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Managing supply chain from the front demand planning excellence

Managing supply chain from the front demand planning excellence



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

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 Managing supply chain from the front demand planning excellence Presentation 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?
    • 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
    • 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
    • Common Business Challenges?
    • 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
    • Common business chalenges Increase of competition Increased Competition & Pressure on Margins and Costs Increased promotional activity Shortened product lifetimes Expanded product range 10
    • Business Challenges No effective collaboration between different Supply Chain entities Greater number of Players - From Suppliers to Partners Purchasing Production Distribution Demand 11
    • How to forecast & Improve Accuracy?
    • Forecasting Concepts How is the forecast build? Total forecast Baseline Forecast Promotion/launch Cannibalization BOM Component Bundle 13
    • 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
    • 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 demand 16
    • Organization to support a sustainable forecast process
    • 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
    • What is the key success factors?
    • 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
    • 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
    • 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
    • Thank you