New breed supply chain systems support today's business models
Staff -- Manufacturing Business Technology, 8/1/2004 12:00:00 AM
Optimization engines that formed the core of most early supply chain applications must today take a back seat to Web portals and other emerging technologies.
"We're seeing a shift away from scheduled manufacturing," says Andrew Carlson, a VP with PeopleSoft. "Manufacturers don't want to see any activity in the supply chain without actual customer demand."
Typically, that demand is a sales order. And the manufacturer, despite holding minimal inventories, is expected to deliver that order on the date the customer requests.
Cyrus Hadavi, CEO of Adexa, a best-of-breed supply chain vendor, says this problem can be attacked using Web portals and automatic alerting capabilities to revamp the traditional sales & operations planning process. Portals allow looks at long-term demand forecasts and collaboration on tentative production schedules.
This new approach does not mean the end of optimization engines, but how their use is changing. F.W. Murphy, a Tulsa, Okla.-based industrial controls manufacturer, uses two small engines to produce reliable order promise dates in a matter of seconds.
One engine surveys inventory and production schedules to tell customer service reps what items are available-to-promise (ATP) by a certain date. The second looks at production capacity, supplier lead times, and other factors to determine what Murphy is capable of promising by a given date.
Bill Fister, VP logistics with Pulse,a San Diego-based electronics component manufacturer, says ATP and alert capabilities from Adexa support company customer service goals.
"We don't want a complex optimization engine," he says. "The most important thing for us is responding to customer requests for delivery dates as quickly as possible, and then meeting those dates."
