

I don’t disagree that some vendors will take a different approach to offering an on-demand service and run into issues - but it doesn’t have to be that way.

I think the market will be “mature” much sooner than 10 years, I think we’re at the early stages of a very strong demand that will become mainstream inside of 5 years.

Market leaders are increasing moving from standard timing to as needed, exception-based processes. Scenario modeling capabilities empower front-line decision makers and executives to make decisions when the business requires it. Scenario modeling provides these decision makers with insights into alternate opportunities as they balance risk and reward. Leaders confront risk and opportunity with shorter cycle times between event, collective insight and action.

To achieve this, companies need to arm decision-makers with a holistic and single version of the truth and the collaborative, scenario modeling tools necessary to evaluate situations, propose and detail action alternatives and then score them against corporate metrics to ensure actions are aligned with objectives. With the pace of change accelerating, there are more unexpected events than ever that are both high in business complexity and risk. These decisions require rapid and accurate human judgment - facilitated by scenario modeling driven from real operational data.

Many systems claim to support scenario modeling but suffer from a couple of critical deficiencies in supporting the needs of companies to rapidly respond to change. First, most scenario modeling capabilities are complex, programmed optimization engines that work on a sophisticated and rigid set of assumptions at a given point in time. The end result is a “black box” output with no insight into why the answer is what it is. This is ok if the answer is right, but creates lots of problems when the answer that comes back isn’t good enough. In addition, these systems are usable by a limited number of highly trained operators and lack any collaborative capabilities where multiple people contribute to an action.

Second, most scenario modeling systems operate on a model of the supply chain, not on real supply chain data. As such, they lack to relevance, timeliness and accuracy required to drive rapid action. To drive a profitable demand response you must be able to quickly balance demand and supply and be able to model various situations and understand their impact on this balance. Without real data to drive the simulation and with so many things changing, you have no ability to get the needed insight and determine the right course of action.

Scenario modeling, or simulations, are increasing in importance to companies as they seek ways to increase their ability to balance risk and opportunity. But to really drive the needed outcomes, the scenario modeling capabilities need to come with the required functionality.

We’re pleased to announce RapidResponse 9 today (see press release here). There are some very exciting innovations here that will really accelerate how quickly and accurate companies can respond to the ever-present changes in demand, supply and product that are impacting their businesses. Also, there’s an interview I did here at EMSNow that provides a bit of additional background on the release.

There’s a post over at supplychainer.com discussing the merits of simulation. The following in particular caught my eye: “In an environment which is uncertain, the winners are the ones who can better execute in the case of unexpected events. Simulation can be a great skill in such cases.”

Couldn’t agree more. The right tool that empowers people with information and tools (including simulations) is the key to responding to change and unexpected events. People need to quickly collaborate and try out various scenarios to understand what’s possible and what would be the impact of their actions. There’s a growing number of such events where the complexity and risk to the business are such that human judgment, supported by simulation tools, is the key to rapid and accurate response.

Dan Gilmore has written an article at Supply Chain Digest comparing the merits of supply chain optimization versus simulation.

In my mind, they are simply two approaches suited for two different problems. Years ago the focus of all supply chains was efficiency and trying to run things like clockwork. Process automation and removing people from the process were key objectives. Today, managing volatility and change is critical to success, so the more urgent need has become how to respond, and that requires human judgment. So, where optimization can be used when assumptions are known and stable, simulation that supports human judgment is required when there is frequent change requiring rapid scenario analysis to determine the right course corrections to make.

Steve Hochman of AMR Research just published a paper entitled “Response Management: Next Wave in Supply Chain Innovation?” talking precisely about this issue (get the paper here). In the paper, Steve says “Our research shows conventional technology hasn’t met the need. Consider the following:

Advanced planning–Automated algorithms are tailor made for low-value-intensity, high-complexity decisions. But collective judgment becomes an essential complement in context-rich decisions (for example, will this irate customer defect if I don’t pay $500,000 in expediting costs?).

Spreadsheets–Standalone spreadsheets are pervasive precisely because of the limitations of closed-loop planning. The problem, of course, is that spreadsheet flexibility quickly devolves into multiple versions of the truth.

Business intelligence (BI)–As with spreadsheets, BI dashboards put decision control back in the hands of people. But BI tools are structured for insight, not execution. In the face of difficult real-time tradeoffs, yesterday’s snapshot of read-only analytics leaves a wide gap between awareness and confident action.

In environments where decisions are high in risk and complexity, many find they need systems for collective risk tradeoff and response. Whether the risk takes the form of a forecast spike, a component approaching obsolescence, a sales order shortfall, or more strategic sales and operations planning (S&OP) or network commitments, discrete manufacturing clients increasingly place a premium on the ability to see, study, and simulate alternate resolutions before pulling the decision trigger on a major tradeoff.”

So, I don’t think it’s an either/or situation, both have their place - although I would argue the more urgent need today is for staff empowerment to deal with the unexpected, and simulation is a core tool to accomplish this.

You no doubt saw all the announcements coming out of Sapphire last week. SAP had a series of announcements related to it’s growing ecosystem based on NetWeaver. I recently attended an Enterprise Partner Summit that SAP held in San Francisco where they impressively laid out their plans for partners including a clear roadmap of how to work with the company.

I have to say that I’ve been impressed with what I’ve seen. It’s clear that they are very serious about building an ecosystem. The enterprise application space is in the midst of a major transformation with the major players (SAP, Oracle, IBM and Microsoft) all vying for ownership of the new platform and the creation of a new class of applications based on web services integrated on these platforms. It’s an exciting time. It offers customers the opportunity to gain total cost of ownership (TCO) advantages through tighter application integration while realizing greater application flexibility.

I expect to see the major players continue to excel at core capabilities while providers like Kinaxis offer unique value add that complements their offerings. This is why we’re actively engaged with an supporting SAP’s NetWeaver environment through certified solutions that add value to the SAP solutions.

It will be interesting to watch this unfold over the next couple of years, but it looks like SAP is doing a lot of things right.

According to a new report by Merrill Lynch, on-demand and service oriented architectures (SOA) will reshape the enterprise applications market. In the report, detailed here in this IndustryWeek article, Merrill Lynch says “the percentage of IT budgets allocated toward software on an average is estimated to increase from 30% this year to 35% in 2008, driven in part by software on demand and Web services.”

Merrill Lynch goes on to say that applications must be designed for the masses. We agree and believe Response Management, by its very nature, is an application for the masses. It is used today by hundreds and thousands of users in many organizations. This is just another reason we chose to embrace on-demand and Web Services technologies to further the adoption of Response Management capabilities by the masses. Doing so enables Response Management to support initiatives like lean manufacturing, demand management, supply chain agility, supply chain collaboration and supply chain visibility–which all help organizations become more responsive to change.

Today, we announced a new on-demand RapidResponse service. As we talk to prospects in the marketplace, we continue to enjoy great success with business users who see tremendous value in Response Management capabilities. We also announced that we’re partnering with IBM Global Services to provide the secure, high-availability hosting environment.

By making RapidResponse an on-demand service, we provide customers several significant benefits:

• Lower Total Cost of Ownership and No Capital Investment
• Global Access, Any Time, Anywhere
• Rapid Time-to-Value
• World Class Security and Availability

Many of the leading analysts have done research showing the strong interest in on-demand solutions. Why? Because IT organizations continue to look for ways to outsource operations and reduce their overall costs, and on-demand provides such an avenue. It offers companies the opportunity to solve critical business problems without taking on additional software applications that require setup, ongoing management, upgrade management, etc. All of this is included in the service.