Supply chain house signals market hotspots
Published:15-July-2009
By Kevin White
Flags cross-functional business and retail chain synchronisation
Analyst house AMR Research has predicted a 6% decline in the demand for supply chain management software applications and services in 2009.
The market will be worth around $6 billion this year and is still expected to experience healthy growth during the next five years, with i2 Technologies earmarking synchronised sales and operations management and branded retail channel management software as future hot spots in the enterprise supply chain landscape.
“Software support for sales and operations management provides for cross-functional synchronisation across the business domains of finance, sales and marketing, production and logistics,” i2 VP Razat Gaurav explained. The idea is to build a single plan and one version of the truth that eliminates silos.
With i2’s software he said companies can pinpoint problems, drill down for root-cause analysis and run through a rapid evaluation of multiple plan scenarios. The end game is to drive profitable decisions related to the balance of demand and supply.
“Demands are changing all the time and the rate of change is fast, especially in today’s economy, so it’s crucial that any change to the plan can be propagated accurately across all functional silos,” Gaurav told us.
“Our systems help support decisions about sourcing, about inventory allocation or financial cash flows using up to date models of real-world constraints.”
Telecom equipment supplier Adtran has claimed improvements in the way it manages customer specific engineered parts as a result of deploying i2’s S&O tools. It has enabled Adtran to reduce inventory, view spreadsheets in a more timely manner, monitor safety stock more efficiently and improve service levels.
In the area of channel management, Gaurav said that i2 would be concentrating on developing its retail software to improve the quality of the interchange that exists between a retailer and a branded goods manufacturer.
“In terms of understanding demand volatility, the focus for branded manufacturers has been on the sell-in to the retailer, rather than at the level of the sell-through to the consumer. Stuffing unnecessary inventory into the channel only creates price erosion and reduces revenues. We believe that point-of-sale data needs drive the rest of the supply chain, and shape the replenishment strategy.”
By taking point-of-sale data and using that to forecast demand at the store level and at the distribution level, Gaurav said i2’s software will allow retailers and their branded goods manufacturer suppliers to reach consensus on their forecasts. “We describe that as a move towards shelf-centred collaboration for channel management.”
He said that the company can support the move with on-premise software, on-demand delivered as a software service, or as a managed service.
The company already operates managed services for retailers, in which it takes a company’s latest point-of-sale data and has its teams in India working with i2’s analytics software mine insights which feed daily or weekly reports back to the retailer.
The aim is to provide views that helps a retailer refine the decisions that are being made about inventory deployment at store and distribution levels, he explained.
