Building A Better ERP/SCM Benchmark
IT managers know that Supply Chain Management is easier said then done. And having a standard performance benchmark would make life easier too. That's why HP and its ERP and SCM partners have been working overtime in the HP Development Alliances Lab. The results speak for themselves.
Supply-chain Optimization. Decision Support. Sales Tracking And Forecasting. Thesesolutions, as they have been implemented within corporate enterprises, have influenced achange in how ISVs work with HP. Consequently, HP has formed alliances with supply-chainsolution providers: i2 Technologies, Manugistics, Numetrix, Logility, Paragon and SynQuestas well as ERP vendors Baan, J.D. Edwards, Oracle, PeopleSoft, QAD and SAP.
These alliances enable teams from HP and its partners to convene at HP's DevelopmentAlliances Lab in Cupertino, Calif. and develop benchmarks that are important for providingassessments of performance in supply-chain applications. These benchmarks are unique inthat they represent a bona fide, complex supply-chain and incorporate sizablebill-of-material data models.
This is a significant improvement because the HP benchmarks do not rely on smallerdatabases that necessitate extrapolations of performance. "IT managers see anincreasing number of instances and transactions per second running across internal companyboundaries and wonder about the overall effectiveness and integration of thesolution," explains Christine Fronczak, HP's Supply-Chain Alliance marketing manager."Serious collaborative programs in which software solution providers work with HP todevelop new ways of pleasing application users earn their attention."
Results of the HP/vendor benchmarks, as they are completed and announced, establishperformance standards for corporate IT planners in various process-specific categoriesthat have not been accurately gauged before: regenerative, optimized planning; availableto promise (ATP) response time; and Internet-based collaboration response time.
"It's the nature of supply-chain solutions to be CPU-intensive," notesFronczak. But it's just one reason the server is a linchpin. "There may be hundreds,upwards to thousands of users in a client-server environment. And all users gauge serverresponse time each time they run various applications or modules."
A RISING STAR
Consider the situation of EchoStar Communications (Littleton, Colo.): Just two yearsago, its vertically aligned solutions for engineering, manufacturing, distribution andfinancial applications crashed daily, forcing users to develop their own work-aroundmethods. EchoStar placed a high priority on a cohesive information architecture thatbecame a major cooperative effort between EchoStar, HP, Oracle and consultant groups (seeIT=Inspiring Teamwork And Technology, HP Professional, November 1998).
Within the framework, EchoStar encapsulated entire Oracle applications, including theFinancials modules. Collectively, these comprise a stable enterprise solution, spreadacross nearly two dozen HP 9000 D- and K-class servers and 45 HP NetServers, effectivelysupporting over 4,000 nodes in the U.S. and Europe.
In May 1997, EchoStar overhauled its distribution processes for hardware products andsignificantly expanded its customer service center, thus illustrating another point aboutthe new supply-chain environment: It's feasible to keep on making things better, addingnew point applications as managers tackle subsequent process bottlenecks. The new systemprovides automatic calculation of sales incentives and commission payments to dealers anddistributors so efficiently that it's now possible to cut more than 10,000 checks permonth where previously, only 2,000 per month was feasible. The Oracle-based system alsoimproves dealer statements by providing a secure Web-based application to handle dealerand distributor queries for payment and accrual information.
Smaller companies, too, are opening up supply-chain bottlenecks through extended ERPsolutions (see Good ERP Comes In Small Packages, HP Professional, November 1998). DigitalComputer Integration Corporation (DCI; Plano, Texas) recently completed its deployment ofBaan's integrated "solutionware" for manufacturing, distribution, finance andenterprise management. Using a realistic budget in dollars and manpower for this small,$20 million company, DCI completed its deployment in just 11 weeks.
This rapid deployment of the Machine Building Industry solution on a HP LX ProNetServer was essential for fixing process bottlenecks and Y2K issues throughout thecompany. DCI was, in fact, the pilot site for this specialized solution that's enablingBaan to reach into small- and medium-sized companies. The solution is ready to run,incorporating pre-configured business process templates tailored to specific verticalindustries.
Oracle, Baan and other extended ERP solutions such as those from J.D. Edwards,PeopleSoft, QAD, Lawson and SAP are comprised of a dozen or so modules. These modulesencompass processes from database, general ledger, accounts payable, assets, accountsreceivable, order entry, purchasing, inventory management and scheduling, the sum of whichis designed to facilitate the highest levels of data resource usage.
ERP vendors extended their solutions with supply-chain capability by developingintegrated modules, or through acquisitions. ERP vendor PeopleSoft, for example, acquiredRed Pepper for planning and optimization products. Baan acquired Berclain, for specialpurpose supply and demand tools that extend its Baan IV solution suite. Oracle haspartnered with IMI and Manugistics to develop Oracle CPG, an integrated solution for theconsumer product goods industry.
The HP/vendor lab teamwork also applies to future activities. It will benefit corporateIT groups who can use benchmark data to build capacity planning models to enable accurateprediction of performance on new HP 9000 servers. They can answer questions related to howchanges in application load parameters (i.e. number of SKUs, length of nightly batchwindow) will affect throughput, timing of nightly runs and ability to handle periodic loadincreases, or determine how changes to the platform environment (i.e., number of CPUs,amount of RAM) will affect SCM application performance.
The hallmark of today's network-minded IT community is the flourishing educationalactivity of software and server or platform providers, consultants, universities, usergroups and executive forums all working to promote user productivity and proficiency.Customizing packaged ERP applications with user interfaces for company-specific purposesis not nearly the time-consuming, expensive process it once was.
Providers offer suites of tools for loading/integrating data from proprietary databasesinto new systems as well as programs attuned to the needs of small- to medium-sizedcompanies. They're also setting the stage for e-commerce transactions.
NEW LINKS FOR ERP SUCCESS
When solution providers enlist with other vendors of enabling technologies, IT executives see a chain reaction and positive trends:
* Creation of effective, working alliances among software and server providers, consultants and user groups promotes far greater integration of solution components than was previously possible.
* The stage is set for surprise-free deployment of solutions; HP and ven- dors providing certified server/software solutions, i.e., the configura- tion is pre-packaged, tested and ready-to-run.
* Development of realistic SCM-specific benchmarks. Working with HP's Development Alliances Lab teams the servers and HP-UX operat- ing system are tuned, solutions made more "bullet-proof," all leading to optimum performance and reliability.
* Solutions code supports server scalability, can take maximum advan- tage of main memory and additional CPUs as number of concurrent users increases.
* Greater ability to integrate legacy data resources and third party database applications. Applications are available that meet industry- specific needs.
* Streamlined development methods, availability of industry templates, custom configuring is not the problem it once was and deployments are made on-time, in-budget. Applications are easier to tune and squeeze out bottlenecks.
* Executive forums, user groups, large pool of consultants, university research groups (leveraging the emergent Alliances) build user profi- ciency.
* Pushes ERP/SCM to wider circles of users. The integration of these SCM solutions with popular PC applications such as MS Excel affords benefits for less sophisticated users.
* Respective sales teams, both HP and the software solution provider now have a repertoire of best-practices learned from Business Process Reengineering of early adopters. Many of these best practices are built into software tools for designing/optimizing the supply-chain, even for industry-specific process requirements through use of tem- plates.