managing supply chain from the front demand planning excellence

Post on 06-May-2015

553 Views

Category:

Business

3 Downloads

Preview:

Click to see full reader

DESCRIPTION

This is a presentation by Julien Girard at ISS Seminar: Supply Chain Analytics on 20 Nov 2013.

TRANSCRIPT

Managing Supply Chain from the Front: Demand Planning Excellence

Speaker

Julien GIRARD

Introduction

FuturMaster – Company

Worldwide representation

20 years of excellence

450 customers

50 countries

20,000 users

3

FuturMaster – Competencies

4

Why forecast?

6

Demand Planning – Why forecast ?

Service Level and profit Respond to market growth successfully

Reduce loss of sales opportunities from Shortages

Increase sales turnover, market share and margins

Stock Optimization

Decrease inventory level (20-60%!)

Decrease obsolete, slow moving and wastages

Reduce working capital requirement

6

7

Demand Planning – Why forecast ?

Costs reduction Minimize material and component purchasing costs

Reduce manufacturing / supply costs

Optimize Supply Chain performance Collaboration between departments

Collaboration with customers & suppliers

7

Common Business Challenges?

Increase Market Complexity - Emerging and fast growing markets

Globalization of trade • Local National Regional International

Complexity of distribution network

Common business chalenges

9

Increase of specialized markets • General & Traditional Trade Modern Trade

10

Increase of competition

Increased Competition & Pressure on Margins and Costs

Increased promotional activity

Shortened product lifetimes

Expanded product range

Common business chalenges

Business Challenges

11

No effective collaboration between different Supply Chain entities Greater number of Players - From Suppliers to Partners

Purchasing

Demand

Production

Distribution

How to forecast & Improve Accuracy?

How is the forecast build?

Forecasting Concepts

Total forecast

Baseline Forecast

Promotion/launch

Cannibalization

BOM Component

13

Bundle

Forecasting Concepts – Baseline Forecast

How is the Baseline forecast built Quantitative approach • Usage of sales history to anticipate the future demand • Calculation of statistical forecast

The main components of the baseline forecast • A trend • A seasonality

Build a forecast free from non-recurrent activity (cleansed historical sales) • These cleansed historical sales are calculated by removing the exceptional (non recurrent)

events from the historical sales

14

Y1 Y2 Y3 Y4

Forecasting Concepts – Baseline Forecast

15

Past Future

Sales history

History statistical model

Baseline forecast

Promotion plan

Baseline Demand

Forecasting Concepts – Cannibalization concept (promotion period)

Cannibalization

Total demand

16

Organization to support a sustainable forecast process

Who is involve in the Demand planning validation process? The Demand planners: Baseline forecast proposal • Usage of cleansed sales history • With statistical model for forecasting • Central in reaching the right forecast decision

The Sales: Sales forecast proposal • Initialize and define the short term promotion plan • Input their knowledge of the market • Adjust the short term forecast plan

The Marketing: Marketing plan • Input the long term promotion plan • Provide a long term view of the forecast • Initialize the launch plan (new product)

The Finance: The budget • Budget for Y & Y+1 • Last estimated • Target

Purpose of the collaborative process The Committed Forecast (one single figure should drive the entire company)

A consensus forecast agreed through the Demand review and the S&OP meeting

Forecasting Concepts – Collaborative process

18

What is the key success factors?

20

Key Success Factors – The Organization

What action to be taken? Build a collaborative and cross-functional process that ultimately drive to an aligned operational plan

Harmonize and Simplify processes • Clarify Roles & Responsibilities • Processes improvement • Change management

Enforce Collaboration and Accountability • Inter-departments

Build the Right organization • People • Process

A sustainable tool to support the Demand Planning process

20

21

Ability to improve forecast accuracy

Support modeling of trend using Statistical Analysis

Improve efficiency and productivity

One tool / source

Easy to maintain

Easy to check gaps and discrepancies

80% of time in data analysis rather than data entry and trouble shooting and 20% in analysis (Low productivity)

Management by exception

Facilitate learning from historical data and activities towards improvement

Key Success Factors – The Tool

Advanced Planning solution is no longer nice to have but mandatory to support the processes and improve the performances against the competition

21

22

Improve sustainability tool Track changes and updates

Retain knowledge with Staff turnover

Easy to share information for collaboration

Sales, Marketing, Purchasing, Logistics, Warehouse, Production and Finance

Support workflow management • Prepare Forecast by owner • Review Forecast by relevant department personnel • Entry of relevant information by relevant department personnel • Verify by owner of Forecast • Approve by department in charge

Key Success Factors – The Tool

22

Thank you

top related