January 2003 | Commentary | Supply Chain Technology

Where the Supply Chain Meets the Value Chain

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By taking a different approach to the way we look at certain objects and processes, we gain the benefit of objectivity. A similar method holds true when looking at the supply chain.

It is the nature of systems, especially complex ones such as in the supply chain, to evolve and change. Part of the pressure on this evolution has been the movement of ERP companies into supply chain management.

ERP providers and their solutions have generally entertained a financial bias or perspective. It's little wonder then that ERP pressure has led companies to reexamine the very nature of their supply chains, both as a business and as a source of financial control. The world of just-in-time is being transformed into a world of just making the quarterly plan—from "where are the goods?" to "where is the money?" It constitutes a major change.

One company that has had a profound impact on the supply chain in recent years is Dallas, Texas-based i2. Part of i2's impact is a result of its fresh look at the supply chain and the processes and values it encompasses.

Keeping IT in Perspective

In terms of its SCM solution, i2 differentiates value chain management from transportation management and distribution management, according to Razat Gaurav, senior manager of product marketing and strategy, i2.

"Supply chain management enables enterprises to forecast demand, match supply with demand, and execute to fulfill that demand—including transportation and distribution processes—keeping real-world material and capacity constraints in perspective," he explains.

Traditional supply chain management has focused on these processes from an enterprise-centric perspective. i2's Value Chain Management solution, however, goes beyond the four walls of the enterprise and drives collaborative planning, execution, and event management of business processes with channels, suppliers, logistics, and other trading partners.

"Value chain management also encompasses a broader perspective and embraces all business processes from the supplier to the customer's customer. These processes include supplier relationship management, supply chain management, and demand chain management," Gaurav says.

"Value chain management is predicated on driving benefits for the entire supply chain," he notes. "It is based on the notion that the basis for competition has shifted from enterprise vs. enterprise to value chain vs. value chain."

Focus on the Customer

i2 has recently increased its focus on the customer with solutions designed to create operational efficiencies that enhance shareholder value and improve customer service levels. These offerings include an end-to-end distributed order execution solution, which provides a single face to the customer across a heterogeneous environment; intelligent demand planning; replenishment planning and order fulfillment; and optimal transportation and distribution management.

The i2 SCM solution integrates supply chain planning that is comprised of demand planning, supply planning, factory planning, transportation planning, and scheduling with supply chain execution that spans order management, inventory management, transportation management, warehouse management, international trade management, and event management.

In addition, i2 offers a revenue and price optimization solution, and a complete service parts planning and management solution that complement and complete the footprint.

i2 offers its solutions as industry-specific templates incorporating best practices that companies can rapidly implement at the lowest total cost of ownership. i2's mission is to deliver $75 billion in customer value by 2005 (a third-party audit firm is used to track this value delivered). Users of i2 solutions also influence product development and functionality priorities through a well-structured process.

TaylorMade-Adidas Golf recently began using i2's Mobile Solution to enable real-time decision making across the value chain through the use of intelligent, integrated mobile applications and tools. Prior to its implementation, the golf equipment manufacturer's service representatives used a manual solution requiring time-consuming data entry methods to assist with field inventory management.

With the new i2 Mobile Solution, TaylorMade-Adidas Golf now has the ability to capture field inventory information on handheld devices, collaborate with customers on orders in real time, provide order tracking and trace visibility, and firmly commit to scheduled product deliveries.

"Using the i2 Mobile solutions, our sales representatives have an unprecedented amount of information available to them, enabling world-class category management capabilities while reducing time spent on non-value-added activities," says Mark Leposky, vice president of global operations, TaylorMade-Adidas Golf.

"We expect to also benefit from improvements in product sell-through information velocity, driving more effective use of i2's Demand Planning and Forecasting solutions, which are already deployed," he adds.

CIS Architecture

Gaurav believes that i2's technology architecture also gives it an advantage over its competitors.

"i2's Common Infrastructure Services (CIS) is an open standards integration architecture drawing upon best-of-breed tools from leaders such as Informatica and Web Methods," he says. "i2 also has gained knowledge and experience from more than 10,000 implementations across 1,500 customers. The architecture drives rapid and seamless integration of i2 solutions in diverse, heterogeneous environments that characterize most enterprises today.

Part of the value that i2 brings to the table is its integrated approach to meshing optimization technologies with industry best-practice experience, notes Gaurav. This combination allows i2 "to deliver rapid ROI through a proven business-release methodology," he says, which ultimately drives more value throughout the entire supply chain.

For more information on i2 and its SCM and value chain solutions, visit: www.i2.com.

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