Forecast Errors
Volume 2, Issue 20, May 18, 2015
A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.
Demand Forecasting to Eliminate Errors
Today, by using demand forecasting software, manufacturing companies can plan long lead items without flooding production operations with unnecessary inventory. Companies working closely with key customers and the sales force are gaining insight into potential demand, in addition to working with demand sensing techniques, resulting in data and shared repositories with information about the status of inventory at key suppliers (or even the entire supply chain). Read more.
A Truly "Demand-Driven" Supply Chain
It's been about a decade since companies began talking about the dream of a truly "demand-driven" supply chain. How far have we come? Today, companies are “realizing that perhaps it’s not quite as short a journey as we thought it would be,” says Roddy Martin, managing director of Accenture Supply Chain Strategies. Progress has been made, however, especially among consumer-driven retailers and even some large industrial manufacturers. “This difficult journey is a heavy investment in traditional enterprise resource planning and demand-planning infrastructure”, says Martin. That has led to an “inside-out” focus with businesses. But the volatility of demand, coupled with growing risk in global supply chains, has shown that this approach won’t give companies the agility they’re seeking. What they need to be pursuing is the ability to conduct demand sensing and shaping within their supply chains, made possible by complete visibility of inventory at all points. Read more.
Demand Forecasting to Eliminate Errors
Today, by using demand forecasting software, manufacturing companies can plan long lead items without flooding production operations with unnecessary inventory. Working closely with key customers and the sales force to gain insight into potential demand, in addition to working with demand sensing techniques, results in data and shared repositories with information about the status of inventory at key suppliers (or even the entire supply chain). Read more.
Supply Chain Management to Become a Demand Driven Manufacturer
The demand-driven supply chain must be optimized for the benefit of all suppliers in order to work well. With the help of supply chain management software, better optimization of the entire supply chain produces the best results. To be truly demand-driven, it is important to unite operations and supply chain management with common goals. S&OP (sales and operations planning) is one technique for ensuring that everybody in the company is on the same page. This may also require changes to a company’s key metrics, employee incentives and even compensation models. Supply chain management is a complex task even at the best of times and even with perfect information. The key to understanding how to control inventory is coordinating the objectives of every member of the supply chain and ensuring that every link in the chain is working toward similar goals. Read more.
Move from forecast errors to demand driven accuracy:
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