Valdero Debuts Supply Chain Suite for Consumer Electronics Companies

Applications aim to integrate inventory visibility from manufacturing sites, streamline order fulfillment in response to actual demand

Applications aim to integrate inventory visibility from manufacturing sites, streamline order fulfillment in response to actual demand

Palo Alto, CA — July 2, 2004 — Supply chain solution provider Valdero has launched a new product family designed specifically for the consumer electronics industry, promising customers the ability to efficiently fulfill channel demand while balancing inventory across multiple distribution channels to minimize inventory exposure and stockouts.

Valdero said its Consumer Electronics Applications provide functionality that integrates inventory visibility from manufacturing sites, original design manufacturing (ODM) sites and distribution centers and matches this supply with actual demand and point-of-sale (POS) data from channel partners to streamline the order fulfillment process, helping companies build stronger relationships with demanding customers.

"Since consumer electronics companies are ultimately liable for excess inventory in the distribution channel, they need to have visibility along the entire extended supply chain," said S. Singh Mecker, president and CEO of Valdero. "This visibility enables effective vendor managed inventory programs that allow manufacturers to respond to real customer demand instead of blindly pushing material into the channel."

Supply Chain Suite for Consumer Electronics

In the price and brand-sensitive consumer electronics industry, short product lifecycles and retailer-specified sales windows are the norm, making time-to-market and time-to-volume the driving concerns.

Valdero said it has responded to these trends by developing this suite of supply chain applications designed to enable consumer electronics companies to rapidly respond to changes in actual demand and improve the order fulfillment processes with their retail and distribution customers. The new suite from Valdero to address these challenges comprises three applications — Global Inventory Visibility, Demand Replenishment and Supply Demand Matching — each of which addresses different aspects of the challenges facing consumer electronics companies.

For example, in recent years the severe cost and margin pressures caused by market conditions have led many manufacturers to outsource manufacturing, distribution and logistics. These trends have resulted in complex multi-tier supply chains; evolving complex relationships for inventory management and ownership; and high risk of inventory obsolescence. Valdero said its Global Inventory Visibility application addresses these challenges by providing a single platform to represent and view the supply chain from channel partner through supplier or ODM partner.

This application is intended to help manufacturer get an integrated view of inventory across multiple tiers from distribution and retail channels through contract manufacturers, ODMs and suppliers; analyze the impact of supply demand imbalances and resulting impact on financial performance; track key operating metrics for supply chain performance, visually and by exception; and collaborate on key inventory information with parties inside and outside the enterprise.

Demand Replenishment, Supply Demand Matching

In addition, with margins under constant pressure, managing costs and rapidly responding to changes across the extended supply and demand chain is critical to maintaining profitability. To counter cost pressures, many retailers and channel partners of these consumer electronics manufacturers have adopted replenishment models like vendor managed inventory (VMI) or channel managed inventory (CMI). These trends have resulted in inventory build up at VMI hubs, inability to execute these programs on a sustainable basis resulting in increased lead times, missed revenue opportunities on both replenishment and non-replenishment channels, stock outs at key channel partners and the inability to manage fulfillment of new products.

Valdero said its Demand Replenishment enables manufacturers to cope with these issues by allowing them to create and manage inbound replenishment signals by aggregating and rationalizing demand and POS information from channels; intelligently allocate supply to replenishment signals using business rules; and integrate with enterprise resource planning (ERP) systems to execute order shipment and tracking shipments back into the channel.

Finally, with short product lifecycles and retailer-specified sales windows the norm, time to market and time to volume are manufacturers' driving concerns in this sector, resulting in increased price protection and stock rotation penalties, inventory build up at channel partners and missed revenue opportunities.

According to Valdero, the provider's Supply Demand Matching enables manufacturers to tackle these challenges by helping them to aggregate demand across multiple channels, tiers and POS locations; prioritize demand using business rules to maximize business value; allocate supply to prioritized demand to minimize shortages and maximize order fulfillment performance; simulate the impact of unexpected demand changes and end-of-quarter hockey sticks; and create a personalized dashboard to analyze demand patterns and measure fulfillment performance -- visually and by exception; and finally,

According to Valdero, its supply chain applications have demonstrated their ability to help manufacturers lower excess and obsolete inventory up to 95 percent, reduce order cycle time up to 50 percent and reduce operations cost up to 30 percent, significant benefits in the price- and brand-sensitive consumer electronics industry.