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Reigning in Unruly Distribution

Analysts may talk up demand-driven supply chains, but manufacturers that rely on multitier distribution networks struggle for control. When high-value or regulated goods such as pharmaceuticals are involved, manufacturers have to enforce policies and rules about partner and customer access to information and inventory.

Analysts may talk up demand-driven supply chains, but manufacturers that rely on multitier distribution networks struggle for control. When high-value or regulated goods such as pharmaceuticals are involved, manufacturers have to enforce policies and rules about partner and customer access to information and inventory.

Trendspotting

The Office of Management and Budget has called on federal agencies to implement an Earned Value Management (EVM) policy for all new IT projects by year end. EVM is a methodology for contin-uous assessment of project performance compared to original plans and goals. The trouble is, agencies aren't ready for EVM according to a Primavera Systems poll of government execs. 60% say EVM has value, but only 37% had implemented it, while 25% weren't familiar with EVM. Training and resources are now in demand.

Enter Channel Commerce Management (CCM), a new means by which organizations can gain control and capitalize on trends. CCM analyzes data from EDI- and Web-based order streams and other sources in real time &mdas; before you accept an order. "Drawing a precise picture of the state of a channel, as well as all its demand and distribution attributes, will help enterprises to determine optimal courses of action," says analyst Stan Elbaum of Aberdeen. The ability to capture historical and current data prior to making commitments sets CCM apart, he says.

Among the pioneers of CCM has been Edge Dynamics, which has merged business intelligence (BI) with order management to predict channel trends and enforce policies for pharmaceutical manufacturers. The company's solutions have been tapped by Bristol-Myers Squibb and King Pharmaceutical, among others.

Companies typically apply order management systems to the job of controlling multitier distribution networks, but these conventional technologies "do not enable manufacturers to improve real-time pricing and fulfillment on a line-by-line and order-by-order basis," says John McGrory, Edge Dynamics' president and CEO. "Nor do they provide information tailored to the pharmaceutical industry...to recognize if deductions and charges are correct."

CCM acts as a preprocessor to order management systems, looking beyond inventory to factors such as seasonality, price fluctuations and customer profiles to optimize decisions. That could mean keeping drugs from falling into the wrong hands or maximizing profits on high-value consumer products.

— Susana Schwartz