November 1998 | Commentary | Supply Chain Technology

ERO Enhances Supply Chain Software

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As Enterprise Resource Planning (ERP) expands out into the supply chain, its reach, and many of its functions, takes on a different set of characteristics. These characteristics include increased access to information, greater efficiency among various enterprise functions, and a better handle on easier implementing, better planning, and optimal producing.

PeopleSoft, Pleasanton, Calif., refers to this enhanced ERP as Enterprise Resource Optimization (ERO). The company has incorporated supply chain planning and optimization into the core of its software product.

"Our supply chain management software is enterprise-driven; it is designed from a corporate-level planning perspective across the enterprise, as opposed to an operational or tactical perspective," says Douglas Miller, product market manager for supply chain solutions at PeopleSoft. "To support this concept, the solution is fully integrated with what we call the enterprise foundation. It includes our financial solutions - accounting and control, project and treasury management - as well as human resource management. It complements the detailed production management software.

"PeopleSoft also tries to provide the most intelligent level of supply chain management. It focuses on particular areas, and has integrated advanced planning and scheduling. Remember, PeopleSoft's acquisition of Red Pepper is the basis for the advanced planning and scheduling product.

"What we call Enterprise Planning is a relatively sophisticated level of distribution planning capability within an enterprise environment," says Miller. "This does not cover everything. For instance, we don't do detailed transportation management or planning. We have partnerships with vendors that provide that service.

"PeopleSoft's focus is clearly at the enterprise level, not the tactical level. It deals with companies that are managing complex materials distribution across multiple locations. "We have integrated production planning, and we can source production and purchasing from a material and a capacity restraint standpoint," Miller says.

"One of the other aspects of intelligent supply chain management PeopleSoft provides is a collaborative approach to demand planning," he adds. "We focus on high-tech and consumer package goods - products with large volumes, a short life cycle, and a high degree of obsolescence. It is one thing to say that a company's objective is to reduce inventory across its whole supply chain. But the extent to which it is going to do that depends on the types of products moving through that chain.

"Products such as computer peripherals, with all their choices, present a challenge to distribution, planning, forecasting, demand planning, and the supply chain as a whole.

"Our product configurator software fits into a configure-to-order environment," says Miller. "It's a different world from engineer-to-order, which is project oriented. We have three real differentiators: integrated APS, integrated configuration management, and integrated demand-planning solutions. We have just introduced our enterprise performance management product, which combines financial and operational data to analyze business process profitability."

"With this software, we can instantaneously gauge our profitability by product, customer, channel or geography on an ongoing basis," says beta customer Robert Jackson, CFO of American Century. "The impact on our ability to react to changing market conditions will give us a competitive advantage."

"From the standpoint of intelligent supply chain management, these analytical tools also complement PeopleSoft's enterprise-driven strategy," Miller adds. "These tools are geared to the strategic management level rather than the functional expertise level.

"In sales and logistics, PeopleSoft offers a group of products including order management, remote order entry, order promising, inventory management, and billing and receivables. "When we talk distribution, we concentrate on the order-to-cash cycle and procure-to-pay cycle. We have user-defined business rules to enable automated decision-making throughout these business processes.

"For more information on PeopleSoft, e-mail peoplesoft@inboundlogistics.com

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