The delicate and shifting balance between planning and execution
By Kevin Parker, editorial director -- Manufacturing Business Technology, 6/1/2004 12:00:00 AM
The always-entertaining Bruce Richardson is particularly insightful when he points to a curious dichotomy in the U.S. industrial landscape. "CEOs say they see a renewed focus on growth. Yet for operations the focus remains cost cutting. It indicates a general lack of confidence in the recovery."
AMR Research's Richardson was holding the stage at the Manhattan Associates' user conference, a company he describes as the "most profitable and best run" supply chain management vendor.
i2 Technologies remains the largest pure-play supply chain vendor. Anyone who knows will tell you i2's Factory Planner is a great product. Yet in calendar-year 2003, that company's revenues fell to $495 million, and license revenue to just more than $65 million.
You might wonder whether this means supply chain planning—use of memory-based models to plan production and distribution based on multiple constraints simultaneously—is itself falling out of favor. After all, as QAD's Pam Lopker says, "What's the point of planning when you know where everything is in real time?"
Planning is not going away, as Lopker knows full well. Rather, where the line between planning and "real-time" execution is drawn shifts with time, experience, and context.
Manhattan Associates, the largest supply chain execution vendor, was launched as a warehouse management vendor, but today has capabilities in transportation, distributed order, and trading partner management, including reverse logistics and a welter of solutions that address supply chain fine points. The company is headquartered in Atlanta.
Apropos to the planning/execution discussion, as Manhattan's Executive VP Eric Peters puts it, speaking of the company's predictive applications, "Optimization lives, based on cheap computing power and a solid foundation of data that will come from RFID." But it will be "real-time planning," since in today's world, "It's only a short time before any plan is hopelessly out of date."
As one planning expert, Bristlecone's Padman Rammankuty, says, the defining characteristic of today's supply chains is that they're fragmenting, based on globalization and outsourcing. That means more transaction partners on both the sourcing and distribution side, with a company's inventory held by multiple parties.
Richardson believes regulatory compliance will be the lever driving process change, citing customs initiatives that "extend our ports into foreign countries." Between six and seven million shipping containers come into the U.S. each year, with only a small fraction being inspected. Between 20 and 30 documents are associated with each transaction.
Last word goes to a user:
Basanth Rabindra, senior programmer analyst, Waxman Consumer Group, Bedford Heights, Ohio, says, "Many of our products ship from China. During the recent strikes it was difficult to know where anything was. Many of our customers press us to do VMI and the best job possible in shipping and label accuracy. These type solutions are our future."
