A technical framework for sense-and-respond business management

Abstract

In this paper we present a technical framework that supports sense and respond (SaR), the approach that enables an enterprise to adapt to a rapidly changing business environment. To implement the SaR approach, an enterprise proactively monitors trends and uses effective decision-support tools to help it act in a timely manner. We describe two pilot projects in which we implemented SaR prototypes and applied them to solve business problems. In the first pilot project we helped the IBM Microelectronics Division deploy an automated inventory management system based on our inventory optimization model. In the second pilot project, we helped the IBM Personal Computing Division deploy a SaR system in support of demand/supply conditioning. One of the components of this SaR system is an order trend model that provides early warning of constraints and excesses in the supply chain and helps make demand/supply conditioning more effective. Early results from these projects are encouraging and show that significant gains in profitability are possible.