Hot off the heels of recent success in China, Palisade continues to establish a reputation for excellence in Eastern markets—this time in Japan. Hitachi Solutions East Japan, Ltd., a core IT company of the Hitachi Group, which employs some 400,000 people worldwide, has selected Palisade’s @RISK Developer Kit to help manage supply planning.
With its headquarters in Sendai City in Miyagi Prefecture, Hitachi Solutions East Japan Ltd. is responsible for data and risk analysis of supply chain management, production, and sales & inventory planning and management. Analyzing these elements can be tricky, particularly when it requires forecasting demand and prices of raw materials. Using the @RISK Developer kit, Planning Department Research Division Head Masaru Tezuka and his team were able to do these analyses.
There are a wide variety of risks in the manufacturing industry, including fluctuating variables such as demand, price, and foreign exchange. For demand fluctuation, supply is determined by demand forecasts. If the forecast underestimates demand, a supply shortage results, causing the company to miss opportunities to increase sales. If the forecast overestimates demand, inventory or disposal costs may follow. Price and currency fluctuations are also important factors for risk management in the manufacturing sector, and the improvement of forecast accuracy through risk analysis is essential to mitigate these risks.
For these problems, Hitachi wanted to develop a high level stand-alone GUI (graphical user interface) to visualize production and inventory conditions, while also incorporating @RISK’s excellent risk analysis functions. @RISK’s Developer Kit made it easy to tailor the program to Hitachi’s needs and desires. Through the use of tornado diagrams, Hitachi was able to understand the effects on profitability based on which product is produced or sold at what time, and observe the overall situation for each product.
In his case study for Palisade, Dr. Tezuka concludes, “It is crucial to develop strong risk forecasting and risk analysis…@RISK is a critical part of that process.”
Read the case study here.