If supply chain planning were a baseball game, Eric Peters would skip ahead to the eighth inning.
The CEO and co-founder of Los Gatos, CA-based start-up TrueDemand Software knows that as the game moves along, the odds of guessing the outcome increase. In that sense, TrueDemand is the ESPN of supply chain planning, gathering and dissecting data that tells a company how it should alter its product planning.
When TrueDemand launched in the early part of 2005, it drew attention for its ability to crunch RFID data that could then help shape subsequent planning decisions. A year and a half later, RFID is still struggling for wide-scale deployment. Mindful of this, Peters stresses the many data sources that inform TrueDemand's Predictive Solutions family of tools.
"It's not just RFID information," he says. "It's point-of-sale information, it's retailer-supplier portal information, it's master-data management information." From that vast collection, the TrueDemand product culls what Peters calls "the true signals in your supply chain."
Steve Banker, director of supply chain management at ARC Advisory Group, says TrueDemand is definitely unique among supply chain vendors. With traditional products, he says, "You'll put together demand forecasts that are a month out or more." TrueDemand shortens that forecast and more closely aligns it with conditions in the supply chain, decreasing the vagaries that can upend the best-laid plans.
"What TrueDemand is doing is they're trying to provide better data right from the source," Banker explains. "It's more granular." While no such solution can truly be real time in this day and age, Banker says TrueDemand is as close as a product can be.
"What we're doing is we're continuously forecasting and updating [the] 14- to 21-day demand of your product at the item location level," Peters explains. "We've also integrated into that [process] execution tasks. This is one of the things that we as a company did that was very different for supply chain."
Also key to the product strategy is an intimate focus on particular retailers. If Wal-Mart represents a large segment of a manufacturer's business, the focus should be on how to be the best possible supplier to Wal-Mart. Target may be an equally important customer; TrueDemand can manage that relationship, too, with data derived exclusively from that value chain.
The young company is now closing out its second round of financing. Peters co-founded the firm with a handful of colleagues, among them Dr. Hau Lee of Stanford University, whose algorithmic abilities form the core of the product. Those proprietary algorithms, according to Peters, will also help insulate TrueDemand from the competition in years to come.
As for the company's prospects, ARC's Banker says, "I continue to be intrigued." Enough, in fact, that he has asked executives at the company to brief him when they've reached a maturity point with one of their key customers, Kimberly-Clark. "And I don't do that very often," he notes.
For the moment, TrueDemand is focused on building a stable of strong customers, but is tight-lipped about the roster. A recently announced contract with global powerhouse Hewlett-Packard could spark more customer wins.
Peters describes the TrueDemand technology as "pretty agnostic. We run Websphere, we can do NetWeaver. We do Oracle, SQL, and DB2," he says. The start-up is hoping its partnerships will propel it to greater success. IBM is a retail partner, and RFID data capture has been facilitated by alliances with VeriSign and Alien Technology.
The company has attracted a management team composed of former executives from companies like Manhattan Associates, i2, and SAP, and has grown substantially since its founding.
"You know, when it was four or five of us, it was certainly different than having 30 or 40 people," Peters says. "Now that we've got critical mass, it's becoming a little bit more like a business, but still we're trying to keep the fun in it."