Keeping one step ahead of demand

Manufacturing & Logistics IT spoke with Martin Nurser of Tata Consultancy services (TCS), and Timothy Hughes, business development director, supply chain planning, Oracle, about their respective organisations partnership in taking to market an end-to-end supply chain management and application offering, and how this can help to take a substantial amount of cost and waste out of manufacturers business processes.

In the wake of the downturn, many industry sectors, such as consumer packaged goods (CPG), have witnessed customers increasingly looking for cheaper or discounted products, in addition to buying in reduced quantities. Oracles Timothy Hughes highlights the fact that, among many of the leading supermarket chains, there has been a distinct move towards greater sales of own-branded goods, often at the expense of the most commonly associated brands of the particular products in question. For example, consumers arent necessarily buying a leading brand of cornflakes as often at the moment, instead opting to pick up the supermarkets own brand instead in order to save money, he said. And whereas in the past, customers might have bought two boxes, they may now have got into the habit of buying just the one instead. Hughes adds that this type of change in consumer buying patterns naturally has an impact on the supply chain. We have seen an increasing number of manufacturers and suppliers coming to us pointing out that they have a warehouse full of goods that nobody wants and seeking advice on how best to offload product in as cost-effective way as possible.

Changes in buying habits

Because of such changes in buying habits, there is increasing pressure from retailers for brands to come up with more product promotion ideas, which can involve altered or re-packaging goods, together with accompanying promotional material such as giveaways or in-store cardboard advertising collateral. Therefore, the manufacturers serving these brands need to be in a position to receive information related to alternative production specifications or quantities as soon as possible in order to avoid unnecessary overstock, cannibalisation or late deliveries, etc., said Hughes. He also pointed out that, in the current market climate, manufacturers often have to manage more volatile changes in volume demand related to certain types of goods. Demand for certain goods may have reduced substantially, while other goods, or brands of goods, may increase to a sizeable degree, and manufacturers need to keep on top of these changes, he said.

Even before the so-called credit crunch came to the fore, Oracle had released to market its Demand Signal Repository solution in May last year. Hughes outlined its core value and functionality: This solution converts disparate sets of downstream data into retail demand insights that can enable improved decision making and execution across the enterprise. Its launch has proved to have been particularly well timed in light of the downturn that began to bite around the middle of last year. We have found that manufacturers that operate within the GPG space are particularly interested in Oracle Demand Signal Repository, as they may have a particularly critical need for the gathering of retail demand-related data while also attempting to determine what this data means for them from a production demand perspective. So our software solution can help gather such data and turn it into valuable business and operational insight. Indeed, Oracle Demand Signal Repository is ideally coupled with our Siebel Analytics product, which again is all about obtaining information from retailers and then gaining clear and valuable insight from this. In the wake of the downturn, were having a lot more discussions around this than traditional transactional based solutions at the moment as more manufacturers are feeling the pain.

Strong partnership

Martin Nurser of Tata Consultancy services (TCS) has been involved in a number of high-level CPG projects for a number of years, and has gained a deep insight into the particular constraints of this market space. While working on CPG business process management at TCS, I have come to know Oracles solution offerings well, he said. In fact, TCS and Oracle have formed a strong partnership in terms of supplying both process management consultancy and software applications to a variety of major players in this sector. Manufacturers in every industry vertical sphere, and none more so than in CPG, are now keener than ever to take cost and waste out of their processes. Many have had some degree of success but often only within separate silos within their enterprise. What TCS and Oracle advocate is for companies to consider building a methodology that looks at the whole supply chain, from end to end. Ideally, the manufacturer needs to be able to see immediately what the retailers current stocks are whilst realising or anticipating what the immediate, and even future, demand is likely to be. So therefore, they need to look at taking out cash and wastage from their operations in terms of unnecessary stock or late deliveries, etc. Supply chain issues are often tackled in isolation, but not so often across all the disciplines of a companys supply chain operations. 

Nurser states that the type of comprehensive process management consultancy and end-to-end application methodology that TCS and Oracle offer is new to the UK and mainland Europe, although it has become more entrenched in places such as the US. Nevertheless, Nurser believes this is about to change. TCS and Oracle are currently in the process of putting together a detailed demonstration suite to highlight the many benefits of this end-to-end approach, he said. The suite will be highly practical and hands-on, so users can see in detail how the programmes and methodology can relate to their business. We believe this is much more effective than asking people sit through a series of presentation slides.

Nurser added that this end-to-end methodology is not just a UK initiative involving a handful of specialists within TCS and Oracle. Our joint offering is fully supported by the expertise Oracle has to offer, not just in Europe but also in the US; while TCS in the UK is similarly supported by the business process management expertise that is available from dedicated specialists in India, he said. Nurser is also keen to point out that this offering extends far wider than just the CPG sector. We now have a golden opportunity to take this end-to-end methodology to the wider market; whether this be white goods, pharmaceutical, high-tech or a raft of other sectors. And our soon-to-be introduced demonstration suite will show its potential in full.