Demand Forecasting, Sales Planning, Big Data Analytics & IBP
Companies at the basic level of demand planning should first implement a basic stat forecasting tool and define a baseline forecast, hire a demand planner and establish a formal monthly process.
Your best volume month could be your most dangerous data point for your forecast model… Volume spikes clearance sales You just sold off your slow moving and dated inventory in a … Read More
Fast planning isn’t smart planning. It’s one of those lessons every supply chain team eventually learns — usually the hard way, in the middle of a constrained quarter when a … Read More
I am longing to go to a baseball game, get a sense of the noise, and take in the chaos and enjoy a real close game at the Fenway Park! … Read More
How do we prepare for Black Swan events?
Black Swan events are those highly unpredictable events that occur out of nowhere and cause a systemic shock to the process and the way we do things. They may perennially alter the way we conduct our business.
Bullwhip effect is a phenomenon of demand being overestimated or underestimated as it passes through various stages of supply chain resulting in exaggerated supply fluctuations. The increased variability in demand … Read More
Taking stock of your Sales and Operations Planning Process may be a good start. It is important to understand what you get out of it and how it benefits your company in the planning and decision making process.
Start with the forecast first and make plans and contingencies for the extent of the error. Improve on the forecast by quizzing, dialoguing, negotiating and working with the ROC. This should be well emphasized in the basics of supply chain management.
Join hands together to move the ROC to make a better demand plan!
S&OP Best practice: Engage in ongoing cross-functional communication rather than wait for “the meeting” once a month! It is recommended to increase the interdepartmental communication – think of the S & OP as a process rather than a collection of meetings that happens at periodic intervals.
Demand volatility does NOT necessarily mean the demand is unpredictable. Demand volatility also does not mean the demand is an ugly scatter of points across the map. Forecast accuracy and Demand volatility are two different things, though there is a strong relationship between accuracy and volatility in practice. To improve forecast accuracy, you may need to do a variety of things and reducing or mitigating volatility is just one of those things.
