Imagine a manufacturer producing a variety of products. These products are then sold through stores which are serviced by a few warehouses. Usually, the retailer will order an entire season’s supply of an item. The retailer will want the items to arrive before the season begins based on a forecast Read more…
By definition, good demand planning is customer focused. Therefore, it should be led by those who have the most contact with and the greatest understanding of the customer – that is, Sales and Marketing, and not the Supply Chain team. Demand planning MUST be integrated with marketing planning process, so that Read more…
Supply chain management (SCM) has become a complex, technology-driven discipline that reaches across functions, business processes, and corporate boundaries. Nevertheless, some CEOs pay little attention to SCM as a strategic concern and thereby squander its potential to improve overall performance. Executed well by experienced professionals, SCM can deliver significant, tangible benefits Read more…
The biggest cost for your company is: The imbalance between the demand for your products and your ability to supply them. Even in Supply Chain functions, many do not understand how their work can drive growth. Unfortunately, companies stuck in a cost-focused paradigm with significant gaps in horizontal organizational alignment Read more…
The focus of the traditional supply chain organization is cost management. Saving money does not drive value. Improving cost also does not necessarily improve margin. Holistic organizational thinking is a marked departure from traditional functional thinking, shifting the need for new forms of analytics and reporting. For example, today, while most organizations Read more…
Its Counter intuitive. But true.Ordering more than you actually need makes shortages worse. Typically, a retailer or manufacturer only orders as much as they think they can sell or consume until the next cycle begins. But sometimes a hot seller comes along, or you hear a part is going to Read more…
“No one in the supply chain has sold till the time the end customer has bought.” This seemingly simple diktat is hard to put in practise, after all, why do I care if my customer’s customer is buying my stuff or not. Err.. Turns out that you should! In one Read more…
Sherman’s Law of Forecast Accuracy: “Forecast Accuracy improves in direct correlation to its distance from usefulness.” The statistical forecast is only useful when determining a basis for segmentation, analyzing patterns and creating baseline forecasts. As a result, statistical forecasts about stock keeping units (SKUs) at the location level, for example, Read more…
Digitizing your business will give you the data you need to sense, shape and respond to demand changes in real time. This will also allow you to apply scientific principles and derive more accurate demand forecasts.Going digital doesn’t break down silos, but it does help to horizontally integrate your organization Read more…
Below are our top four demand planning best practices which will not only mitigate biases and heuristics (mental shortcuts that allows people to solve problems and make judgments quickly and efficiently), but improve overall planning performance. 1. 𝐃𝐨𝐧’𝐭 𝐮𝐬𝐞 𝐰𝐡𝐚𝐭 𝐲𝐨𝐮 𝐝𝐨𝐧’𝐭 𝐦𝐞𝐚𝐬𝐮𝐫𝐞. It is never good enough to assume Read more…