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Next Generation Demand Optimization for Manufacturing

December 15, 2015 | By River Logic

Technology has come a very long way in the last 150 years. From the seeds of industrialization in the late 1800s to the assembly-lines of the early 1900s, to robotic technology and computational technology and now to the international computer conferencing and communication via the Internet. Each of these steps have had an end goal of increasing profits by optimizing the manufacturing process (or parts of the process, at least). Today, manufacturing is no different — optimization across the enterprise is arguably the most important goal.

Hand-in-hand with fully optimizing any manufacturing company comes demand optimization. It saves a company money and allows them to increase output potential, buying potential, and revenue potential. Most importantly, it differs from demand planning in that it comes after initial planning has begun. It's a way of refining existing plans such that greater revenue can be attained, or unnecessary expense can be curbed, facilitating greater revenue acquisition. While optimization has always been a prerogative on the manufacturing floor, it doesn't make sense to stop optimizing once a solution has been attained. Technology continues to innovate. Next generation optimization incorporates prescriptive analytics, which reveal the bigger picture.

Baseline Demand and Demand Optionality

How products are manufactured and distributed, stocked or mixed has some effect on profitability. If a mix or distribution isn't yielding profit, it should be curtailed or excised. Enterprise optimization™ software can help with a variety of demand situations, including:

    • Demand Shortages
    • Demand Generation Efforts
    • Demand Prioritization
    • Upside Demand
    • Demand Forecasting

Improvements and Implementation

Once it's seen where positive and negative trends influence supply chains, a plan can be developed to correct redundancies and encourage fruitfulness. This is much more cogently completed with enterprise optimization™ software than it is for optimization software that is "microcosmic" in nature--only dealing with one wing of a manufacturing organization, or something of that ilk.

More Cogent Heuristics

"Microcosmic" demand optimization software only has heuristic capabilities in the single setting to which it is applied. Enterprise optimization brings the power of terabytes and petabytes of data interpretation via prescriptive analytics across the manufacturing organization's board. Imagine how much more in-depth demand heuristics can become if they're considering impacts across every marketplace to which a manufacturing plant caters, rather than just the impact it has locally?

Demand Generation Efforts

These are cogently optimized via demand optimization software. Which efforts successfully demonstrate demand, and which efforts are redundant, can be easily identified and discouraged or promoted. This can end fruitless discussion, making demand optimization software also optimal for interpersonal relationships throughout the office.

The Value of Next Generation Technology

Next Generation Tech doesn't remain "Next Generation" long. The cellular phones of today were the science fiction of the 24th century in the Star Trek of the sixties; but those communicators didn't have moving pictures or the internet, did they? They were basically glorified walkie-talkies. In modernity, a cellular device can do as much as the entire bridge of the Enterprise, as imagined in the sixties. If that's the case between then and now, how much greater will the disparity be between contemporary optimization software, and that which will come in the future? It makes sense, then, to be on the cutting edge of new demand optimization software as much as possible. The current generation allows for terabytes and petabytes of analyzing potential. What will the future hold?

Save Time and Money in S&OP Through Demand Optimization

Optimization software saves thousands of dollars; even millions. There are cases where enterprise optimization™ software cut redundancies and increased that which was working positively to begin with so much that the company experienced an additional 5% profit. If a company is making ten million a year, 5% profit is $500,000. If software is responsible for 1/10 of that, wouldn't it still be worthwhile to that organization? Enterprise Optimization™ is the future, and it will soon become standard. It makes sense to use this tool for demand optimization now.

Case Study: River Logic Cox Wood

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