Friday, December 4, 2009

Can Webplan Reconcile Planning and Execution? Part Three: Market Impact Continued

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 onto a 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, thus 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.

Webplan offers a library of the following worksheets: bill of material, material planning, planning sheet, planning manager, part planning, part properties, buyer workbook, engineering workbook, customers orders, forecast, procurement, constraint management, capacity analysis, inventory analysis, inventory on hand, and inventory control.
The next component, RapidResponse Resolution Engine (formerly Scenario Modeler) gives manufacturers proactive management capabilities that empower everyone relevant throughout the enterprise within various departments, and across the extended supply chain—both locally and internationally—to drive effective resolution in continually changing situations. In other words, instead of producing optimized answers for a utopian, static world, Resolution Engine produces a series of alternate action plans for a real dynamic world. Iterative modeling capabilities enable team members to propose and detail virtually an infinite number of potential action alternatives that accurately simulate their entire MRP in just minutes, instead of the days or weeks formerly required. The embedded algorithms are based on concepts, methods, and definitions contained in the APICS' studies and theory of constraints (TOC), while the future might extend to the Du Pont profitability model and the generic supply chains operations reference (SCOR) model that communicates SCM best practices benchmarks across companies.

Moreover, publishing capabilities enable participants and entrusted external suppliers to instantly share their suggestions (collaborate) with other group members in real time over the Web, whereas multiple security level controls allow businesses to specify which users may access specific information. Varying combinations of potential responses to changes, such as doubling shifts in a factory, changing engineering specifications, procuring from a different supplier, buying a new machine to increase production capacity, or thousands of others can be instantly modeled and shared on-line. This will enable group participants to merge independent action options and determine which choice is best. Task flows that outline steps for specific activities can be customized to meet company needs and facilitate the resolution process. As a recap, the solution can detail and rapidly iterate action alternatives, merge independent actions with multidimensional targets, and associated weights and importance, as to streamline and possibly standardize resolution processes.

As the action team assesses the impact of change and explores optional alternative solutions, they should be driven by a balanced scorecard view of business operations. The scorecard presents operational results "scored" by corporate goals and objectives, whereby the objectives of business units, departments and the entire enterprise are aligned rather than conflicted. (See The Fuzzy Logic Between Lead and Lag Indicators). Often, however, varied disciplines within an enterprise (such as the asset liability management, profitability management, budgeting, forecasting, strategic planning, etc.) are typically performed separately and inefficiently despite many of the potential synergies that exist among them.

This generally occurs because management does not have a comprehensive overview of the company, while department heads remain accountable only for their departmental strategy without being privy of other departments' data—data that might otherwise influence their decisions in the true team spirit. Thus, a scorecard becomes a dominant technique to maintain management focus on key business issues in the rapid-fire world of business change and ruthless global competition. With RapidResponse, the impact of change is continuously portrayed throughout the action team in a live scorecard view. As consequences, costs, and customer impact of the alternatives are explored, analyzed, and assessed, the results are continually presented in this live scorecard view and immediately shared. The action team stays focused on key corporate and customer objectives as they rapidly drive towards a goal-driven optimized solution. To that end, the third component of RapidResponse, the Live Scorecard, drives the best practices optimization in a world where tradeoffs in costs, margin, customer satisfaction, and other key business issues must be balanced to realize business success.

As a result, Webplan believes the offering should benefit many departments within a manufacturing organization. When it comes to operations and manufacturing, the benefit is in getting the right information to the right people, and in ensuring the results of decisions align with goals and objectives. The product should please the IT department since it quickly integrates with and complements existing applications, which often reduces the need for custom applications and reports, while providing a powerful and extensible tool for solving a variety of operations challenges. Finally, the finance brass should benefit from the operations decisions alignment with corporate metrics and from measurable reductions in operating costs (such as reduced, tied-up, inventory capital).

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