PeopleSoft takes manufacturing to next level with demand-driven solution

At its recent Connect 2004 user conference, enterprise application software provider PeopleSoft introduced its Demand-Driven Manufacturing solution, consisting of methodology and tools that enable manufacturers to become demand-driven organisations.

As a complete solution, the methodology and tools behind Demand-Driven Manufacturing encompass customer demand, supply chain planning, manufacturing planning, production planning and in-bound supply, all in real-time.

"The road to demand-driven success requires more than technology; it requires a complete knowledge of business processes and operational execution," says Dave Macdonald, national solutions consulting manager at PeopleSoft Africa. "Our demand-driven methodology provides customers with strategic and tactical guidance, helping them to assess their current situation, their future strategic objectives, and a proven approach to reach their demand-driven goals more quickly."

The solution provides a demand-driven roadmap for companies to adapt their production to changing customer demands. The methodology has three stages: capabilities assessment, business benefit quantification and best practices implementation plan.

In the capabilities assessment stage, a discovery tool is used to determine the customer`s stage of advancement in business process automation and cross-process integration. During the assessment, areas are identified where processes can be changed or improved to enable the customer to become more demand-driven.

"The assessment stage evaluates the business processes that are critical for every manufacturer`s business, including order-to-cash, plan-to-produce and source-to-settle," Macdonald says. "Order-to-cash includes accepting and managing an order, delivering the order and collecting payment; plan-to-produce includes planning the supply chain, deploying resources and creation products; and source-to-settle covers sourcing raw materials, enabling suppliers, executing procurement, and financial settlement."

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The next stage in the methodology, business benefit quantification, makes use of PeopleSoft`s Value Analyzer tool to quantify the business benefits of improvements identified in the assessment phase.

With this tool, customers can prioritise business process improvement opportunities and build their business case for investment. The tool calculates the financial impact of improvements in key business value drivers.

"For example, a company may identify an opportunity to increase profit through changing its plan-to-produce business process," Macdonald says. "By moving to a pull-based model without work orders, the company could reduce manufacturing cycle times by up to 90% and re-capture orders previously lost due to long delivery lead times."

The final stage is the creation of an implementation plan tailored to the customer`s environment that leverages industry best practices. The plan outlines the recommended path for technology, training and business process improvements, allowing customers to move from their current environment to a demand-driven model.