Some years ago in the Supply Chain Space, when i2 Technologies and Manugistics were talking about ATP and Capable to Promise, I was trying to think up something unique, competitive, and innovative. I was working at American Software Inc/Logility at the time.
After thinking hard about how consumer goods companies do ATP, I came up with idea of “profitable to promise”. This idea was not, despite its name, focused on “quantity times price less cost equals profit”, but it was actually about opportunity cost. The reality is that firms always accepted orders they had little chance of performing too. They got better at knowing which orders would be high risk, but few organizations ever say “no” to a customer. So the idea I came up with was what if a real time optimization engine could look at the “soft” resource allocations for un realized orders (ie forecasts) for less profitable channels and customers, and compare it to the potential profit that is thinking about placing an order on the phone? What if forecasting and forecasting accuracy and pegging were to be added to CTP? Cool idea I thought. Following the leadership of my friend and colleague Chuck Murphy, I created a mock up Visual Basic. I showed it to some leading consumer goods companies; you would know the names. They LOVED the idea – initially. Over time they moved away from it. It was not likely to be accepted since executives would not want to be so exposed. They would still never say “no” to a customer so this product was just too far ahead of what firms could adopt at the time. It was politically too risky.
So this story came to mind when a customer used the phrase, “we are thinking how to run our company at the speed of Hana”. What if Hana is just too fast? Can you really change your production orders in seconds, if Hana spots a problem, or an opportunity? Can you really change your promotion plans in the wink of an eye? Clearly Hana can create some interesting opportunities – but can Hana be too just too fast for some companies, due to physical, cultural and political constraints?
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