PeopleSoft responds to demand-driven manufacturing

Citing the need to upgrade the PeopleSoft EnterpriseOne Supplier Relationship Management suite to support demand-driven manufacturing, PeopleSoft will unveil three major components to the suite at the National Manufacturing Week 2004 Conference in Chicago this week.

Build-to-order (BTO), a hot button phrase in manufacturing before the economy tanked and the concept went underground, is now reappearing as “demand-driven manufacturing.” Demand driven is a half-way step between basing production on forecasts and BTO, and is based on current customer demand.

PeopleSoft Inc. will introduce this week two portal-based components to its SRM suite allowing manufacturers to “pull” materials from suppliers rather than having materials pushed out to them on the basis of long-term contracts and forecasts, according to Carol Ptak, vice-president, manufacturing and distribution industries.

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

To keep procurement lean, the 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.

“Because the solution also allows the supplier to see how they are measured by their customer, they can set their own alerts,” Ptak said.

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

“PeopleSoft wants to help users revisit that assumption by giving them advanced software capabilities that they acquired from J. D. & Edwards Co. and advanced manufacturing concepts by offering them ‘manufacturing process best-practices’ with partner JCIT International,” Radjou said.

If PeopleSoft lacks anything to compete with best-of-breed vendors it is enough customer references for their new manufacturing solution, according to Radjou.

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

In addition to the portal solutions PeopleSoft will also 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 order by looking at the available components, capacity and supplier availability, according to Ptak.

All PeopleSoft products, PeopleSoft EnterpriseOne and World products will also now support RFID data.

All components are expected to ship by the third quarter.

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