JDE Fulfillment App Efficiently Allocates Constrained Supply

September 28, 2010 Alex Woodie

When inventory gets low and demand stays high, what do you do? You could just fill orders as they come in until you run out of product, but that would upset your best customers and potentially violate service level agreements. With the new JD Edwards EnterpriseOne Fulfillment module unveiled last week at Oracle‘s user conference, companies can rely on software to automatically allocate constrained products in the most efficient and profitable manner.

In this hyper competitive supply chain age, having a constrained supply of a particular product is both a blessing and a curse. On the one hand, high demand for a hot product is what every company wants. It’s a signal to ramp up manufacturing or deliveries, and increase prices, thereby boosting revenue and profits. On the other hand, when shelves and warehouses run out of popular products, sales are lost and customer relations are damaged.

All companies in goods-driven supply chains strive to achieve a balance between supply and demand. The question, therefore, is how to achieve it. With the new JD Edwards EnterpriseOne Fulfillment Management, Oracle is providing another way.

The new Fulfillment product is specifically designed to handle situations where orders for finished goods exceed the on-hand supply. It uses a rules-based approach to dole out advice on how best to allocate the remaining products before the warehouse can be replenished from the factory in Ohio or (more likely) the boat from China.

Take, for example, the very real situation of a late spring snowstorm hitting the high mountains of Southern California. Demand for tire chains, snowshoes, and gloves suddenly skyrockets as people in the cities flock to recreate in the fresh snow. However, all of the sporting goods stores have–as the old replenishment book instructs them to do–already cleared out the winter goods in preparation for the long hot summer (which, incidentally, is only materializing now, in autumn).

What do the stores and their regional distribution centers (DCs) do? If they have the new EnterpriseOne Fulfillment module, they would have a game plan in place that tells them what actions to take. The software will automatically prioritize the existing orders based on past orders and information about the customers, such as whether they are a high priority customer or a low priority customer.

If a service level agreement is in place, Fulfillment takes that into account, as well as any potential penalties that may result from not meeting service level obligations. The software takes all of this into account generates a plan for fulfilling the orders in the most profitable manner that is also the most likely not to upset high priority customers.

Lyle Ekdahl, who took over the position of Oracle’s group vice president of the JD Edwards division nearly a year ago after Lenley Hensarling stepped down, says Fulfillment adds “significant new business value” for EnterpriseOne customers. “By providing the ability to prioritize the assignment of inventory based on user defined rules, we are able to help our customers optimally allocate their products to their most important orders, reduce fulfillment costs, and improve customer service,” Ekdahl says in a press release.

In other JDE news from OracleWorld, Oracle announced a new release of the Primavera project portfolio management (PPM) software, which is designed to help companies plan and execute projects and programs across their enterprises. Primavera P6 Enterprise PPM 8, as the new product is called, now features an entirely Web-based interface. The software integrates with Oracle’s E Business Suite and JD Edwards EnterpriseOne ERP systems.