Friday, December 4, 2009

Can Webplan Reconcile Planning and Execution? Part Two: Market Impact

The past two years or so have been an interesting if not a tumultuous period for the Ottawa, Canada-based, privately-held Webplan Corporation (www.webplan.com), which felt compelled to further refine its original supply chain planning (SCP) and business-to-business (B2B) collaboration value proposition.. The vendor has refocused on highly actionable response management software (a subset of broader corporate performance management [CPM] software, which is about communication and delivering actionable intelligence at the right time) for manufacturers and distributors, what it believes will be a growth market.

Thus, at the end of 2003, Webplan announced that changes made to its business direction in 2003—including a drive toward delivering value to manufacturing customers through response management software—has gained acceptance with both its manufacturing customers and strategic partners, laying the foundation for growth in 2004 and beyond. Despite the fact that many manufacturers have invested in enterprise resource planning (ERP) systems and many also have supply chain management (SCM) systems, most continue to use inopportune batch reports and pesky spreadsheets to manage their operations performance. These have proven to be inefficient and error-prone methods of supporting decision-making, resulting in reliance on "educated guesswork" rather than on accurate dynamic analysis to align decisions with strategic objectives.

For a detailed discussion of supply chain management—both planning and execution, see the tutorial Bridging the Reality Gap Between Planning and Execution.

Increasingly, every user company's success is contingent upon its ability to make almost immediate finished product or service delivery to customers. As supply chains become more dynamic and operate in near real time, the lines between planning and execution continue to blur, which bodes well for their functional convergence. Thus, some supply chain execution (SCE) vendors have started to move beyond pure execution to offer some planning and optimization capabilities, often with the "adaptive" moniker.

A new requirement is that, beyond making plans happen, adjustments need to take place quickly with the ability to tweak the system to respond across a variety of organizations and functions. Companies need real time information from execution systems to develop and adjust optimal plans, while the execution side should benefit from more realistic plans for some readiness sake, rather than to merely react after the fact in a firefighting fashion. We believe that planning and execution will become virtually inseparable in a trend that will see ERP, SCP, SCE, supply chain event management (SCEM), PLM, CRM, MES, and analytics/ CPM (such as, decision support tools and multidimensional analysis on information aggregated from all levels of the commerce chain, and an extensive sets of predefined performance indicators, as well as strategic planning and forecasting and balanced scorecard functions) coming together into an adaptive system. Harnessing this technology should lead to the so-called "self-healing" or adaptive supply chain—when a software engine monitors all the numerous events taking place supply-chain-wide, identifies and escalates exceptions, sends notification, and reacts appropriately to those exceptions, ideally (and only in the long term) without human intervention.

The future will thus see a blend of real time event management (i.e., execution side for the tactical time horizon) and SCP with its strengths in inventory management and capacity planning (i.e. planning/optimization side for mid-to-long-term horizon), as to enable the successful execution of the plan given current conditions. To that end, Webplan has the opportunity to master an offering with best of both worlds' traits—traditional SCP and SCEM—by combining real time event management with traditional optimization, and by extending well beyond traditional passive alerts to deeper types of decision support based on KPIs, that would result with active (for example, which only suggest the corrective response and action) and eventually, with fully auto-responsive alerts.

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