Demand Planning. How to Manage New Product Introductions and Rapid Product Growth

1. N e w P r o d u c t / R a p i d G r o w t h F o r e c a s t i n g
Problems
Forecasting for New Products and Sudden Rapid Growth is extremely
difficult and is one of the most frustrating problem faced by many
companies. You are probably suffering from:
Lack of history, no data patterns, limited system capability,
incomplete master data, processes with workarounds, long and
restricted cycle time, no Point-of-Sale information, tied to Budget
expectations, frustrated customers, extended lead-times
and your capability or purpose as a planner being questioned!
So, what can you do?

2. Adjust History to generate a forecast
• Enter a history that generates the forecast you want
• Copy history of combination(s) where volume & shape are similar
• Copy history of combination(s) where shape is similar & adjust the volume
N e w P r o d u c t / R a p i d G r o w t h F o r e c a s t i n g
If Statistical Forecasting:
Override forecast
• Enter forecast overrides for the volume & shape that you want
• Copy forecast of combination(s) where volume & shape are similar
• Copy forecast of combination(s) where shape is similar & adjust the volume
If using Previous Forecast:
Override forecast
• Enter forecast overrides for the volume & shape that you want
• Copy forecast of combination(s) where volume & shape are similar
• Copy forecast of combination(s) where shape is similar & adjust the volume
Forecast Control:
Turn statistical forecasting off so that the
system does not create a poor forecast.
Forces the Planners to create and maintain
a manual forecast.
Life-Cycle Attributes:
New, Live, Phase-Out, Dead to locate &
maintain products
Supersession:
Can automate the actions of Step 1
(applying history and forecast from one
product to another) including ending
forecast on phase-out and dead
combinations.
Run Statistical Engine to create Forecast.
• Validate results of Forecast. If needed, adjust history volumes & repeat process until
the forecast generated is as desired.
Step 1
Step 2
Step 3
and/or where statistically generated
combinations are not acceptable:
Step 1
Technical options
Additional Forecasting Functions:

3. N e w P r o d u c t / R a p i d G r o w t h F o r e c a s t i n g
Bias & Anchoring
Beware using the Sales Forecast or Budget as a crutch for your Demand Forecast.
Overconfidence
Beware justifying forecast error. Admit, understand the error & learn from it.
Incorrect Data
The type and date (Shipments v Sales v Real). The Demand Source (ERP, Syndicated,
BI). The Data Age (a Month old or every hour?) can all impede your evaluation and
understanding of New Product Introductions and Sudden Rapid Growth.
Pitfalls and Problems
Forecast Purpose: Who is using the forecast & why?
Are you smoothing to reduce Sudden Rapid Growth ‘Bull-Whip effect’ or
amplifying it to maximise potential revenue at expense of overstock?

4. N e w P r o d u c t / R a p i d G r o w t h F o r e c a s t i n g
Forecasting for new products and sudden rapid growth requires deep appreciation
of your Market Structure, Dynamics and Maturity. Products can go through
predictable stages, each with a different emphasis. Understand what stage your
product is in and you can anticipate some of the pitfalls that lie ahead.
Know Your Market Structure, Dynamics and Maturity
Study your competitors: What are they doing (stores, sales, promotions, stock-outs, financial reports?).
Study Extra Casuals: Look beyond your internal data. Is rapid growth caused by Competitors, News or Media
(films, TV & radio), Social Media (viral #hashtag or influencer), Pandemic, Tax changes, Legal Cases, weather, environmental
awareness, tech innovation etc.
Study past behaviour: Analyse volume trends alongside Sales & Marketing Strategies (Channels, Prices &
Promotions) and Customer behaviour. Try and categorise combinations into “typical” shapes.
Promotions: Capture, evaluate and Load future promotional data into the Forecast to map or drive trend changes
Get to the true demand: Channel inventory or Buy-In streams will not provide the true NPI or rapid
growth data. Obtain the Point of Sale by item and location by day measure it. Measure it constantly and
be flexible – re-forecast with new insights.