Changes in market conditions, supply constraints, demand fluctuations and other variables mean that business forecasts will never be perfect. However, working together with i2 Technologies, Inc., businesses have the ability to optimize their forecasting processes and adopt strategies that can mitigate risk and help them better react to demand.

Through its next-generation Forecast Optimization service offering, i2 can help companies better understand their demand and root causes of demand variability, allowing them to optimize forecasts and supply chain performance against business objectives as the business environment changes.

“This next-generation service offering from i2 does not require a company to have our software installed to realize benefits,” said i2 Chief Executive Officer, Michael McGrath. “With Forecast Optimization, we can conduct strategic assessments using our next-generation supply chain tools and the customer’s data to develop strategies for process improvement, better utilization of customer’s existing forecasting tools and to make improved decisions throughout the supply chain.”

Getting Started
i2’s forecast optimization process begins with a strategic diagnostic. This process takes approximately six weeks and is designed to help companies survey, gather and interpret historical data, chart how their business currently forecasts, diagnose barriers to success and then plan what actions are required to improve forecasting capabilities. i2 solution experts leverage i2 forecasting tools during the process, but installation of the i2 software is not required. The process uses customer data inputs and the diagnosis can be done with current i2 customers or customers leveraging enterprise applications from other vendors, such as SAP.

Customers typically realize a return-on-investment from the process improvements adopted as a result of the initial strategic diagnosis. They can then choose to move into the second phase where a demand model is deployed. This phase involves a software deployment used in conjunction with existing enterprise systems, and can be a limited-scope engagement or a hosted model. The final phase entails a complete forecast optimization model which expands beyond the initial rollout and can include additional product and customer information depending on the company’s objectives.

i2 Forecast Optimization is part of an expanding software suite and consulting services being developed at i2, offering a series of optimization solutions that leverage the i2 Agile Business Process Platform. The next generation of i2 Forecast Optimization can be used to help businesses manage their supply chain while constantly adjusting their forecast to changing business conditions. The solution can also be used to help businesses with new product introduction, to better understand buying behavior, evaluate promotions and manage variability overall across the business.

The Business Challenge
Businesses worldwide and across all industries face the challenge of forecasting what to build, make, or buy in order to create accurate supply chain plans. This makes solid forecasting essential, but also difficult when businesses face fluctuating supply availability due to delays in production, unpredictability of promotions, inadequate cross-organizational visibility and forecast padding by disparate divisions to ensure product availability.

Over-forecasting can lead to surplus inventory and excessive markdowns, while under-forecasting can translate to lost sales. Companies often use historical demand data to strike this delicate balance, but gain a competitive edge when they can rapidly adjust forecasts according to market conditions.

i2’s closed-loop approach to Forecast Optimization utilizes supply chain design, planning and execution techniques to help companies better manage variability by:

Understanding and identifying sources of variability and contributions to total cost
Stratifying demand and supply in terms of variability, volatility and risk
Eliminating or reducing it through optimized network design
Developing a global sourcing and capacity strategy and global multi-tier buffer policy
Implementing organizational metrics to drive accountability and collaboration
Optimizing forecasting techniques based on demand characteristics
Strategically using inventory to guard against risks
Reacting to variability to close forecast loop and learn
Synchronizing sales and operations planning
Performing supply and material flow adjustments based on actual demand
i2 Forecast Optimization to Improve Forecast Accuracy

A large automotive suppler was challenged to achieve good fill rates at their distribution centers. Based on historical demand, the company schedules a different number of production runs for each product model. These runs are conducted anywhere from once a year to once a month depending on demand for a specific product.

The i2 Forecast Optimization strategic diagnostic revealed that forecast accuracy was good at the customer level but required improvement at the DC level where it was most important. i2 suggested a risk-based forecast partitioning to optimize the forecasting process. i2 recommendations to the company included a forecasting approach based on annual volume, number of product campaign runs and forecast confidence to determine the number of firm, flexible and risk quantities.

i2 Next-Generation Solutions and the i2 Agile Business Process Platform
Today’s announcement is part of the i2 Next-Generation Supply Chain Management (SCM) solution approach designed to help businesses address their most pressing business challenges. i2 Next-Generation SCM solutions are built on the i2 Agile Business Process Platform, a unique service-oriented architecture (SOA) that includes a layer of technology services and a business process workflow engine. The platform is business process management (BPM) compliant and interoperates with legacy, ERP and other enterprise architectures.

i2 Next-Generation SCM Solutions feature a series of workflows based on i2’s industry and supply chain expertise combined with easy-to-use visual programming capabilities designed to enable companies to automate solutions. Using i2 Studio, these workflows can be modified to adjust to changing business processes allowing for capabilities to be expanded, and changes delivered to users through a common integrated user interface.

Source: Business Wire

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

paperback student version $ 19,99 hardcover executive version $ 29,99

| Permanent Link | Print This eLog |

(Visited over 19381 times)