Improving margins, revenue and customer satisfaction

Business Management talks to i2 Technologies’ Jim Caudill about how supply-side and demand-side collaboration is revolutionizing operations.

Industry veteran Jim Caudill is Vice President of New Generation Solutions at i2 Technologies. In this role he leads the development of strategies and cross-industry execution to deliver new generation solutions and services to market. His team leverages i2’s leading supply chain domain knowledge and SOA technologies to bring to market innovative, high value solutions; examples of this work include i2’s recently launched Customer Order Management Suite, i2’s new generation planning and i2’s strategic partnership with Microsoft to jointly deliver a supply chain intelligence suite that leverages Microsoft’s upcoming PerformancePoint offering.

Since Caudill joined i2 in late 1999, he has held a variety of positions in the company. Most recently, he was Vice President of Solutions and Alliances, working to refine i2’s messaging, invigorate analyst coverage and renew strategic partnerships. Previous to that, he was a senior director in i2’s development organization, where he was a driving force behind the development of i2’s Agile Business Process Platform. He has also been the Director of Order Management and Fulfillment for the marketplace SWAT team in the early part of 2000.

BM. How are the new generation of supply chain management tools changing businesses today and helping organizations to improve efficiency, while reducing costs?
JC. Organizations are reducing their fixed asset costs by outsourcing capacity and improving their overall manufacturing and fulfillment design. They are reducing inventory levels network-wide by improving their sourcing strategies and better deploying inventory, materials and work-in-process nearer to the point of consumption. Central planning and local execution has also re-emerged as a key driver of efficiency and cost reduction strategies.

BM. What common traits do successful supply chains have in common? In general, how well are companies achieving these targets? Can you give an example of a successful implementation?
JC. There are several key traits we see in our most successful customers. They recognize that the entire supply chain must be driven by customer demand – that flexible, demand-driven approaches to inventory management strategies ensure that every player in the supply chain is focused and aligned to the fulfillment of this demand. They achieve customer and supplier intimacy by segmenting and collaborating with their most strategic customers and suppliers and keeping commitments. They adhere to a rigorous post-mortem process that mutually helps the partners understand the root cause of issues and the reasons for any corrective actions. They have best practice sales and operations planning processes ensuring close alignment and responsiveness between sales, manufacturing and distribution. They rapidly reconfigure their businesses to respond to opportunities or competitive threats. Technology is only one part of this capability, as the organization must possess the mindset that continuous realignment.

Sprint is an excellent example of this, having rapidly rolled out an end-to-end supply chain transformation while successfully acquiring Nextel and incorporating them into the systems and processes.

BM. What are some of the most difficult aspects of SCM for companies? How best can these challenges be mitigated?
JC. Our experience with our customers has taught us that the most difficult areas to address today deal with intra-departmental financial collaboration, multi-divisional fulfillment and customer collaboration.

BM. How have the requirements of your customers changed over the years, and how have you been able to accommodate these changes?
JC. In the early 1990s customers were looking to re-engineering of business processes. Jack Welch, then of GE, was the champion of this era, during which we pioneered innovative constraint-based solutions to change the way the flow of materials in the factory was planned, later extending beyond the factory to the extended supply and demand chain. In the late 1990s when business process automation was all the rage, we were first to market with collaboration solutions for supplier and customer networks. We also pioneered the distributed order management space, allowing customers to mask internal complexity while presenting a single, unified face to their sales channels and customers.

Several years ago, as we witnessed the rise of India as a global outsourcing center, we developed hosted and managed service solutions to handle unique, highly collaborative and costly processes like VMI and pricing optimization. Today our customers look to us for our unique mix of technology, best practices and supply chain management skills as a business process innovation partner.

BM. In what direction do you see SCM evolving in the future?
JC. We are witness to a large number of demographic and technological shifts, which are driving a new-generation of technology-based global commerce. There are four ‘truths’ that are driving this:

• The individual consumer is the trigger of all supply chain activity.
• The scale of consumers and consumables will continue to reach unprecedented proportions.
• Companies will continue the transition from individual contributors to members of interoperable manufacturing, distribution and service teams and networks, with shared risks and rewards.
• Speed and adaptability will continue to provide significant competitive advantage.

What makes this moment in history unique is the perfect match between the primary force of economic change – the scale and influence of the individual consumer and the abundance of consumables-and the ability of information technologies to manage and synchronize the complexities of global manufacturing and distribution networks. The ability to quickly and efficiently align and control these distributed supply chain networks will provide the horsepower for the global economic engine.