Go Fygir! SCT Defeats Incumbent AspenTech at Texaco, Shell Venture

  • Written By: Steve McVey
  • Published: April 28 2000

Go Fygir! SCT Defeats Incumbent AspenTech at Texaco, Shell Venture
S. McVey - April 28th, 2000

Event Summary

SCT Corporation announced recently a sale of its Fygir Demand Planning application to Equilon Enterprises LLC, a joint refining venture of Texaco and Shell Oil. Equilon will use the software initially to forecast its gasoline products and it expects that diesel products will follow shortly after. Future deployment may extend to Motiva, Equilon's sister company under the Equiva umbrella.

According to Dennis Gannaway, Equilon manager of gasoline logistics, "thin profit margins in the chemical industry require an efficient supply chain enabled by accurate demand forecasts. We chose SCT's Fygir Demand Planning for its superior forecast accuracy and Web-based collaborative approach."

Petroleum refiners need the ability to forecast products in multiple dimensions at different levels. Salespeople who sell to customers in the wholesale class of trade forecast at a customer level, but other business segments are concerned only with product level forecasts.

Like other forecasting applications such as Logility's Demand Planning, Fygir DP uses a pyramid forecasting technique that allows users to manage forecast data at desired levels of detail. As Equilon states, "field personnel are concerned with grades such as premium, regular, etc. Scheduling and production personnel must be concerned with more detail."

Failure to make accurate forecasts can have a high price for refiners. The manufacture and distribution of gasoline is constrained by pipeline and tank storage capacity, neither of which is a significant factor in discrete manufacturing. Accurate forecasts are critical to assure efficient use of distribution and refining capacities.

Market Impact

Equilon's decision to partner with SCT Corp. for its demand planning needs seems strange at first, given that Equiva, the services arm for Equilon, made a huge investment in Aspen Technology's PIMS suite a little over one year ago. In fact, Aspen highlighted the sale in its third quarter 1999 report as the largest PIMS deal in history, exceeding the typical $200,000 license fee.

Aspen PIMS is an application for scheduling and optimization of process operations. It can be integrated to Aspen's demand planning product, a component of its MIMI supply chain suite, via a framework that incorporates standard communication protocols such as XML.

Why Equilon passed on Aspen's forecasting package is not clear, given that Aspen Framework houses data elements as objects and creating interfaces to other Aspen applications is simplified by the ability to use Visual Basic. MIMI's Demand Management module is well-integrated into the rest of the MIMI suite and has the ability to reconcile order history with a user-defined product structure to statistically generate forecasts. It may be that Equilon, in needing only a point solution for demand planning, considered an investment in a suite like MIMI to be unwarranted.

When asked if other demand planning packages had been considered, Equilon stated that it involved a number of tier one supply chain vendors in a thorough review process. Fygir Demand Planning was selected primarily because of the web-based collaborative functionality and emphasis, best-of-breed statistical engine, and process industry specialization. They added that SCT possessed superior mathematical and business process approaches.

Besides Aspen MIMI, another package it might have considered is Logility's Voyager Solutions, which supports collaborative demand planning in the form of CPFR (Collaborative Planning, Forecasting and Replenishment). Its CPFR-compliant software, however, lacks the flexibility of more generic collaborative approaches.

User Recommendations

Whatever its reasons for selecting SCT over Aspen, Equilon seems to have done its homework and other users will want to follow the same diligent course in selecting demand planning packages.

Fygir Demand Planning is a relatively new product compared to Fygir's other products, GRIP production scheduling system and FIT supply chain planner, but has been well integrated into SCT's Adage enterprise execution backbone.

SCT has also engineered the capability to provide user-configurable workflow automation for its integrated planning and execution suite, iProcess.sct. iProcess.sct should be a short-list candidate for process industry users, especially those in petroleum and chemicals manufacturing, who need a broad Internet-enabled enterprise application.

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