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J.D. Edwards is one step closer to offering a fully collaborative supply chain application for midmarket customers with the launch Wednesday of its demand-forecasting module. The first component of the company's upcoming Supply Chain Management 9.0, the new tool analyzes historical data and applies advanced algorithms to predict future sales.
Working in tandem with Demand Consensus 2.0, which J.D. Edwards introduced late last year, Demand Forecasting targets companies in the pulp and paper, utility, energy, chemical and industrial-manufacturing sectors.
Inventory Control
"You need the statistical forecasting piece if you are relying on historical sales 
and shipment information," said Andrew Carlson, J.D. Edwards' director of product marketing for supply chain management. "The statistical module can be one of the inputs into the consensus process. In some industries, it will be the leading piece," he told CRM Buyer Magazine.
Demand Forecasting incorporates an automated forecasting engine from SPSS (Nasdaq: SPSS). Other features include a safety stocking function to help control inventory levels, and scenario and what-if analysis capabilities to identify exceptions.
Together, Demand Forecasting and Demand Consensus start in the US$100,000 to $150,000 range. Pricing varies, depending on the number of users.
Serving the Midmarket
The new demand management offering is designed for the average midmarket company that is looking to have a system up and running in six weeks, Carlson said. Customers at that level want ease of use, full integration and an interactive framework at reasonable cost, he noted.
High-end software from vendors like i2 Technologies (Nasdaq: ITWO) and Manugistics (Nasdaq: MANU) is for companies that can afford the luxury of hiring dedicated demand planners trained in statistics, said Meta Group senior program director Dwight Klappich -- but most midmarket companies need simpler solutions.
The J.D. Edwards product provides "a nice, clean architecture," he told CRM Buyer. "Companies in the midmarket prefer something intuitive to something with lots of bells and whistles."
Historical Perspective
FWMurphy, which manufactures engine equipment controls and monitoring systems, began implementing the J.D. Edwards demand-management module in December and saw a 20 percent improvement in its forecasting accuracy, said Mitch Myers, vice president of Murphy operations.
Using Demand Forecasting and Demand Consensus 2.0 together allows for objective and subjective analysis. "History is a good starting place," Myers told CRM Buyer.
"We're not live on the product yet," he noted, "but it's been very straightforward -- on time and on budget. We expect to save money and improve customer service."
Demand management is also key to improving visibility, Carlson said, adding that the statistical piece of the supply-chain puzzle is an early predictor of trends.
No Magic Bullets
Still, there are no magic bullets for balancing supply and demand shifts perfectly. "Forecasting is getting better, but there will always be a need for better demand planning," AMR Research senior vice president of research Bruce Richardson told CRM Buyer. "The goal is to have an iterative process that gets you closer to actual demand."
The IT software industry is at the beginning of the long road to achieving a fully collaborative supply chain, Carlson said. There are many links in the chain, and information moves slowly across them. "We don't have maximum visibility. You're only as strong as your weakest link."
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