Kinaxis resolution engine solves Adeptron's volatile demand problems

Ontario-based Adeptron Technologies is benefiting from high-tech manufacturers' growing reliance on outside services providers. In each of the past three years, Adeptron—with a portfolio of services that includes rapid prototyping, materials procurement, manufacturing, and order fulfillment—has enjoyed annual revenue growth of more than 25 percent.

Initially, however, the company had trouble converting all that new revenue into profits. "The new business caused an increase in the amount of materials we had to procure on the front end," says Geoff Beale, VP of operations.

That might not have been a problem if Adeptron could easily gauge customer demand. But not only can the number of orders the company receives vary widely from month to month, customers frequently change their orders within days of placing them. The number of products Adeptron builds—more than 35,000 part numbers—further complicated the job of procuring and managing materials, Beale says.

In early 2004, Adeptron took two steps that ultimately led to recording some of the highest gross profit margins in the company's history. First, it initiated an aggressive cost-reduction program, and second, it installed the RapidResponse software package from Kinaxis to support its procurement and materials management functions.

John Sicard, a Kinaxis VP, says RapidResponse is an ideal tool for companies coping with volatile demand because it "solves problems that you can't plan your way out of."

Beale says RapidResponse has improved Adeptron's ability to manage demand by making it easier to pass information through its supply chain. "The entire supply chain is online," Beale says, explaining that both customers and suppliers get vital information through RapidResponse's Web-based interface.

The interface is linked to what Sicard characterizes as the RapidResponse resolution engine, which in turn has been connected, via application programming interfaces, to Adeptron's SYSPRO ERP package. Both customers and suppliers can, in effect, peek into the SYSPRO system by logging into RapidResponse.

Customers can see the status of current orders, and then run "what-if" scenarios to see how quickly Adeptron can respond to specific changes. The scenario results are generated by the RapidResponse resolution engine, which pulls the data it needs to perform those calculations from the SYSPRO system.

If a customer places a revised order, the resolution engine feeds a new set of material requirements to SYSPRO, which then prepares a report for display in the RapidResponse supplier interface. "Our suppliers are seeing orders before our procurement people," Beale says. "The suppliers also see changes to orders in real time. That allows us to work with more blanket purchase orders, and it has cut our order cycle times 50 percent."

Beale says RapidResponse produced a rapid ROI because it was simple to install—with the initial rollout taking roughly 30 days—and proved easy to use. Customers and suppliers quickly warmed to the system, he adds, because it didn't require installing or learning any new software. They access the system by logging onto a secure Web site.

"We looked at some similar systems, but most required installing proprietary software that would have called for extensive user training," Beale says. "Our partners can send us information in any format they like—HTML, XML, or even in Excel—and the Kinaxis solution handles the translation for moving that information into and out of the SYSPRO system."

That flexibility was particularly important in dealing with customers, Beale says, "because you can't really force them to do things a certain way. This solution gives us a universal model that all of our customers can use."