Supply-Chain Show Rocks; Paper Maker Streamlines Management

Some people may think the supply chain is a boring topic, but with executives from Caterpillar Inc., 3M Co., Toyota USA, DaimlerChrysler AG, and Procter & Gamble on the list of speakers, it's no wonder that i2 Technologies drew more than 7,000 attendees to its annual Planet conference in San Diego Oct. 8-11. Of course, having an evening rock concert on the waterfront with performer Don Henley, the lead singer from the Eagles, belting out some of the popular 1970s band's greatest hits, may have helped some. i2, the leader in the market for supply-chain-management software as well as software to run electronic trading exchanges, had a tough act to follow from last year, having unveiled plans in 1999 for its groundbreaking TradeMatrix online trading exchange for industry. But the Dallas-based software firm did its best, unleashing a batch of new products. Foremost among these was the new FulfillmentMatrix, which promises to help companies collaborate with their trading partners to improve planning, forecasting, and replenishment. The need to collaborate with all members of the supply chain was underscored by Sanjiv Sidhu, chairman and founder of i2, in his keynote address. "The weak link of the value chain hampers the activities of the rest of the chain," he said. i2 boosted its goal of helping its customers slash costs out of their supply chains from an aggregate total of $50 billion to $75 billion. In one initiative, Toyota Motor Sales USA launched a project called Monarch, aimed at improving demand forecasting, reducing inventory by half, and slashing the time it takes to fill back orders by nearly one-third. Despite the rock concert and executive keynoters who arrived on stage driving front-end loaders and hybrid gas and electric powered automobiles, at least one large manufacturer that has spent the last five years installing i2's FactoryPlanner and other modules extensively has yet to reap the billions i2 has promised in benefits. "Our return on investment is nothing to brag about today," John Hill, i2 project manager at 3M, told a crowd of several hundred attendees at one of the breakout sessions. Part of the problem, he says, was the difficulty involved in moving old "legacy" data on customers and products over to the new i2 system. "One division had 22,000 business rules -- it was horrendous." Another was the issue of change management -- i.e., training employees in the new processes and systems and overcoming the natural cultural inertia that exists in most large industrial companies. "We just had a tremendous amount of problems in the first two or three years," Hill says. Regardless, 3M, which has 100 i2 projects now in production, has plans to roll out an additional 106 i2 projects throughout the company. "I really think we will see some major benefits in the next few years," Hill added. As a word to the wise, he tells others considering the software to be aware of its intricacy. "These i2 products are complex," Hill adds. "They're not simple."

*** Office-Supply Maker Streamlines Supply Chain ByDoug Bartholomew Imagine being able to detect a trend in product demand as it's developing, well before your competitors learn of it. That's a capability enjoyed by Herlitz AG, a leading European manufacturer of paper, office supplies, and stationery, as a result of installing Numetrix/xtr@, a supply-chain-management package from J.D. Edwards & Co. "We are able to achieve greater flexibility in our inventory management and can therefore forecast follow-up orders more quickly and with greater precision," says Michael Muller-Wunsch, director of services/operations for central Europe at Herlitz, based in Berlin. "Using Numetrix/xtr@, Herlitz is able to recognize demand as it occurs, and to upload that information into its planning and production systems," says Dave Hill, vice president for industry sales and marketing at J.D. Edwards in Denver. "The Numetrix/xtr@ capability allows for all the activities in the supply chain to be shared by all participants." Herlitz used the software to set up an intranet connecting the company with its merchandisers so that they have realtime visibility into accurate delivery information. "We wanted to give our clients the opportunity to look into our systems to get real-time status on when deliveries have been scheduled," says Muller-Wunsch. "By using xtr@, we have managed to see some impressive results: reduced stock-out rates, lowered inventory levels, and increased stock turn rates."