Forecasting to Budget
Overreacting to Last Months Actuals
Forecasting dominated by Sales / Marketing tactics
Too many Data Streams, Hierarchies & KPI's
Too many What-If Scenarios
Too much Market Share Analysis
Too many Alerts
Changing to round numbers
Using Legacy Process / Structure in New System Design
Not using the Latest / Best Data
Changing Forecast Method (from Previous to Statistical or vice versa)
Improving the Statistical Forecast
Using Invoice Date instead of Customer Request Date for Historical reference
Hierarchies that are too deep and/or too long
Defining and using the right levels for the right purpose
A Strategy for Planning
Many companies have weak, incomplete or immature systems, processes and strategies for Demand Planning. Recognising where your Business stands is a useful starting point to identify the full scope of challenges that you may face.
There are perhaps 3 Stages of Demand Planning:
Stage 1: Basic - No integrated planning sytem or process. Information is manually collated and is incomplete. Forecasts are not accurate (if measured) and communication between parties (customers, sales, planners & manufacturers) is lax or broken. Forecasts are therefore out of tolerance, out of time, take too long to produce and are not used to improve the process.
Stage 2: Integrated – System Integration is achieved and a planning process flow is implemented but suffers from issues such as data and timing. Communication between Planners and stakeholders is in place and Forecasts are regular if not as accurate as was anticipated prior to system implementation. Cycle time is still too long. Analysis and reporting still lacking.
Stage 3: Sophisticated – Integrated System and Planning Process is fully implemented. Planners partner with all Stakeholders and Collaborate with Customers to create accurate forecasts that are assessed according to appropriate KPI. Risk and Tolerance issues are quickly identified. Adjustments to the Forecast principles such as measurement or Statistical parameters can be applied to the process swiftly. The forecast cycle is short and plans can be created ad-hoc.
People, Process, Information, Technology, Performance Management...Identify the weak areas and put in place a Strategy to improve! Remember that selecting a system such as Demantra is only part of the solution. A tool alone will not transform your business.