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Since its conception in 1988, i2 Technologieshas been about the business of creating valuefor its customers. Over the past decade, i2 cus-tomers have realized enormous value from i2solutions, including dramatic increases inrevenue and customer satisfaction, reduc-tions in inventories, improved capacityutilization, and forecast accuracy improve-ment, to name just a few. In fact, i2 customershave received almost $30 billion in auditedvalue to date, according to the industry’s onlyvalue delivery audit, conducted annually by -Miller-Williams, Inc.

As the undisputed leader in supply chainmanagement with more than 1,000 customers,and 480 go-lives in the past year alone, i2 isknown for its market leadership and vision.But i2’s customers have demanded more.Rather than focus solely on its core compe-tency in supply chain management, cus-tomers have led i2 to leverage its knowledgeand proven results in supply chain manage-ment solutions to those that directly impactand are impacted by supply chain manage-ment applications. Thus, in the mid- 1990s i2began to develop and market solutions formanaging demand and orders as well as man-aging relationships with suppliers and part-ners in a collaborative environment, and thevalue chain management paradigm was born.

A very natural extension of supply chainmanagement, value chain managementincludes solutions for managing customer-facing, demand-driven processes (demandchain management); factory, supply, andtransportation planning processes (supplychain management); and strategic sourcingand procurement processes (supplier rela-tionship management). Together these solu-tions manage the planning and execution ofintra- and interbusiness processes across thevalue chain, with the mission of reducingvalue chain complexities and increasing over-all velocity. The results of companies acrossall industries have been phenomenal, withbottom-line impact achieved through increasesin revenue and customer satisfaction com-

bined with operational efficiencies that havereduced costs for all value chain participants.

In a May 2002 report, AMR Research definesdemand chain management at two levels:

“It starts with the day-to-day strat-egy, processes, tactics, and technol-ogy to create demand that convertsnew products, existing inventory,available capacity, and supplychain competencies into revenue.However, the bigger picture is totransform it into a demand-drivenorganization where product develop-ment, pricing, and supply chaindesign decisions come from currentand future customer demand.”

Companies such as Best Buy, Caterpillar,Cypress Semiconductor, Dell, Halliburton,Iomega, Metso Minerals, Panasonic, TaylorMade-adidas Golf, Samsung, Sony, SunMicrosystems, Toshiba AIS, UPM, and Whir-lpool have embraced the principles AMR out-lines for demand chain management to unitethe independent application areas of CRM,enterprise resource planning (ERP), and sup-ply chain management (SCM). By unitingtheir CRM, ERP, and SCM initiatives throughdemand chain management, companies havebrought operational synchronization andsupply chain responsiveness to the cus-tomer-facing processes of their demandchains: demand management, demand creation, order capture, and order fulfillment(Figure 1). The focus of enabling these fourprocesses includes:

Demand ManagementThe collection and analysis of all historicand current sales and marketing informa-tion to accurately forecast demand and thusprepare the entire value chain to cost-effec-tively deliver to that demand. Key applica-tion areas of demand management includedemand network design, sales and opera-tional planning, demand planning, anddemand collaboration.

Demand CreationThe demand shaping tactics employed bythe value chain to maximize demand forthe right products based on constraints inthe supply chain. Key applications ofdemand creation include price optimiza-tion, promotion optimization, and cam-paign management.

Order CaptureThe automation and optimization of quotingand selling to customers across multipleinteraction channels (Web, EDI, call centers,mobile, etc.) with the objective to convertdemand into opportunities and opportuni-ties into orders or contracts. Key applicationsareas of order capture include quoting, con-tract creation, pricing, configuration, guidedselling, order capture, and order promising.

Order FulfillmentThe coordination of the multiple systems andpartners involved in fulfilling orders to meetcustomer expectations of promised time-frames, quality, and visibility. Key applicationareas of order fulfillment include order sourc-ing and brokering, order state and event man-agement, order shipping, inventory manage-ment, order status, and reverse logistics.

i2 Demand Chain Management solutionsare a cornerstone of the company’s valuechain management solution set. With solu-tions for managing demand, creating andshaping demand, capturing orders acrossmultiple channels, and coordinating order

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Uniting CRM, ERP and SCM to MaximizeProfitability and Customer Loyalty

i2 is the leading provider of value chainmanagement solutions that help companiesplan and execute all the activities involved in managing supply and demand. Thesesolutions span the entire scope of valuechain interactions, including demand chainmanagement, supply chain management,and supplier relationship management.

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fulfillment, i2 has the most comprehensivesolution set for demand chain managementin the market today. According to KentAllen, Research Director of E-Business forthe Aberdeen Group: “i2 is uniquely posi-tioned as the leader in the demand chainmanagement market based on a defendablevalue proposition and robust, proven solu-tions that have already delivered returns toa stable of Fortune 1000 customers.” Therobust solution set that Mr. Allen referencesis based on the four key solution areas fordemand chain management: demand man-agement, demand creation, order capture,and order fulfillment. The i2 Demand ChainManagement solution includes a family ofapplications that power the planning andexecution processes of businesses acrossthese four areas.

Demand Managementi2 Demand Planner is a multidimensionalplanning environment that helps enter-prises create, manage, and optimize futuredemand. The solution uses OLAP (onlineanalytical processing) data structures tomanage complex demand forecasting prob-lems for an enterprise or an entire value

chain. To generate a forecast, i2 DemandPlanner provides a variety of options rangingfrom simple statistical techniques, such asmoving averages, to multiple regressions, to sophisticated models. One of the mostpowerful features of i2 Demand Planner is its automatic intervention detection capabilities, which detect and correct out-liers and structural changes to the data. The result is more robust models andgreater forecasting accuracy.

i2 Demand Collaboration enables the com-munication of projected demand signals fromthe buyer to the supplier and the committedsupply back from the supplier. The solutionsupports analysis of the demand and supplypicture based on negotiated procurementcontracts. It provides buyers advanced visibil-ity into constraints and impending materialshortfalls, and allows them to quickly evalu-ate alternatives to resolve the issues.

i2 Merchandise Planner is a three-dimen-sional (product, channel, time) decisionsupport tool designed for retailers and manufacturers. This is a scalable, end-to-endplanning solution allowing top-down, bot-tom-up, middle out planning, or a combina-tion of each, and can accommodate a

company’s own merchandising planningprocess. i2 Merchandise Planner integratesand then reconciles financial, merchandis-ing, assortment, and store plans. Once plansare created it helps monitor, evaluate, andadjust the plan to accommodate currentrealities.

i2 Allocation Planner enables an organi-zation to generate reservations for saleshierarchies and channels, and match supplywith backlog demand applying appropriateprioritization rules. The solution apportionsforecast, production, component inventoryincluding capacity, and inventory items tosatisfy customer forecasts while respectingconstraints of backlog orders. The allocationplanning module optimally allocates shortsupply to multiple demand sources, consid-ering capacity and material constraints.

Demand Creationi2 Category Price Optimizer is a pricing decision support system used to optimizeand manage base prices for items in basicmerchandise categories (such as cereals ordetergents). This solution is designed tomaximize profit or revenue for the overallproduct category by optimizing prices to match demand, while ensuring price con-sistency across products in the category,ensuring a competitive price position, andpreserving brand equity and brand loyalty.In turn, i2 Category Price Optimizer helpscompanies avoid erratic and unpredictableconsumer purchasing behavior due to pricing inconsistencies across the category,loss of brand image due to overly aggressiveprice cutting, and ultimately loss of sales andmarket share due to noncompetitive pricing.

i2 Promotions Optimizer is designed toaddress the challenges companies face whenpromoting their products. i2 PromotionsOptimizer helps companies intelligentlydetermine which products to promote, whichpromotional tactics to employ, the optimalprice incentive to offer, and when to run thepromotions so they can meet the overall

Price Management and Execution

Price Management and Execution

SolutionAreas

SolutionFunctionality

i2 DCM

Order Capture

Demand Creation

Order Fulfillment

Quotation and Order Capture

Category Price Optimization

Order Sourcingand Brokering

Return and Service Order Capture

PromotionOptimization

Order State andEvent Management

Catalog Management

Markdown Optimization

OrderShipping

ReturnsManagement

Financial Settlement

Demand Management

DemandPlanning

DemandCollaboration

MerchandisePlanning

AllocationPlanning

Configuration and Bundling

OrderPromising

Inventory Management

Customer/Partner Interaction Channels and Portals(Web, Call Center, EDI, Mobile, email, etc.)

Figure 1 i2 Demand Chain Management Solution Footprint

Solution Provider

Sanjiv Sidhu Founder, Chief Executive Officer, andChairman of the Board of Directors

Sam Nakane Chief Operations Officer

Bill Beecher Chief Financial Officer

Pallab Chatterjee Executive V.P., Solutions Operations

i2 Technologies, Inc.11701 Luna RoadDallas, TX 75234Phone 469.357.1000Toll-free 800.800.3288 (U.S. and Canada only)Fax 214.860.6060www.i2.com

☎ Pankaj SehgalDirector, Solutions MarketingPhone 469.357.6160pankaj_sehgal@i2.com

Defying the Limits • 77

demand plan. The solution is also used to report on theeffectiveness of a promotion.

i2 Markdown Optimizer is a decision supportsystem that enables organizations to maximize prof-itability by creating optimal pricing recommenda-tions for clearance of excess inventory or excesscapacity. An optimal pricing strategy is importantbecause discounting too slowly can leave too muchinventory at the end, requiring a last minute firesale. Equally, discounting too quickly can leave noinventory and thus empty shelf space before thedesired clearance date. i2 Markdown Optimizerdetermines both the timing and the depth of pricediscounts by considering inputs such as sales, forecasts, prices, costs, elasticities, and businessconstraints. i2 Markdown Optimizer maximizes netmargins, reduces leftover inventory, and bringsconsistency to the overall markdown process.

Order Capturei2 Sales Configurator supports the customer-specificconfiguration of complex products by generating fast,accurate sales quotations. i2 Sales Configurator can bebased on constraints (e.g., allocated inventory andlogistics) and rules (e.g., compatibility and eligibility).As an interface between sales and manufacturing, theapplication allows product developers to documentconfiguration rules for multi-tier sales channels.

i2 Attribute Configurator guides customersthrough the attribute-based selection of complexproducts and services to meet their unique require-ments. Customers are provided one-to-one personal-ization and guided by their most important attributesacross multiple vendors in their sequence, answer-ing the question “can we make it?” (capability). i2Attribute Configurator is an ideal solution when theproducts and services need to be revision controlled,linked, and/or described by ranges and tolerances.

i2 Sales Pricer is a robust solution for managingcomplex pricing strategies across multi-tier saleschannels. The solution calculates prices, profit mar-gins, and currencies, all in real time. In addition, i2Sales Pricer provides maintenance/administrationof pricing through the entire product lifecycle.

i2 Demand Fulfillment enables organizations tointelligently match supply with demand by making appropriate product mix and sourcing decisions. i2Demand Fulfillment is used for performing the fol-lowing key functions including product forecastmaintenance, allocation management across salesand product channels, Available-to-Promise(ATP)/Capable-to-Promise (CTP) functionality, andorder promising and order priority management.

Order Fulfillmenti2 Distributed Order Management is a solution tomanage the capture and fulfillment of customerorders across the multiple channels and enterprisesof the value chain. i2 Distributed OrderManagement supports the entire order processacross a distributed environment, including: ordercapture and validation, order sourcing and broker-ing, order state and event management, order ship-ping and status, invoice creation and dispute reso-lution, and financial settlement. Additionally, thesolution serves as the framework for i2’s multi-channel quoting and order capture, inventory man-agement, and reverse logistics solutions.

Distributed Inventory Management providescompanies inventory visibility across a multi-divi-sional or multi-enterprise value chain. A config-urable state model allows one to track inventorypositions in a time-phased manner with the abilityto track ownership of the inventory. Coupled withconfigurable alerts and exception managementcapabilities, it enables role-based, intra- and inter-enterprise analytics, decision support, and fulfill-ment workflows.

i2 Reverse Logistics Manager supports theefficient execution of complex after-sales service,returns and reverse logistics business problems.The solution allows intelligent order processing and tracking based on customer profile, servicelevels, warranty entitlements, contract terms andpricing structures. Additionally, i2 Reverse LogisticsManager provides a single face to the customer by facilitating interactions with outsourced servicepartners. ■

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