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.

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 www.adexa.com or send us an email at info@adexa.com  

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 HR@adexa.com  

Ron Wilson

Marketing Director

888-300-7692 (Ext. 138)

rwilson@adexa.com