Supply Chain Planning Newsletter

April, 2014

Lead Article:
From S&OP to FS&OP


It was not long ago that the focus was changed from individual machines and operator work studies to a broader factory-wide throughput. Soon thereafter that was complemented by optimizing the Enterprise and then the entire supply chain. In the last decade, it was recognized that sales and operations, as well as inventory, need to work hand-in-hand. Hence, S&OP has been at the forefront of all the leading edge companies. However, as of half a decade ago we realized that S&OP by itself without a financial dimension is not enough. What is important is that decisions in operations are made based on objective financial implications. To this end, Financial, Sales & Operation Planning (FS&OP) became the focus of our core technology. This approach implied that "operational decisions were made based on financial consequences."


This is a powerful concept. No more subjective planning of what to make where to make it, who gets higher priority, how much inventory we keep and so on. Every decision can be modeled and the financials can be examined and therefore decide what is best for the company. Under such scenarios, the business would make a conscious decision to forgo some profit for higher market share, or accelerate the growth of a new product at the cost of phasing out an old one even though a larger write off in inventory would result. And finally, one could decide on the right product mix and where to make them based on higher gains in profit and lower costs and better margins. In the absence of the financial element, it is possible to merge sales and operations closer but the impact on the business can only be subjective and not as predictable. FS&OP technology offers an environment where the future can become more predictable and choices are made more apparent. Different strategies can be adapted and financial implications can be examined. All based on rigid mathematical optimization techniques and fast enough to go through many different iterations in real-time. It is time to add the Financial dimension to your S&OP.

How Adexa customers are using inventory optimization to meet customer demand

Most companies that need to decide how to allocate inventory to meet customer demand have the challenge of matching an available inventory of identified part numbers with a clearly defined demand for those part numbers. The problem for some Adexa customers was the fact that their product specifications was not fully described by the part number but describable by addition of attributes. Examples of this are the speed of a microprocessor, the storage capacity of a memory device, or the acceptable wavelength of a light emitting device all binned out in categories. When the incoming order has choices and ranges in the inventory acceptance criteria the selection of the best inventory to meet demand becomes a more difficult problem of determining what inventory should be used to satisfy each customer demand. The problem becomes even more complex when inventory can be mixed together to meet an overall specification limit such as speed ranges, and visible light color specifications.


Adexa customers have moved away from their ERP systems and spreadsheets, and have put our optimization solutions to work to determine how to best decide the allocation of inventory to satisfy customer orders. Instead of using simple rules to decide which inventory bins, in which percentages should be used to achieve a given combined specification, the optimization translates the specifications into constraints. This enables the optimizer to determine the best use of inventory to meet demand. The system can be configured to consider various optimization objectives like minimize inventory, maximize shipped units, or maximize revenue, which in turn will drive different allocations.


The results for our customers have been impressive. They have experienced revenue increases in the order of 3% to 5%, increases in on-time performance of 10% to 15%, and inventory reductions of 10% to 30% through the use of optimization. For further information, refer to our web site at or send us an email at  

Adexa Webinar

"New Capabilities of the Adexa Supply Chain Planner"
April 22, 2014 at 1:00 PM EST / 10:00 AM PST

Duration 1 hour.

Sign up information will be emailed.  This session is for Adexa customers only


This webinar will highlight the new capabilities that have been added to the Adexa Supply Chain Planner (SCP) over the past couple of years.  The session will cover the business needs of our clients that drove the requirements, and the way the application met their business needs.  For each capability highlighted, there will be an overview of the business pain, and a demonstration of how the enhanced solution empowered our clients and the users of the application.  A question and answer session is planned at the end of the webinar, so that attendees can ask specific questions on how the new features may apply to their  particular business needs.   We invite you to join us to learn and participate in the informative session.  Please look for official announcement in your inbox.

Adexa is on the Move


After almost 20 years in our previous location, our HQ has now moved to a new location which is again conveniently located near LAX International airport and next to the Los Angeles Hilton Hotel.


Our continued success and growth is only made possible by our clients and partners, as well as loyal Adexans who have been with us for so many years. We thank you for your support and look forward to serving you for many more decades.


Our new address is: 

5777 Century Boulevard

Suite #1100

Los Angeles, CA 90045


Adexa is Hiring


Adexa is looking for exceptional individuals in a number of different departments including consulting and professional services, marketing and sales. The applicants are expected to have graduate degrees or equivalent thereof in one or more of the following: Operations Research, Supply Chain disciplines, Industrial Engineering, and/or computer science with at least 5 years of experience in the field. If you, or someone you know, interested in any of the above positions, please contact  


Adexa Trivia (20th anniversary edition)

Our name changed 14 years ago but our commitment is still the same.


Did you know that Adexa used to be called Paragon Management Systems? You probably knew this. However here is something you did not know: The very first name of the company was NP-Complete! Why did we call it NP-Complete? Because this is a class of problems (such as planning and scheduling) that are intractable and extremely hard to solve in a reasonable time on even the fastest and latest computers in the world.


Adexa's name


Do you know the origin of the name Adexa? It comes from Adaptability and Dexterity. We adapt to any environment because of our ability to perform Attribute Based Planning. A unique feature of Adexa applications.


Over 20 years serving our customers loyally-just ask the biggest contract manufacturers in the world!


For the past 20  years, Adexa has served some of the largest and most complex  supply chains in the world, including some of the most well-known companies in Semiconductors & High Tech, CPG, Textiles & Apparel, Heavy Industries, etc.  Over the years, billions of dollars in goods and products have been  optimally planned, scheduled, and delivered to the market on-time with Adexa solutions.  We would like to thank all of our customers for their partnership and trust in Adexa, for the past 2-dacades. We look forward to many more.   

For more information contact us at any time:

Ron Wilson

Marketing Director

888-300-7692 (Ext. 138)