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?
Demand Planning – Why forecast ?

Service Level and profit
Respond to market growth successfully
Reduce loss of sales oppo...
Demand Planning – Why forecast ?

Costs reduction
Minimize material and component purchasing costs
Reduce manufacturing / ...
Common Business Challenges?
Common business chalenges
Increase Market Complexity - Emerging and fast growing markets
Globalization of trade

•

Local ...
Common business chalenges
Increase of competition
Increased Competition & Pressure on Margins and Costs

Increased promoti...
Business Challenges
No effective collaboration between different Supply Chain entities
Greater number of Players - From Su...
How to forecast & Improve Accuracy?
Forecasting Concepts
How is the forecast build?

Total forecast

Baseline Forecast

Promotion/launch

Cannibalization

BOM...
Forecasting Concepts – Baseline Forecast
How is the Baseline forecast built
Quantitative approach

•
•

Usage of sales his...
Forecasting Concepts – Baseline Forecast

Past

Future

Sales history
History statistical model
Baseline forecast
15
Forecasting Concepts – Cannibalization concept (promotion period)

Baseline Demand

Promotion plan

Cannibalization

Total...
Organization to support a sustainable
forecast process
Forecasting Concepts – Collaborative process
Who is involve in the Demand planning validation process?
The Demand planners...
What is the key success factors?
Key Success Factors – The Organization
What action to be taken?
Build a collaborative and cross-functional process that ul...
Key Success Factors – The Tool

Advanced Planning solution is no longer nice to have but mandatory to
support the processe...
Key Success Factors – The Tool

Improve sustainability tool
Track changes and updates
Retain knowledge with Staff turnover...
Thank you
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Managing supply chain from the front demand planning excellence

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

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Managing supply chain from the front demand planning excellence

  1. 1. Managing Supply Chain from the Front: Demand Planning Excellence Speaker Julien GIRARD
  2. 2. Introduction
  3. 3. FuturMaster – Company Worldwide representation 20 years of excellence 450 customers 50 countries 20,000 users 3
  4. 4. FuturMaster – Competencies 4
  5. 5. Why forecast?
  6. 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 6
  7. 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 7
  8. 8. Common Business Challenges?
  9. 9. Common business chalenges Increase Market Complexity - Emerging and fast growing markets Globalization of trade • Local  National  Regional  International Increase of specialized markets • General & Traditional Trade  Modern Trade Complexity of distribution network 9
  10. 10. Common business chalenges Increase of competition Increased Competition & Pressure on Margins and Costs Increased promotional activity Shortened product lifetimes Expanded product range 10
  11. 11. Business Challenges No effective collaboration between different Supply Chain entities Greater number of Players - From Suppliers to Partners Purchasing Production Distribution Demand 11
  12. 12. How to forecast & Improve Accuracy?
  13. 13. Forecasting Concepts How is the forecast build? Total forecast Baseline Forecast Promotion/launch Cannibalization BOM Component Bundle 13
  14. 14. 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 Y1 Y2 Y3 Y4 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
  15. 15. Forecasting Concepts – Baseline Forecast Past Future Sales history History statistical model Baseline forecast 15
  16. 16. Forecasting Concepts – Cannibalization concept (promotion period) Baseline Demand Promotion plan Cannibalization Total demand 16
  17. 17. Organization to support a sustainable forecast process
  18. 18. Forecasting Concepts – Collaborative 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 18
  19. 19. What is the key success factors?
  20. 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 20
  21. 21. 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 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 21 21
  22. 22. Key Success Factors – The Tool 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 22 22
  23. 23. Thank you

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