page contents

Demand Planning: Forecasting, Replenishment, Distribution Planning, and Collaboration

  • Solution for retail, wholesale, distribution, and/or manufacturing
  • SME (Small to Medium Enterprises)
  • Divisions of Fortune 500 companies
  • Local, national, global enterprises
  • Latest technology with highly configurable solution
  • Using industry leading R forecasting engine
  • Architected with 40 plus years of international inventory management experience
Demand Planning DRP MRP

Forecasting Replenishment Distribution planning

The Forecasting and Replenishment application impacts many facets of the business. Consequently the validity of the data and process is critical within an organization. Typically source data is from the enterprise system and after generating the forecast and validating demand either forecast or replenishment data is fed back to the enterprise for additional planning and processing.

There are situations where client companies wish to use the forecasting function only. This process must be well thought through and reviewed in terms of multiple sites, distribution networks, multiple retail stores, etc.

The forecasts are used to drive a number of applications including: Sales & Operations Planning, Distribution Planning, Advanced Planning and Scheduling, Master Production Scheduling, Budgeting, Purchasing, Finance and Accounting, Marketing and Sales, Product Development or Engineering and Capacity Planning to name a few. Collaboration on forecast data is important with input from Field Sales Personnel, Customers and Suppliers. But the function responsible for working the numbers is forecasting and planning. They and other users providing input must be held accountable for performance of the forecasting process and that is where Waterfall Charts play an invaluable role. Here you can tell over time how well you, or the forecasts, or the forecasting process has performed.

Forecasting, Replenishment, Distribution Planning

Supply Chain Management Forecast Replenishment Distribution

To support an effective forecasting, collaboration and replenishment process requires a robust system. To determine needs to evaluate your system or to build a requirements list that will drive your in-house development or preparing a Request for Proposal documentation, consider some of the pointers in the above schematic.

The forecast applications should comprise numerous features and function including templates (so that you do not have to keep building the same information over and over again), multiple forecast views to allow drilling from year to quarter, to month, to week to day. Multiple calendars must be provided to cater for a regular calendar, fiscal and rolling (starting with today and showing the historical and planning horizon 1 to 5 years) views; and different annual, monthly and week start and end dates to allow collaboration with your customers working with their calendars. If you supply retail then each retailer could have their own set of rules including fiscal start date that could be different to yours, different week starting or ending date. If you deal with Arabian countries you will need to plan around their weekend days. If you are a global organization then each country will have a different holiday structure. In brief—you should be looking for flexibility in handling multiple calendars to satisfy different requirements. Check to see if your system or that of the software vendor will accommodate a 13 4-week system of planning that would be outside a conventional calendar.

It is not appropriate to get into too much detail here suffice to say that each point in the schematic above could require a lengthy discussion in terms of features and function you should be careful to consider for your own set of circumstances.

Realistically most enterprises survive through innovation. New product introductions are the life blood of many organizations. In retail fresh and new is mandatory. If you are into brick and mortar versus selling on-line, rolling out new stores adds challenges to any forecasting application. Does your solution come with supersession features to link sales of old product to the replacement product that has no history to support a forecasting process? Can the software support the use of profiles to help in the roll out of new product or new stores based on similar products or stores?

How will you manage input from field sales personnel? Since you hold sales accountable for their forecast, what information are you going to share with them? Unless you are the government mint producing monetary instruments, forecasting in dollars (or any other currency) will not support production or purchasing. We need to work at the product or product family level by customer or customer groups and have a ready conversion to currency in cost, selling price and margin to support sales planning. Naturally as part of a demand planning solution you will require a valid process. Having sales adjust forecasts on the last day of the month might help their accuracy figures but it does nothing for supporting replenishment planning. As a gross generalization, most sales personnel enjoy the interaction with the customer or prospect and not the “paper work.” How user friendly is the collaboration tool? Can it operate on- or off-line when in the presence of a customer using a PC, or would you prefer something less intrusive such as an iPad or smart phone?

You cannot afford customers to run your business. What information do you plan to share with them? If you allow customers to adjust forecasts, will you have time frame windows to allow different level of change? Do you have sufficient security in your system to keep cost and margin data confidential? Will your security ensure that customer A does not see planning information for customer B?

If your demand planning and replenishment is going to support a Vendor Managed Inventory (VMI) process, are you able to hold the level of detail required, and to be able to segment data to work separately by customer?

As we said at the outset, there are many factors to consider in selecting an effective and user friendly tool. Invest wisely.