Can Webplan Reconcile Planning and Execution? Part Three: Market Impact Continued

Market Impact

The past two years or so have been an interesting if not a tumultuous period for the Ottawa, Canada-based, privately-held Webplan Corporation (www.webplan.com), which felt compelled to further refine its original supply chain planning (SCP) and business-to-business (B2B) collaboration value proposition. The vendor has refocused onto a highly actionable response management software (a subset of broader corporate performance management [CPM] software, which is about communication and delivering actionable intelligence at the right time) for manufacturers and distributors, what it believes will be a growth market.

Thus, at the end of 2003, Webplan announced that changes made to its business direction in 2003—including a drive toward delivering value to manufacturing customers through Response Management software—has gained acceptance with both its manufacturing customers and strategic partners, thus laying the foundation for growth in 2004 and beyond. Despite the fact that many manufacturers have invested in enterprise resource planning (ERP) systems and many also have supply chain management (SCM) systems, most continue to use inopportune batch reports and pesky spreadsheets to manage their operations performance. These have proven to be inefficient and error-prone methods of supporting decision-making, resulting in reliance on "educated guesswork" rather than on accurate dynamic analysis to align decisions with strategic objectives.

For a detailed discussion of supply chain management—both planning and execution, see the tutorial Bridging the Reality Gap Between Planning and Execution.

Webplan offers a library of the following worksheets: bill of material, material planning, planning sheet, planning manager, part planning, part properties, buyer workbook, engineering workbook, customers orders, forecast, procurement, constraint management, capacity analysis, inventory analysis, inventory on hand, and inventory control.

This is Part Three of a four-part note.

Part One detailed the events.

Part Two began a discussion of the market impact.

Part Four will cover challenges and make user recommendations.

RapidResponse Resolution Engine

The next component, RapidResponse Resolution Engine (formerly Scenario Modeler) gives manufacturers proactive management capabilities that empower everyone relevant throughout the enterprise within various departments, and across the extended supply chain—both locally and internationally—to drive effective resolution in continually changing situations. In other words, instead of producing optimized answers for a utopian, static world, Resolution Engine produces a series of alternate action plans for a real dynamic world. Iterative modeling capabilities enable team members to propose and detail virtually an infinite number of potential action alternatives that accurately simulate their entire MRP in just minutes, instead of the days or weeks formerly required. The embedded algorithms are based on concepts, methods, and definitions contained in the APICS' studies and theory of constraints (TOC), while the future might extend to the Du Pont profitability model and the generic supply chains operations reference (SCOR) model that communicates SCM best practices benchmarks across companies.

Moreover, publishing capabilities enable participants and entrusted external suppliers to instantly share their suggestions (collaborate) with other group members in real time over the Web, whereas multiple security level controls allow businesses to specify which users may access specific information. Varying combinations of potential responses to changes, such as doubling shifts in a factory, changing engineering specifications, procuring from a different supplier, buying a new machine to increase production capacity, or thousands of others can be instantly modeled and shared on-line. This will enable group participants to merge independent action options and determine which choice is best. Task flows that outline steps for specific activities can be customized to meet company needs and facilitate the resolution process. As a recap, the solution can detail and rapidly iterate action alternatives, merge independent actions with multidimensional targets, and associated weights and importance, as to streamline and possibly standardize resolution processes.

As the action team assesses the impact of change and explores optional alternative solutions, they should be driven by a balanced scorecard view of business operations. The scorecard presents operational results "scored" by corporate goals and objectives, whereby the objectives of business units, departments and the entire enterprise are aligned rather than conflicted. (See The Fuzzy Logic Between Lead and Lag Indicators). Often, however, varied disciplines within an enterprise (such as the asset liability management, profitability management, budgeting, forecasting, strategic planning, etc.) are typically performed separately and inefficiently despite many of the potential synergies that exist among them.

This generally occurs because management does not have a comprehensive overview of the company, while department heads remain accountable only for their departmental strategy without being privy of other departments' data—data that might otherwise influence their decisions in the true team spirit. Thus, a scorecard becomes a dominant technique to maintain management focus on key business issues in the rapid-fire world of business change and ruthless global competition. With RapidResponse, the impact of change is continuously portrayed throughout the action team in a live scorecard view. As consequences, costs, and customer impact of the alternatives are explored, analyzed, and assessed, the results are continually presented in this live scorecard view and immediately shared. The action team stays focused on key corporate and customer objectives as they rapidly drive towards a goal-driven optimized solution. To that end, the third component of RapidResponse, the Live Scorecard, drives the best practices optimization in a world where tradeoffs in costs, margin, customer satisfaction, and other key business issues must be balanced to realize business success.

As a result, Webplan believes the offering should benefit many departments within a manufacturing organization. When it comes to operations and manufacturing, the benefit is in getting the right information to the right people, and in ensuring the results of decisions align with goals and objectives. The product should please the IT department since it quickly integrates with and complements existing applications, which often reduces the need for custom applications and reports, while providing a powerful and extensible tool for solving a variety of operations challenges. Finally, the finance brass should benefit from the operations decisions alignment with corporate metrics and from measurable reductions in operating costs (such as reduced, tied-up, inventory capital).

Cost-Effective Deployments

Webplan touts cost-effective and timely initial deployments, which typically average thirty days and a $50,000 fixed bid. A typical initial sale is one or two sites, with 25-30 users, while the average customer today has expanded to 250 users across several sites (e.g., Sanmina SCI, Honeywell, and Hubbell). The idea is to enable customers to become self-sufficient quickly for future expansions, while Webplan intends to be a leader in "commoditizing" setup.

The vendor has invested substantially in setup tools, given it has realized the importance of manufacturing customers being confident that the decision they arrive at based on the analytical results from RapidResponse first mirror the results their ERP system would produce if only they had the time to wait for it. Once validated, the algorithms run about one hundred times faster in RapidResponse and the results become timelier, since RapidResponse Server, which contains AlwaysOn Analytics and Resolution Engine, runs on the Intel Itanium technology. On the other hand, Microsoft Office/Excel applications have a direct link with RapidResponse Server for real time analysis and reporting.

Integration With Existing Business Applications

What should also appealing is the bidirectional integration with existing business applications, as RapidResponse complements rather than supplants ERP systems, because of Webplan's pre-existing data mapping solutions and its staff's experience with most back-office systems. Webplan offers generic connection services architecture, which is agnostic and can connect to existing middleware solution, while tailored connectors for certain application are already available (e.g., Agile PLM), or can be arranged at additional price.

Delivered as an optional module, RapidResponse Connection Services enables real time bidirectional data flows between the RapidResponse Server and other enterprise applications such as ERP. It allows users to provide a link between RapidResponse and their trading partners via a connection outside their firewall. For example, it can enable the exchange of electronic data interchange (EDI) transactions. To increase scalability, users can also use RapidResponse Connection Services to avoid having their transaction processes running on the same machine as RapidResponse Server. RapidResponse Connection Services have an ability to receive, process, and perform actions in response to task requests, which are XML documents that conform to the Webplan SOAP protocol, and are transported across networks using the Hypertext Transfer Protocol (HTTP).

Another optional module, RapidResponse Alert Service, enables users to have RapidResponse data automatically delivered at regularly scheduled, user-defined intervals to key decision-makers throughout the organization, including the automated distribution of workbooks to suppliers. The module supports an unlimited number of internal or external named users, while data can be delivered as a report in HTML, XML, or tab delimited text format. The method of delivery for the reports (such as, internal web site, e-mail attachments, etc.) can also be specified, and the module is also quite customizable, allowing users to configure reports for different recipients. For example, data from one worksheet can be reported differently for each supplier so that they can view only data that is applicable to them.

As mentioned earlier, RapidResponse is based on the Microsoft Windows technology and leverages the latest Internet standards. While it delivers many powerful capabilities (including sample applications and templates, such as supplier management) directly out of the box, it nevertheless provides the adaptability and extensibility to meet specific business challenges. To that end, RapidResponse Studio is a design environment that lets users extend the functionality of RapidResponse to create custom applications or extensions that address business problems unique to their environment. Developers can access the RapidResponse Server from a variety of platforms through a Microsoft COM (Common Object Model) application programming interface (API), with an XML/SOAP API envisioned in the future. Users can use RapidResponse Studio to create custom applications or extensions to Webplan applications using a variety of application development environments, including Microsoft Office, IBM Websphere, J2EE, and Microsoft Visual Basic for Applications (VBA), among others.

Other Custom Applications

Custom applications can also be developed using Extended Business Solutions delivered by the Webplan Solutions Consulting team, which has a combination of deep manufacturing and software expertise. Some extended solutions have been developed to meet customer-specific needs. One example is Alternate Part Management (APM), which improves inventory turns by identifying alternate parts from across the organization. APM then determines when they can be used in place of the primary parts, while the parts are consumed in a user-specified, priority sequence, and it provides an analysis of the impact of borrowing them. Clear to Build (CTB). CTB helps make decisions regarding inventory usage. It turns costly excess and obsolete inventory into revenue by identifying opportunities to build, configure, or ship sellable end items. It also identifies which shortages restrict the completion of a desired build quantity for a specific item, so that only the end items that can be competed are released. Another example is Inventory Liability Reporting (ILR) deals with users dealing with outsourced or contract manufacturing. Users can use the module to determine the impact of schedule, policy, or contract changes before they take place and thus identify strategies to reduce their liability, or, conversely, to reach an agreement on the settlement value using contact-specific terms. These are some of the extensions that are typically envisioned as a part of the "Phase II", once the basic RapidResponse capabilities have been mastered by the customer.

The RapidResponse footprint includes customers in a range of industries including aerospace and defense (A&D), automotive, ship-to-retail, electronics and high-tech, industrial, medical devices, and other discrete manufacturers. Some of these are also supported through optional modules. For example, aerospace and defense-centric features, such as Model/Unit Effectivity (MUE), address some of the most costly inventory and production challenges particular to the industry, by allowing users to track and control the configuration of every unit of production within an environment where customer demand can change quickly and products can easily be reconfigured. It aims at tightly controlling unitized production of a particular end item, and enabling users to save the costs associated with overproducing based on outdated specifications, because changes to product configuration can be identified quickly.

Another interesting optional module is RapidResponse Engineering Change Analysis, which enables users to optimize the timing of engineering changes with respect to material availability, production planning, costs of excess or obsolete inventory, and customer orders. It can evaluate making the engineering change at different points in time in order to understand the best effective date for the change with respect to the user's business objectives. The module can import and evaluate unreleased changes from many PLM systems, such as those from Agile, UGS PLM Solutions (formerly EDS), or MatrixOne. It can also evaluate changes that have been released to the ERP systems, but are not yet effective. Once an engineering change is imported, users can run a simulation that simultaneously projects the performance of key metrics for each alternate date, which enables users to select the date that most closely meets their objectives. The module also helps users identify specific actions required to support the selected effectivity date. For example, it can provide direction on new material orders that should be placed, existing material orders that should be cancelled, and updated "available" dates that users should communicate to customers.

Furthermore, RapidResponse Capacity Analysis allows users to evaluate capacity impacts of different plans but without the heavy investment required to use traditional capacity requirements planning (CRP) systems. The module allows for a work-center oriented environment to be modeled with basic data so that quick, rough-cut requirements planning (RCCP) comparisons can be done to narrow a set of alternatives. The capacity load is calculated by considering MRP calculations, work center capacity, and other constraints. Then, if warranted, a full CRP system could be used to precisely plan the chosen manufacturing line(s).

RapidResponse Constraint Manager allows users to define material and capacity constraints at multiple levels in order to produce more realistic and achievable manufacturing plans. There new plans are far superior to traditional manufacturing planning approaches, which typically require users to use separate MRP and finite capacity scheduling systems. Constraints play a critical role in determining the outcome of any plan, and the module aims at gaining insights into realistic results by simulating and evaluating the impact of constraints on operating plans, thereby creating achievable plans and schedules, and ultimately providing better promise dates. For parts with multiple sources, RapidResponse Constraint Manager can optimize source selection based on cost, priority, and allocation rules. If products can be manufactured at more than one location (either at dispersed physical plants or by contract manufacturers), the module optimizes source selection based on capacity constraints and other business rules, and it thereby can help with make or buy decisions.

Last but not least, RapidResponse Inventory Pooling aims at effectively managing complex pools of inventory, while considering strict customer or contract-related commitments and guidelines. For example, it allows users to avoid intermingling inventories of the same parts that are associated with different customers, contracts, or projects. Thus, customer expectations can be met by managing separate pools of inventory for each of the customers, while better understanding where the inventory is committed.

This concludes Part Three of a four-part note.

Part One detailed the events.

Part Two began a discussion of the market impact.

Part Four will cover challenges and make user recommendations.