Steelwedge for the Telecommunications and Network Equipment Industry

“With Steelwedge, Tellabs was able to more accurately predict and react to future demand. This allowed us to maximize revenue and profitability while minimizing inventory.”
Christine Pfefferle, Director of Global Forecasting, Tellabs

In the telecommunications and network equipment industries, enterprise planning and performance management has come to the forefront of the corporate agenda. Improving the discipline, accuracy and timeliness of internal forecasting and planning processes increases revenue predictability and operating margins— the key to survival in the post-bubble highly-volatile economy.

In spite of large investments in business intelligence, supply chain management, demand planning, and forecasting solutions, many companies continue to struggle with product configuration complexity, postponement planning and inventory liability. The results are missed revenue targets, poor margins, excessive and inadequate inventory levels and reduced customer satisfaction. Despite a $40 million investment in supply chain software, a major telecom equipment company was faced with bloated inventories in some product lines and shortages in others. The company partially attributed its inventory problems to inaccurate demand forecasts generated by its new demand planning application. Quarterly earnings came in at 50% below initial estimates. And why?

In the current business environment, effective enterprise planning cannot rely on backward facing historic shipment information. Instead, it requires a structured, cross-departmental process that leverages

• channel inventory,
• new product planning,
• sales pipeline opportunity, and
• performance feedback data.

Steelwedge enables executives to accurately consolidate, predict, and profitably manage demand across the enterprise. It empowers them to evaluate alternate pricing scenarios, margin plans, product mixes, and configurations. Typical planning solutions in the industry project future dollar or unit demand at the top-line level, thereby making it all but impossible to consider margin issues and optimize profitability at the configuration level. Steelwedge technology goes several steps beyond the basic approach available until now, enabling dynamic prediction by leveraging multiple information sources, detailed bills of materials, and comprehensive product margin history. Once an organization can forecast and plan margins and revenue at the detailed level, analysts are in a position to optimize margins by performing subtle analysis on alternate demand planning and configuration scenarios. Through participative processes, sales, operations, marketing, and finance are able to work in unison toward a common goal of selling and delivering the most profitable mix of products. The result is enhanced corporate earnings and more efficient operations.
At Tellabs, the bottom-line impact of the Steelwedge solution has been over $10 million in annual savings. Come and evaluate Steelwedge as the foundation of your planning environment.

“We want to move from disconnected silos to a collaborative planning process that spans sales, marketing, finance and operations. Steelwedge will help us make this transformation.”
Len Couture, Chief Information Officer, Enterasys Networks