Collaborative Demand Planning & Optimization
Good handling of market demand data is one of the most vital concepts in any supply chain. The correct management of demand information can greatly influence the level of responsiveness and directly impacts customer service, inventory level and ultimately revenue. To serve the right customers with the right products at the right time, a good estimate of the demand is indispensable.
This requires the involvement of many parties: Finance, Marketing and Sales, but also external parties such as key customers and channel partners. After all, your channel partners’ sales or your key customers’ consumption will be more revealing than your own historical sales order pattern. In each business, 20% of the customer’s account for 80% of the revenue. So instead of trying to guess what those customers will buy, ask them! Getting these volumes right will stabilize your supply chain, thus lowering your costs. And it will create flexibility to maneuver in the rest of the business where such collaboration opportunities are not possible.
A good demand planning process consists of five key steps, one of which is collaboration. Any forecasting process starts with analyzing your sales history and cleaning up data. Next, statistics are used to generate a quantitative forecast. It makes Sales’ life easier since they can focus on erratic figures and – because people have a natural tendency to over-forecast – it helps to remove bias from the forecast. Furthermore, you have to rely on a collaborative process within and beyond company boundaries to receive the crucial demand data about e.g. product launches, promotions planning and end-of-life products. Ensure that you check the value-add of each of the different forecast versions and include a feedback cycle. Finally, to reach a consensus forecast, plan a monthly demand review meeting, ensuring qualitative input for the supply planning process.
Among other things, Solventure can help you to improve the (financial) forecasting accuracy, reduce inventory levels and enhance profitability by using the right forecasting methods. Did you know you can easily achieve 30-40% more efficiency with a good process and tool? At Solventure, we have in-house forecasting experts and a long-standing partnership with the leading tool provider, Arkieva. The Arkieva solution also enables aggregation/disaggregation to support the collaborative demand planning process. Besides that you can use the Arkieva S&OP Software to follow up on the three key metrics: the mean percentage error (MPE), the mean absolute percentage error (MAPE) and the stability of the forecasting accuracy.
Let us help you to build consensus and to improve S&OP maturity with a high-quality forecast. Read our white paper to find out more.
Interested to learn from other
Supply Chain Professionals?
Want to be informed about the next webinar on Collaborative Demand Planning & Optimization?
In this webinar Hélène Delrue, Senior Project Manager at Solventure, will talk about “Collaborative Demand Planning as an essential part of your S&OP process’.