Right-Time Supply ChainRight-Time Supply Chain

The window between order and delivery is narrowing every day, as more companies reduce inventories and safety stock and customers' expectations rise. But operating a supply chain in real time is out of reach for most and may not be practical for all.

New technologies hitting the market can help companies cope with higher-velocity supply chains. Late last month, Apriso Corp. unveiled FlexNet 2003, a suite of manufacturing, logistics, inventory, quality, and other supply-chain applications built on Web services that's designed to help companies institute lean, just-in-time manufacturing processes. The latest version of the software gives users real-time performance data against preset operational metrics, helps users track material quality control and maintenance, and lets them leverage radio-frequency identification information.

Manugistics Group Inc. has added to its supply-chain software a Java-based platform called Swarm that's designed to help companies more accurately forecast demand, ultimately compressing planning cycles to more rapidly respond to events. The software maker also added RFID support.

Businesses are accelerating their supply chains, but, in most cases, real-time operations aren't necessary, says Mike Dominy, senior analyst at the Yankee Group. "The more important term is right time."

Helping companies have the information they need at the right time is what Apriso is trying to do with its software. French aluminum maker Pechiney SA is implementing Apriso's FlexNet 2003 to increase visibility and control of every operation in its production processes, says Marc Vincent, project leader at Pechiney's plant in Rugles, France. The company also wants to trace all data involved in product quality.

The software replaces a more manual process of loading production and quality data into Pechiney's SAP enterprise-resource-planning software and homegrown applications. The custom apps, based on spreadsheets, are difficult to maintain, Vincent says.

Manugistics' Swarm architecture lets companies distribute supply-chain-planning processes across multiple computer systems to optimize performance and scalability. The Yankee Group's Dominy says the software has the potential to decrease a company's out-of-stock rates, particularly during promotions, because it will help it forecast at the store level. "The more effectively you position inventory correctly in the channel and the more you know regarding demand, the more you can lower inventory and reduce transportation and logistics costs."

Though it has no immediate plans to use the Swarm technology, Bausch & Lomb Inc. is overhauling its supply chain. The eye-care company just finished rolling out Manugistics' software to its Lens and Lens Care businesses and is turning attention to its surgical and pharmaceutical divisions.

The $1.8 billion-a-year company uses the software to calculate more- accurate forecasts for each stock-keeping unit. It has cut inventory levels and safety stock at some of its distribution centers by as much as 30%. "Getting the right forecast target was really the first step in getting to automatic replenishment," said Robert Hufland, Bausch & Lomb's director of global demand and fulfillment programs, during a presentation at Manugistics' recent conference in Washington.

The replenishment process now takes into account on-hand inventory, open orders, and in-transit shipments. Hufland says, "It's just been a great thing."