Manufacturing Recovers, Supply Chain Investments Continue

Purchasing managers' index shows gentler decline; companies still looking to enabling technologies

Tempe, AZ  December 3, 2001  Despite a report showing continued decline in U.S. manufacturing, December began on a positive note for a raft of supply chain solution providers, with announcements today that companies ranging from electronics parts suppliers to electronics retailers and from apparel manufacturers to financial institutions are investing in technologies to improve their supply chain performance.

U.S. manufacturing activity declined in November for the 16th straight month, according to the National Association of Purchasing Management (NAPM), which this morning released the results its latest survey of purchasing managers.

But the NAPM's November purchasing managers index of 44.5 was a marked improvement over the October level of 39.8, a 10-year low for the index. A level below 50 indicates contraction in manufacturing.

Nevertheless, a variety of companies, including manufacturers, apparently are forging ahead with investments in supply chain technologies with a view to cutting costs and improving their ability to service their customers.

Here are the details on the latest announced deals:

·        Consolidated Parts Taps Elcom for e-Procurement

Consolidated Parts, a technology automation design company in the programmable logic control market, will use Elcom International's PECOS Internet Procurement Manager (PECOS.ipm) to automate the purchasing of its information technology (IT) products.

Consolidated also will use Norwood, Mass.-based Elcom as its primary IT products supplier.

Scott Friesen, vice president of management information systems for Consolidated, said that this initiative was intended to help his company use Elcom's remotely-hosted e-procurement technology to streamline IT products procurement process. "We expect to generate internal cost savings by reducing our IT product supply chain inefficiencies," Friesen said.

Robert Crowell, Elcom's chairman and CEO, said that his company's IT products procurement offering combined the advantages of e-procurement with Elcom's capabilities in IT product sourcing.

·        i2 Keeps Best Buy Moving

Electronics retailer Best Buy has implemented a transportation solution from i2 to control its freight operations and manage its transportation processes.

Best Buy, seeking the ability to increase customer service levels while reducing total freight costs, went looking for a transportation solution that would allow for increased collaboration and visibility across incoming loads and that would provide the ability to consolidate, control and route shipments more effectively.

The big box retailer is now using Dallas-based i2's transportation solution to consolidate shipments, design routes and assign carriers and services to accommodate delivery times and service restrictions. The solution uses various types of data  including shipment, location and rating information  to consolidate shipments into efficient, cost effective loads, and Best Buy has reported that the software has decreased delivery route times.

Additionally, i2 says that its transportation solutions have assisted Best Buy in the timely delivery of merchandise from suppliers and transportation providers, and have permitted rapid resolution of transportation related problems.

Eric Morley, director of transportation and supply chain operations for Minneapolis-based Best Buy, said that combining the retailer's knowledge of its transportation network with i2's technology has allowed Best Buy to make quicker and smarter transportation-related decisions and ultimately serve its customers better. "Our goal is to make the shopping experience easy for our customers, and a material component to maintaining customer satisfaction is to ensure that the necessary products are in the right place at the right time," Morley said.

The Best Buy system now provides increased visibility and optimizes shipments across a variety of modes including full truckloads and less-than-truckloads. Best Buy's transportation operation reports that it is able to make complex transportation decisions related to carrier selection, shipment routes and transit time versus overall cost, enabling the retailer to better control freight and to reduce transit time.

·        Logility Outfits Williamson-Dickie

Work apparel leader  and, lately, teen fashion favorite  Williamson-Dickie Manufacturing Co. is aiming to use a solution from Logility to increase fill rates and reduce order cycle time through supply chain optimization and internal collaboration between corporate sales, finance and marketing.

Producer of the Dickies brand of work duds, Fort Worth, Texas-headquartered Williamson-Dickie is implementing the software company's Logility Voyager Solutions in a bid to more accurately forecast customer demand and replenishment of clothing items, with the goal of improving customer service and reducing inventory and waste throughout its supply chain.

Atlanta-based Logility says that the manufacturer will gain increased visibility, real-time event management and exception-based alert notification for improved agility and response to time critical supply chain events. Williamson-Dickie also will be able to track the specific lift of promotional campaigns on top of its normal seasonal demand patterns.

"Logility provides Williamson-Dickie the ability to develop a significantly more accurate forecast that will meet the business needs of all functional groups," said Philip Williamson, chairman, CEO and president of the family-owned Williamson-Dickie. "Through internal collaboration and supply chain event management our company will have the increased visibility to react to market and consumer changes, optimize inventory and allow our people to focus on value-added activities which will continue to enhance our customer service capabilities."

"The apparel industry is intensely competitive and the ability to gain insight into customer demand patterns provides Williamson-Dickie a significant competitive advantage," said Mike Edenfield, Logility CEO.

·        Bank of the Philippine Islands Banks on Walker Interactive Systems

The Bank of the Philippine Islands will use an e-procurement solution from San Francisco-based Walker Interactive Systems, with view to cutting costs throughout the bank's 690 branch offices.

"Walker's e-procurement solution will allow Bank of the Philippine Islands to improve on our current procurement and reporting processes to realize both short and long term return on investment by allowing us to monitor the purchases made by the different units within our bank and then leverage that information to make better informed decisions," said Corazon Remo, senior vice president at the bank.

Remo added, "In addition, by automating and consolidating the bank's requisitions, the bank will now benefit from improved management information which will then be utilized to leverage the bank's position in negotiating contracts between the bank and its suppliers."