Funny thing about I.T. “solutions.” They don’t solve your problems forever. A perfectly functional piece of software might address a company’s needs of the moment. But a few years down the line, it’s likely to become archaic at best – and irrelevant at worst.
Radisys Corp. is acutely aware of that tendency. It makes embedded platforms and systems used in computing and network applications, mostly for communications and telecom service providers. Like many forward-thinking companies, it had an enterprise resource planning backbone – SAP Advanced Planning and Optimization (APO), to be precise – and what it thought was an effective sales and operations planning process.
Maybe not so effective. Turns out the company’s planning and forecasting processes were fractured and highly manual. Radisys was juggling multiple spreadsheets, and forecasting was anything but collaborative. Only one person could be working with the forecast at a time, and it took about a month to complete – by which time the old demand cycle was done, and a new one underway.
That’s the picture drawn by Lisa Aleman, senior director of embedded products global operations at Radisys. She comes from an extensive background in corporate I.T., extending to the first i2 Technologies planning engine of the late 1990s.
“I grew up in S&OP, and just thought everybody did that,” says Aleman, whose roots are in the semiconductor industry. In early 2010, she came to Radisys, and found the resident planning engine seriously deficient for the task at hand.
Multiple meetings were required to nail down a forecast. Operations, finance and sales participated at various points of the process, but never all at once. “Somehow a plan was arrived at,” says Aleman, “but [it was] pretty much detached. There was no assessment of the overall chain.”
Shift to Outsourcing
Complicating matters was Radisys’s decision to shift from captive manufacturing to an outsourcing model. The move had obvious cost advantages, but it also upped the risk of an even more disjointed supply chain. The time lag between the company, its customer and the contractor manufacturer for materials and order commitments was as long as 12 weeks.
“By the time I joined, they had bled all their buffer stocks to zero,” recalls Aleman. “Just about every delivery was late.”
Time for a new approach to planning – one that embraced collaboration among all partners in the process. The goal was to acquire a system that could enable a “full-up” S&OP process, Aleman says.
A new vice president of operations, with whom she had worked at a previous job, helped spur the change. For demand planning, they chose an application from Steelwedge, which has since evolved into the cloud-based platform known as PlanStreaming.
Aleman says the tool has fostered a collaborative environment between Radisys and its contract manufacturer. “They have full visibility to our [planning] engine. They can see what we see. And I have full visibility to everything that’s happening on the [production] floor.”
Radisys knows which suppliers the manufacturer is ordering from, and when materials are due to arrive at the factory. “I’m not dependent on waiting to hear from them,” Aleman says.
With its emphasis on high-mix, low-volume products, Radisys presented Steelwedge with a particular challenge. The customer maintains complex bills of materials that consist of multiple layers and thousands of discrete parts. “They needed the ability to better forecast and predict their demand, and understand what the demand is,” says Glenn Jones, executive vice president of product strategy with Steelwedge. Long lead times for parts make it essential that the company get a handle on demand and be able to commit to orders.
From End to End
Aleman favors the Steelwedge application because it offered a path to planning across the entire supply chain. At the outset, the company implemented separate systems for demand planning and supply-demand matching, but it’s now looking to combine those processes under a single system that will allow for a more cohesive approach. In its fully functional mode, PlanStreaming covers planning for products, sales, demand, supply strategy, operations supply chain and finance, according to Steelwedge.
“PlanStreaming will help us cover the whole gamut of supply chain, not just from the time that we forecast, but all the way through the chain – from how we put the supply and demand elements together, to how we rack and stack the prioritization scheme, to how we deliver value to our customers,” says Aleman.
Jones says Steelwedge has rolled up demand and supply management into a single module known as Response Management. The idea, he says, is to be able to run both functions on one platform, drawing on the same core data. The expected result is “much higher value and faster responses.”
The complete Response Management module is just getting underway, with first-phase rollout set for early May, according to Jones. Aleman says Radisys is the first customer of Steelwedge to take advantage of the newly branded PlanStreaming platform. The companies have been working for months to tailor the tool to the customer’s unique needs.
Phase two, scheduled for August of this year, will move from unconstrained to constrained planning, taking into account Radisys’s actual order lead times. In the first phase, that’s being done manually; the second stage of implementation will fully automate the process. Jones envisions an end-to-end system that will run at least 10 times faster than its predecessor.
The initiative allowed Radisys to scrap its old forecasting method, which was highly serial in nature. Now, says Aleman, it can update the forecast “anytime on the fly … based on whatever our customer’s heartbeat is. We’re no longer out of sync with customers months at a time.”
By responding to customer needs more quickly and accurately, Radisys has removed a substantial amount of waste from its supply chain. It has taken more than $10m of inventory out of the system in the past year, says Aleman.
“I would say that’s pretty good,” she adds, “but there are always more improvements to be had.”
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