Leading Supply Chain Software Vendors Differentiate Their Offerings with Analytics

Earlier this month I attended the SAPinsider meeting in Las Vegas. SAP was actively promoting its HANA solutions, which uses in-process memory primarily for providing real-time analytics. HANA is particularly well suited to analyzing extremely large amounts of data very quickly. SAP says that HANA can analyze data hundreds of times faster than traditional approaches to business intelligence.

The keynote address was given by Steve Lucus, the EVP and General Manager for SAP Database and Technologies. Steve gave the following example of how companies can use HANA in a supply chain risk management scenario. He asked us to imagine an automotive manufacturer with many large and small suppliers. Then imagine that the automaker has one key supplier of a critical part, such as a fuel injection system. What if a natural disaster occurs and that supplier’s primary factory is knocked out? For the automaker, quick analysis become critical. Many questions need to be answered quickly. How many fuel injection parts are on hand? Who else could they buy from? How long would it take to get those parts? What are the cost implications of sourcing from new suppliers when fully considering tariff, tax, and shipping costs? Using traditional systems, it could take weeks to fully answer these questions. Business suites leveraging HANA can greatly speed this kind of analysis.

SAP now offers HANA solution for Sales and Operations Planning and Demand Signal Management. SAP also announced the acquisition of SmartOps, which has been developing a short term forecasting engine based on the use of downstream data. The SmartOps solution, when used with the Demand Signal Management solution, becomes very synergistic.

Finally, SAP has introduced a Predictive Analytics solution based upon HANA. This solution can be used in several functional areas including supply chain management. It could, for example, be used to make out of stock predictions based upon demand spikes, changing lead times, or other events.

But SAP is not the only software vendor seeking to differentiate its offerings based on analytic capabilities. Infor and JDA Software are also worth mentioning.

Infor has blended together its user interface, SCOR metrics, in-line analytics, and opt-in social communities in a very appealing manner. The offering is very difficult to explain, but its excellence is immediately apparent when you see it demonstrated. Infor’s goal is to provide a greatly enhanced user experience. Interestingly, while business intelligence development is a component of the enhanced user experience, the usability is based upon Infor’s ION solution, which is primarily a middleware solution.

Meanwhile, JDA has built “Process Playbooks” that help to close the gap between planning and execution processes. Perhaps the most important process in SCM is sales & operations planning (S&OP). While plans are great, they have limited value if there are not feedback loops that tell executives when events are diverging from a plan and what changes must be made.

The S&OP process is built around building a monthly plan. The appropriate feedback loop would be detecting plan divergence during the month, having an escalation process in place to alert key executives, creating new plans quickly, and, finally, executing those plans mid-month.

The JDA S&OP dashboard has a deviation dashboard that includes the number of deviations by category — for example, financial plan deviations, over or underutilized resources, etc. The dashboard also categorizes deviations as being high, medium, or low in severity. Then in true dashboard fashion, a user can drill into a deviation, such as a financial shortfall, and see which items or customers are causing the shortfall.

But this is where JDA’s solution gets interesting. JDA allows planners to add a root cause reason code with preset reason tabs (e.g., “market below plan”) for why a particular item is below plan. There is also a comment section where planners can select predefined comments such as “Needs immediate attention.”

The solution also has resolution levers for this particular type of deviation! In this case, the levers are “reduce price” or “run promotion.” The solution then has the ability to escalate the problem to teams or executives for sign off; the ability to examine the new plan before executing it; the ability to push a button and update the plan; and, finally, the ability to communicate action items to the affected individuals.

In short, supply chain software vendors are doing interesting things with analytics, and they are using analytics to differentiate their solutions in the market. Because of space limitations, I’ve elected to briefly write about three vendors that I believe are doing particularly interesting work in the analytics area.

(Note: JDA Software and SAP are Logistics Viewpoints sponsors)