I2's Sanjiv Sidhu on SCM strategies

Sanjiv Sidhu, the co-founder, chairman and interim CEO of Dallas-based supply chain management software maker i2 Technologies Inc., outlined a number of company initiatives this week at the Directions 2004 user conference here in Orlando. He also took time out to elaborate on those issues with Computerworld.

Excerpts from that interview follow:

Can you give us an update on the company's overall health? We've been able to become much more efficient as a company. Our costs are now one-third what they used to be at their peak. We feel very good, despite cutting costs, that our quality has gone up, and customer satisfaction has gone up. We have a whole new set of solutions, and we're very excited. We feel good about our new opportunities and new solutions.

How do you compete against the suite vendors, such as SAP AG, that can offer a single one-stop shop for applications? That whole argument is flawed. Less than 50 percent of the (supply chain management-related) data we need comes from enterprise resource planning systems anyway. We are the broadest suite provider for transportation, product outsourcing, factory planning and demand planning. When you put it all together, our suite is broader than anyone else's. I don't support the argument of one-stop shop, and if I do, i2 is more justified to be called a one-stop shop for the supply chain.

Can you summarize your integration strategy? We are fully committed to the Web services architecture and are the leading supply chain solution that is Web-based. We're also saying our intention is to provide tools for the agile enterprise. What we're noticing is that no two supply chains are equal. What people want is a similar capability they have when buying computers or cars -- you can configure them to your needs. What we're developing are components people can use to build workflows for their own requirements using a Web services architecture.

In your keynote speech, you drew a distinction between a supply chain forecast versus a plan. Can you elaborate? Say my (sales) forecast is to sell 300 units in a month. It's like the weather forecast: You don't expect it to be (exactly) right. The best companies like Dell will say, "My plan is to sell 300, then we'll do all the things necessary to make sure we sell that amount." But if in the first day they sold only five and they should have sold 10, then they will find out what was the root cause and decide what actions they should take so that they will sell 300.

Superior-functioning supply chains live and die by the plan. We're providing the tools for a company to form a realistic plan with visibility into all the data that drives it, so that it (isn't) dead on arrival. Most plans are DOA. The tools allow companies to track and plan and execute correctly, and what is core to the tools is that you can do root-cause analysis and find out what is at the bottom of the problem and take action, such as (suggesting) you might want to use air freight versus ground transportation.

What's your take on radio frequency identification tag technology? I think it will be quite a big deal, once it passes the adoption chasm.

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