Vivecon Corp. Offers New Risk Management Solutions for Auto Industry

Software applies financial engineering techniques to tooling, capacity and sourcing decisions


Software applies financial engineering techniques to tooling, capacity and sourcing decisions

Mountain View, CA — October 11, 2004 — Vivecon Corp., a supply chain risk management solutions provider, today announced two new offerings for tooling, capacity and sourcing decisions.

Vivecon said its new Strategic Component Manager and Tooling & Capacity Manager software applies financial engineering techniques to provide business intelligence that factors demand uncertainty and supply risk into automaker's decisions. The company said that the software doesn't use historical data to describe transactions and events that have already happened; rather it provides risk monitoring and hedging capabilities. Vivecom said the software is designed to enable auto manufacturers and their suppliers can to anticipate the effects of changing demand and market uncertainty to minimize the disruptive effects of supply-demand mismatches.

The provider said its Strategic Component Manager software enables automakers to quantify risks and develop hedging options for mitigating the effects of unpredictable swings in demand. Its Tooling & Capacity Manager software manages uncertain demand for new car options, then monitors market acceptance under varying conditions. Vivecon said this enables manufacturers to structure flexible tooling and capacity expansion options and avoid over- or under-investments in new product launches.

"Predictive, actionable analytics represent a major step forward in managing the risks inherent in capital equipment investments and procurement commitments," said Ann Grackin, partner and co-founder, ChainLink Research. "This functionality has broad applicability for any manufacturing supply chain affected by market uncertainty and volatile demand."

Auto manufacturers rely on options to differentiate models and generate incremental revenue, Vivecon said. However, fickle consumer demand for new options often increases the risk inherent in capacity and sourcing decisions that must be made months or years before they are brought to market. The provider said the sequential capacity capabilities in its Tooling & Capacity Manager software addresses this issue so that automakers can lower their initial tooling investments for a new car option by structuring tooling and capacity expansion options that are exercised only when needed.

Additionally, the company's Strategic Component Manager software allows automakers to structure more flexible and responsive supply contracts for components and raw materials, according to Vivecon. For example, the software's "early warning system" alerts automakers to availability constraints, price fluctuations and liability exposures. Automakers can then secure availability commitments and price caps.

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