Forecast Errors
Volume 2, Issue 21, June 1, 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 Planning to Eliminate Errors
Demand planning is the art of integrating multiple, independent, and inaccurate signals into one accurate signal, according to Michael Massetti. Demand is the baseline for all things supply. Customers’ desire for a product drives the demand and is the foundation for business volumes. Without demand there is absolutely no need for supply and even less need for supply chain folks. Demand planners have a plethora of signals available to them - point-of-sale (POS) data, macro market or economic trends, historic demand accuracy, promotional effects, seasonality, business targets, prior product launches, actual orders, and more. While these are options aplenty, by themselves, none are sufficient or accurate. Read more.
High Margin Products the Place to Start Demand Driven Supply Chain
It may not be possible for manufacturers to adopt a demand-driven approach with every product at the same time. It may make more sense to segment your products to identify the ones that would have the most impact right away. This might include products with the highest margins, shortest shelf life or in the early stages of the product life cycle. By focusing on high impact items first, the benefit of a demand-driven supply chain can be felt quickly. Find out what parts and materials handled by the supply chain are suitable for transition to demand-driven manufacturing. Read more.
Governments Eliminate Forecast Errors via DDSC
The Government of Sierra Leone is establishing the National Pharmaceutical Procurement Unit (NPPU). This project shall be co-financed by the Government of Sierra Leone and various donor agencies. The purpose of NPPU is to act as an autonomous body responsible for the management of various pharmaceuticals for and on behalf of all public health facilities throughout Sierra Leone. NPPU is establishing a demand driven supply chain to distribute a wide range of medicines to governmental hospitals and Peripheral Health Units (PHUs). Improved supply chain performance is seen as a key enabler for creating a sustainable operating model. The new supply chain solution will support the logistics operation. The solution will enable replenishment to the dispensing point as well as support the supplier tendering and procurement process. Read more.
Move from forecast errors to demand driven accuracy:
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