Manugistics set to launch new strategy for manufacturing based on Theory of Constraints

So-called ‘enterprise profit optimisation’ (EPO – pricing and revenue optimisation) and supply chain management software solutions provider Manugistics is about to relaunch its software and solutions for manufacturing, following its take-over of STG a few months ago. Says Sam Brown, Manugistics' Solutions Marketing Director for Europe: “We have been integrating OPT [STG’s TOC software, which stems from the Eli Goldratt development] into our whole suite, including our pricing optimisation.” And here we have it again: Goldratt’s TOC set to be offered as perhaps the centrepiece in Manugsitics’ approach to the whole manufacturing sector. See recent stories on The Goldratt ‘Necessary and Sufficient’ offer, with partners, SAP, IBM, Mapics, Lilly and the rest. Brown: “It is recognised that on the manufacturing side we’re not seen as particularly strong, and that was the reason for the purchase of STG. Now we’re able to offer more in the theory of constraints (TOC), advanced planning and scheduling manufacturing management area.” He points out that you can split Manugistics’ software and service offerings into strategic (high level, overall forward planning and simulation), tactical (mid to short term demand and hence manufacturing planning) and operational (capable to promise, profitable to promise, scheduling and the rest). “All three areas are touched by the OPT suite. The supply side sits on one side of the equation, and demand on the other. Manufacturing strategy sits in the middle.” And he adds: “EPO is not just right product right time, right place, but also right price. Manufacturing is the meat and bones sitting in the middle of this.” Meanwhile, Manugistics says that its pricing optimisation solutions (EPO itself, launched late last year) have now been extended across industry sectors where companies have most to gain from increasing revenues and enhancing margins from the system. Claiming revenue improvements of two to eight per cent, Greg Cudahy, the firm’s executive vice president, says industries covered now include: apparel, footwear and textiles; automotive; chemical and energy; communication and high tech; consumer packaged goods; consumer and industrial durables; and office equipment and supplies. Cudahy: “Because more effective pricing through our PRO solutions can be accomplished utilising existing assets, these revenue increases can occur with little change in costs – which can enable the majority of the gain to drop directly to the bottom line.” Manugistics defines pricing optimisation as “the disciplined process of determining what prices to offer for different products through different selling channels to different market segments. For companies that utilise pricing optimisation, the goal is to enhance profitability and meet corporate objectives such as market share or revenue growth.”