PeopleSoft unveils demand-driven modules

As manufacturing production schedules are increasingly tied to customer demand rather than long-range forecasts, enterprise vendors are ramping up their SRM (supplier relationship management) applications.

PeopleSoft has targeted its suite at helping manufacturers move to demand-driven production. The company unveiled three major components at the National Manufacturing Week 2004 Conference in Chicago last week. Two portal-based components will allow manufacturers to “pull” materials from suppliers rather than having materials “pushed” to them on the basis of long-term contracts and forecasts, according to Carol Ptak, vice president of manufacturing at PeopleSoft.

“Instead of focusing on inventory as an asset, now the focus of a manufacturing plant is to have a minimum amount of inventory and yet respond quickly to consumer demand,” Ptak said.

Sharing forecast information with customers and suppliers via a portal is a sound method of improving supply-chain performance, according to Bill Swanton, vice president at AMR Research. Swanton cited a pilot program by Johnson Controls, a tier-one automotive supplier that saw a 17 percent to 24 percent improvement in inventory turns when it shared forecast data with suppliers five levels down the supply chain. The supplier also saw a reduction in lead time between 32 percent and 58 percent, trimming its window from 26 days to 11 days.

“The portal reduces the time necessary to propagate forecasts information through the supply chain. It lets you change it quickly and often so suppliers can react faster to commit capacity,” Swanton said.

PeopleSoft’s Supplier Self Service portal will include supplier schedule sharing and enhanced supplier collaboration to give suppliers the same visibility and information as the manufacturer. A second portal dubbed the Buyer Workspace will include tracking of purchase orders and receipts online in real time, alerts for exception management of inventory issues, and supplier performance metrics.

In addition to the portal solutions, PeopleSoft will introduce Order Promising for Configurable Products and Advanced Forecast Modeling as part of its supply-chain management planning suite. The order-promising component will allow manufacturers to build to customer orders by looking at the available components, capacity, and supplier availability, Ptak said.

According to Navi Radjou, vice president of enterprise applications at Forrester Research, PeopleSoft is trying to match best-of-breed capabilities and, in so doing, overturn the assumption made by some manufacturers that best-of-breed vendors have better and more advanced capabilities than do ERP vendors.

PeopleSoft hopes users will revisit such assumptions. Its new product includes advanced software capabilities acquired from JD Edwards and offers “manufacturing process best-practices” with partners, Radjou explained.

“PeopleSoft is breaking some ground by coming up with a solution to help manufacturers respond to demand-side fluctuations,” Radjou said.