Smaller companies without an ERP or similar infrastructure can use the services of distributors to take advantage of the sales data. For example, distributor ADS builds demand models for its suppliers, collects sales data from retailers, and provides reports to its clients, which lets the clients focus on the data analysis, often in Microsoft Excel and Microsoft Access, says Bruce Mantz, executive vice president at ADS. "Distributors will have to do things like that to justify their existence" in a demand-driven world, notes Tim Vaio, vice president at Hitachi Consulting.
Focusing on Data Consistency
Because suppliers and retailers will vary widely in their applications usage, IT should focus its efforts on ensuring data consistency, both for internal systems and in data shared with other companies. Typically, such consistency is already in place for ERP, MRP, BI, CRM, and SCM systems.
Demand data is typically published as CSV (comma-separated value) files viewable in Excel and flat-file databases. AMR's O'Marah says more sophisticated formats, such as EDI, RosettaNet, and XML, are typically used for order handling rather than for sharing demand data. But the use of XML, Ferrari notes, will become more important as systems get more demand-driven and rely more on sharing business rules and demand assumptions along with the data.
Because so many companies use Excel or Access to manipulate demand data, most demand-planning tools import and export flat-file data. Many newer tools also support EDI, XML, and sometimes RosettaNet. In most cases systems will need to output and import several formats to satisfy the needs of partner companies.
For example, although the electronics industry uses EDI and XML more so than other industries, Paul Katz, head of global supply chains at distributor Arrow Electronics, notes that just 1,500 of his 14,000 customers are electronically connected. Katz expects more small and midsize suppliers to share data electronically as data-sharing costs go down, thanks to the use of RosettaNet and hosted systems.
As demand data is moved among supply-chain partners, there's a good chance there will be unexpected changes to underlying business-rule assumptions or to the data itself, Common Sense's DePalma warns. So when IT creates data-translation and reporting rules, it needs to understand how the data is used, not just what its format and labels are.
Integrating Trends With Forecasts
Thanks to improvements in data-filtering capabilities and support for more complex supply-chain models, modern demand-planning tools can integrate POS data to refine their forecasts as demand changes, Yankee Group's Dominy says. i2 Technologies and Manugistics are the leading providers of demand-planning tools, analysts say. Many vendors, including Demantra, Logility, Ross Systems, SupplyWorks, and Yantra, offer tools tailored to specific industries. Tools from the ERP vendors -- such as Baan, Oracle, PeopleSoft, and SAP -- are less mature, analysts agree. BI providers such as Business Objects, Cognos, and Prescient also offer some analysis tools, as well as databases that also handle rules and contingencies for the stored data. NCR Teradata has pioneered such demand-signal repositories, O'Marah notes.
IDC's Ferrari expects Microsoft will offer tools in the next few years as it completes digesting recent ERP acquisitions such as Great Plains Software and Navision. In the meantime, most small companies use Excel and Access.