Demand Planning Best Practices

Smart Software

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.

Weathering a Demand Forecast

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.

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Leveraging ERP Planning BOMs with Smart IP&O to Forecast the Unforecastable

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.

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You Need to Team up with the Algorithms

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.

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Six Demand Planning Best Practices You Should Think Twice About

Six Demand Planning Best Practices You Should Think Twice About

Every field, including forecasting, accumulates folk wisdom that eventually starts masquerading as “best practices.” These best practices are often wise, at least in part, but they often lack context and may not be appropriate for certain customers, industries, or business situations. There is often a catch, a “Yes, but”. This note is about six usually true forecasting precepts that nevertheless do have their caveats.

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    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. […]

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    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

    Smart Demand Planner™ is a consensus demand planning and statistical forecasting solution available on Smart’s Inventory Planning and Optimization Platform, Smart IP&O. Smart Demand Planner, powered by the SmartForecasts® Engine, aligns strategic business forecasting at any level of your product hierarchy with granular forecasts of the item mix to improve forecast accuracy. It provides a statistically sound, objective foundation for your sales and operations planning process (S&OP).  Smart Demand Planner’s collaborative workbench enables forecast overrides to be applied, imported, reviewed, and approved by authorized users driving the consensus plan. Forecast accuracy is measured, helping ensure that the best possible forecast is delivered to the business at both the aggregate and item mix levels. The result is more efficient sales planning, budgeting, production scheduling, ordering, and inventory planning.

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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?
      • 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.

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