Supply chain management involves planning and implementation. Demand planning, based on a statistical projection, evaluates inventory, marketing, and demand-influencing factors and defines where to distribute products to fulfill the anticipated demand. Usually kicks off the planning side of SCM.
To increase the precision of the demand forecasts utilized in the supply chain, companies invest a lot of time and money in forecasting activities. The objectives of a precise demand plan and a lean supply chain process may be hampered by a bad process design.
Learn industry best practices on how to improve demand planning and create supply chain efficiencies.
The Cost of Spreadsheet Planning
Companies that depend on spreadsheets for demand planning, forecasting, and inventory management are often constrained by the spreadsheet’s inherent limitations. This post examines the drawbacks of traditional inventory management approaches caused by spreadsheets and their associated costs, contrasting these with the significant benefits gained from embracing state-of-the-art planning technologies.
Leveraging Epicor Kinetic Planning BOMs with Smart IP&O to Forecast Accurately
In this blog, we explore how leveraging Epicor Kinetic Planning BOMs with Smart IP&O can transform your approach to forecasting in a highly configurable manufacturing environment. Discover how Smart, a cutting-edge AI-driven demand planning and inventory optimization solution, can simplify the complexities of predicting finished goods demand, especially when dealing with interchangeable components. Learn how Planning BOMs and advanced forecasting techniques enable businesses to anticipate customer needs more accurately, ensuring operational efficiency and staying ahead in a competitive market.
Weathering a Demand Forecast
For some of our customers, weather has a significant influence on demand. Extreme short-term weather events like fires, droughts, hot spells, and so forth can have a significant near-term influence on demand. There are two ways to factor weather into a demand forecast: indirectly and directly. The indirect route is easier using the scenario-based approach of Smart Demand Planner. The direct approach requires a tailored special project requiring additional data and hand-crafted modeling.
Leveraging ERP Planning BOMs with Smart IP&O to Forecast the Unforecastable
In a highly configurable manufacturing environment, forecasting finished goods can become a complex and daunting task. The number of possible finished products will skyrocket when many components are interchangeable. A traditional MRP would force us to forecast every single finished product which can be unrealistic or even impossible. Several leading ERP solutions introduce the concept of the “Planning BOM”, which allows the use of forecasts at a higher level in the manufacturing process. In this article, we will discuss this functionality in ERP, and how you can take advantage of it with Smart Inventory Planning and Optimization (Smart IP&O) to get ahead of your demand in the face of this complexity.
You Need to Team up with the Algorithms
This article is about the real power that comes from the collaboration between you and our software that happens at your fingertips. We often write about the software itself and what goes on “under the hood”. This time, the subject is how you should best team up with the software.
A Rough Map of Forecasting-Related Terms
People new to the jobs of “demand planner” or “supply planner” are likely to have questions about the various forecasting terms and methods used in their jobs. This note may help by explaining these terms and showing how they relate.
Recent Posts
Forecast-Based Inventory Management for Better PlanningForecast-based inventory management, or MRP (Material Requirements Planning) logic, is a forward-planning method that helps businesses meet demand without overstocking or understocking. By anticipating demand and adjusting inventory levels, it maintains a balance between meeting customer needs and minimizing excess inventory costs. This approach optimizes operations, reduces waste, and enhances customer satisfaction. […]
Make AI-Driven Inventory Optimization an Ally for Your OrganizationIn this blog, we will explore how organizations can achieve exceptional efficiency and accuracy with AI-driven inventory optimization. Traditional inventory management methods often fall short due to their reactive nature and reliance on manual processes. Maintaining optimal inventory levels is fundamental for meeting customer demand while minimizing costs. The introduction of AI-driven inventory optimization can significantly reduce the burden of manual processes, providing relief to supply chain managers from tedious tasks. […]
The Importance of Clear Service Level Definitions in Inventory ManagementInventory optimization software that supports what-if analysis will expose the tradeoff of stockouts vs. excess costs of varying service level targets. But first it is important to identify how “service levels” is interpreted, measured, and reported. This will avoid miscommunication and the false sense of security that can develop when less stringent definitions are used. Clearly defining how service level is calculated puts all stakeholders on the same page. This facilitates better decision-making. […]
Future-Proofing Utilities: Advanced Analytics for Supply Chain OptimizationUtilities in the electrical, natural gas, urban water, and telecommunications fields are all asset-intensive and reliant on physical infrastructure that must be properly maintained, updated, and upgraded over time. Maximizing asset uptime and the reliability of physical infrastructure demands effective inventory management, spare parts forecasting, and supplier management. A utility that executes these processes effectively will outperform its peers, provide better returns for its investors and higher service levels for its customers, while reducing its environmental impact. […]
The Cost of Spreadsheet PlanningCompanies that depend on spreadsheets for demand planning, forecasting, and inventory management are often constrained by the spreadsheet’s inherent limitations. This post examines the drawbacks of traditional inventory management approaches caused by spreadsheets and their associated costs, contrasting these with the significant benefits gained from embracing state-of-the-art planning technologies. […]
Inventory Optimization for Manufacturers, Distributors, and MRO
- Future-Proofing Utilities: Advanced Analytics for Supply Chain OptimizationUtilities in the electrical, natural gas, urban water, and telecommunications fields are all asset-intensive and reliant on physical infrastructure that must be properly maintained, updated, and upgraded over time. Maximizing asset uptime and the reliability of physical infrastructure demands effective inventory management, spare parts forecasting, and supplier management. A utility that executes these processes effectively will outperform its peers, provide better returns for its investors and higher service levels for its customers, while reducing its environmental impact. […]
Centering Act: Spare Parts Timing, Pricing, and ReliabilityIn this article, we'll walk you through the process of crafting a spare parts inventory plan that prioritizes availability metrics such as service levels and fill rates while ensuring cost efficiency. We'll focus on an approach to inventory planning called Service Level-Driven Inventory Optimization. Next, we'll discuss how to determine what parts you should include in your inventory and those that might not be necessary. Lastly, we'll explore ways to enhance your service-level-driven inventory plan consistently. […]
Why MRO Businesses Need Add-on Service Parts Planning & Inventory SoftwareMRO organizations exist in a wide range of industries, including public transit, electrical utilities, wastewater, hydro power, aviation, and mining. To get their work done, MRO professionals use Enterprise Asset Management (EAM) and Enterprise Resource Planning (ERP) systems. These systems are designed to do a lot of jobs. Given their features, cost, and extensive implementation requirements, there is an assumption that EAM and ERP systems can do it all. In this post, we summarize the need for add-on software that addresses specialized analytics for inventory optimization, forecasting, and service parts planning. […]
5 Steps to Improve the Financial Impact of Spare Parts PlanningIn today’s competitive business landscape, companies are constantly seeking ways to improve their operational efficiency and drive increased revenue. Optimizing service parts management is an often-overlooked aspect that can have a significant financial impact. Companies can improve overall efficiency and generate significant financial returns by effectively managing spare parts inventory. This article will explore the economic implications of optimized service parts management and how investing in Inventory Optimization and Demand Planning Software can provide a competitive advantage. […]
Problem
An accurate forecast is a critical supply chain driver, but many organizations have a limited view of what comes next. Forecasts developed by sales teams or customers are often inaccurate and biased toward sales goals or budgets. Forecasts are often provided only at aggregate levels leaving unspecified which items will be at which locations. Planning teams are left to interpret sales figures and convert them into actionable forecasts of the item mix. Incorporating sales feedback, determining which decades old forecast model to use, managing the consensus forecast process, and tracking forecast accuracy are manual processes. They are often managed in complex spreadsheets that are difficult to use, share and scale, and don’t account important features of demand such as seasonality and trend.
Solution
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Accurate Demand Forecasts
Capture trend and seasonality
Predict range of future demand
Flag exceptions
Cleanse historical data
Operational Consensus
Collaborate with key stakeholders
Review at any level of hierarchy
Apply overrides and achieve consensus
Consistent Repeatable Process
Common system
No spreadsheets
Embed and reuse forecast rules
Monitor accuracy and fine-tune
Who is Smart Demand Planner for?
- Demand Planners.
- Forecast Analysts.
- Material & Inventory Planners.
- Operational Research Professionals.
- Sales Analysts.
- Statistcally Minded Executives.
What questions can Smart Demand Planner answer?
- What is my short and long term demand most likely to be?
- Which areas of the business and products are trending?
- What is the forecast at different levels of my hierarchy (customer, item, family)?
- What is the likely range of future demand?
- Which forecasts need to be reviewed (exception reporting)?
- What is our forecast error (accuracy) for each item, group, overall?
- Are forecast overrides adding value to the process?
What can Smart Demand Planner do?
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Accurately forecast demand for thousands of items in any unit of measure, powered by the SmartForecasts® engine.
- Capture trends, seasonal, and cyclical patterns at any level.
- Outlier detection and correction to enhance the quality of historical data.
- Identifies “causal” factors such as price and economic data and models their impact on demand.
- Patented Intermittent Demand Planning via APICS award winning “Bootstrapping” technology.
- Create forecasts at any level of the hierarchy – customer, item, product groups, regions.
- Share forecasts with internal and external stakeholders such as sales and suppliers.
- Apply, document, and track forecast overrides.
- Quantify the impact that promotions will have on future demand.
- Apply user defined forecasting methods and rules.