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TrueDemand Targets Stock-Outs Sign Up to receive Daily News Alerts in your E-mail Inbox
Posted on Wednesday, October 18, 2006 5:22:00 PM |
Fresh off a second round of financing that netted $8 million, demand forecasting software start-up TrueDemand has released the second iteration of its supply chain management product said to help food and consumer packaged goods producers better forecast retail demand and more quickly replenish supply in response to fluctuations.
Version 2 of the TrueDemand suite of products aims to help such companies better forecast the demand for their products at the retail level and more quickly replenish supply in response to fluctuations.
By aggregating and analyzing all manner of point-of-sale and supply chain data, including information gleaned from RFID, EPC, and retailer collaboration, the new software suite can tell manufacturers where their product supply needs adjustments.
Version 2.0 features two important kinds of updates, according to Karthik Mani, TrueDemand's vice president of product management -- one related to business processes, the other related to technology.
The business aspect, he said, involves a "shelf back" approach to demand management, meaning that version 2.0 looks at product supply from the perspective of the store shelf and traces all the associated data back to the manufacturer's distribution center. A manufacturer that isn't utilizing RFID data can still see about 70%-80% of the value of the system, Mani said. "What RFID provides is somewhat more certainty," he explained.
The software's forecasting is now couched in an exceptions-based framework that monitors product distribution and sale processes and homes in on variances to the forecast. "Focus on the ones that you can do something about," is how Mani characterized the process. Version 2.0 furnishes users with actionable workflows that can address shortfalls or overstocks in the supply chain.
Mani pointed to promotions management as one of typical workflows facilitated by version 2.0. The workflows, he said, help a manufacturer ensure that a product is reaching stores at the correct time, that the old product is being removed beforehand, that promotional materials are on site and on display, and that inventory levels are adequate to last through the promotional period.
"What you need to understand is" what are the kind of things that are going to lead us to a stock-out," Mani explained. With the TrueDemand product, he said, "you prevent those things before they happen."
As another example, he cited the case of a store-level forecast that turns out to be wrong. Version 2.0's would inform a supply planner of the impending stock-out and allow for lead time to adjust product flow as necessary.
"Outside a four-week timeframe, our forecasts are as good as anybody else's forecast," Mani noted. TrueDemand's true milieu, he said, lies in short-range planning. Some TrueDemand customers, he said, update their forecasts as often as every 14 days. Because the software looks at more data points than traditional planning solutions, according to Mani, "We're able to look at it at a very high granularity."
As for the technological upgrade in version 2.0, Mani said the new release capitalizes on grid computing, which allows the mathematical engine that undergirds the software to produce quicker analysis and forecasts for manufacturers.
"Once you install the application and start pulling in data, it automatically figures out how many CPUs are available, how you can parallelize it, what are the tasks that can be parallelized, and parallelizes automatically," he said. The company has not yet publicized the specifications for the amount of computing power needed to run the latest release.
Another new technological wrinkle in version 2.0 is its SAP NetWeaver certification. TrueDemand works tightly with the ERP leader in an effort to ease costs and shrink implementation time for its customers. "Most of the consumer goods companies that we are dealing with are ... SAP customers," Mani said. "Once we get the customers that have Oracle or i2 or any of the other applications, then we will do the integration for that and have it certified." A full-fledged deployment of the system, he said, averages around 13 weeks.
The start-up remains tight-lipped about its product pricing, perhaps proving the old mantra: if you have to ask, you can't afford it. Mani said that target customers for the new offering are large, "top-200 suppliers."
TrueDemand has announced two customers to date: Kimberly-Clark and Hewlett-Packard. Mani said neither of those companies is expected to move immediately to version 2.0.
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