Lawson Delivers Demand Planning, BI Tools to M3 Customers

October 28, 2008 Alex Woodie

Every company that manufactures stuff tries to accurately predict demand for their products. But for companies in the food and beverage industry, the equation is riddled with additional variables, such as the relatively short shelf life of products, that make the process more difficult. To that end, Lawson Software last week announced two new demand planning applications for its M3 ERP suite to help customers juggle these variables. It also announced a new business intelligence solution for food and beverage customers.

The two new products unveiled last week, called Lawson Planning Workbench for Food and Beverage and Lawson Stock Build Optimizer, are aimed at helping food and beverage manufacturers improve the medium- and long-term planning processes. Lawson also has a version of the Stock Build Optimizer for M3 customers in the clothing industry (which is another solid industry niche for M3, along with food and beverage), but the Planning Workbench is all-new functionality. Customers can start using the products immediately.

Stock Build Optimizer helps companies visualize their overall plan for building and maintaining an inventory of finished products across multiple factories, according to Lawson. The software enables customers to create long-range planning models using multiple “what if” scenarios that take into account several variables, including production capacity, seasonal demand, and the cost of labor and ingredients. Manufacturers can make better long-term decisions based on the results generated from Stock Build Optimzer models.

Consider Lawson’s example of a chocolate manufacturer getting ready for the Christmas spike in chocolaty consumption. Depending on variables, the company could elect to make extra product months in advance to prepare for an expected demand spike in December, with the possibility that it creates too much and the product must be thrown out due to spoilage.

Or the company could wait for demand to materialize, and then pay a little extra (through overtime or using subcontractors) to manufacture just enough to meet demand, thereby reducing the chance of spoilage. The “just in time” manufacturing approach could end up costing more if demand is unexpectedly low. Either way, the chances of making the most profitable decision are increased by having more usable information, which is the goal of the Stock Build Optimizer.

The other new product, the Lawson Planning Workbench for Food and Beverage, is aimed at helping manufacturers make better medium-range production decisions, spanning weeks or months into the future. The product does this by determining total coverage days for each product, and providing “what if” scenario planning related to market and production realities.

The Planning Workbench enables planners to analyze a full range of production variables, such as changes in customer orders, delivery schedules, employee shifts, and aging inventory. Armed with a better prediction of their production capabilities in line with these “what if” variables, planners can better prioritize production for specific products and orders to help avoid stock-outs, inventory write-offs, or the need to temporarily open additional production lines.

Both new products, which Lawson unveiled at last week’s InterBev 2008 Conference and Exhibition in Las Vegas, can help M3 (formerly Movex) customers in the food and beverage industry to be more profitable, says Vicki Griffith, Lawson’s marketing director for Food & Beverage.

“Food and beverage companies often must choose between losing sales if they don’t produce enough product to meet demand spikes, or writing off perishable products if they produce too much,” Griffith says. “These new products will help manufacturers analyze an increasingly complex set of supply chain variables to help them optimize production plans, lower inventory costs, and enhance customer service.”

Lawson also announced a new business intelligence tool, called Lawson M3 Analytics for Food & Beverage, that allows customers to gauge their company’s performance in five key areas–including sales, finance, procurement, production, and the warehouse–against 70 pre-built key performance indicators (KPIs), such as day sales outstanding, inventory turnover, and delivery performance; and 50 pre-built scorecard reports, including sales vs. budget, supplier performance, production variances, and customer debt.

One of the first M3 shops to test the new software is Pork Farms Limited, an English bakery that makes more than three million hot and cold pies and pastries every week. Pork Farms’ CIO Alan Webster ran one of the pilot projects for M3 Analytics, and was impressed with the product.

M3 Analytics “offered a fast, affordable route to the business intelligence we need to better manage our operations and customer service levels,” Webster says. “Lawson understands the specific challenges for the food industry, which means the KPIs and scorecards that matter to us are already there, ready for managers to use to improve our business.”