Forecast Errors
Volume 2, Issue 8, February 23, 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.
Forecast Errors Avoided by Aligning Inventory with Real-time Demand
Increased adoption of automation will help manufacturers create new revenue streams and lower costs. Real-time demand fulfillment will require tight integration of supply chain, production, logistics and marketing. The ability to sense demand in real-time and respond by changing prices or promotions through the utilization of segmented logistics, inventory and performance capacities, will allow for the optimization of integrated responses. Re-shoring will continue but supply chains will remain global, large and complex: Re-shoring will remain a focus as manufacturers search for efficiencies and innovation, but supply chains will still be complicated, requiring increased visibility provided by the industrial IoT. View here.
Reducing Order to Ship Times Also Reduces Forecast Errors
Every manufacturing operations manager is given an imperative to reduce order to ship times. Doing so is part of a lean operation which results in fewer forecast errors. Lean Factory Management (LFM) provides manufacturing operations with all the tools necessary to achieve lean production objectives. LFM sequences production based on demand, replacing manual kanban system with eKanban and increases plant performance with Overall Equipment Effectiveness (OEE.) View here.
The ABC’s Of VMI (Vendor Managed Inventory)
Tariq Choudry shared in Manufacturing Business Technology some of the key elements of VMI. When done correctly, a manufacturer or distributor in a VMI relationship assumes the role of inventory planning and management for the customer. Extensive and timely information sharing is a prerequisite so that the manufacturer/distributor can maintain a high degree of visibility of its goods at the customer’s location. Instead of the customer reordering when its supply has been exhausted, the supplier is responsible for replenishing and stocking the customer at appropriate levels. The upside for both parties? An inventory process that becomes a competitive advantage. Read more.
5 Ways to Fill Supply Chain Knowledge Gaps
Supply Chain Management Review’s contributing editor Bridget McCrea recently looked at the world’s largest chemical company, BASF. Domestically headquartered in Florham Park, N.J., the company faces some unique challenges when it comes to keeping its supply chain managers and employees around the globe well informed and up to speed with the latest knowledge and information. “As the company has expanded, that proposition has become exponentially more difficult,” said Dirk Hopmann, BASF’s vice president of supply chain strategy. Establishing common supply chain nomenclature across BASF’s operations, for example, and particularly in light of the firm’s many recent acquisitions of other entities, has been especially challenging. To address that situation, the global manufacturer puts its new and existing employees through APICS’ certification process, starting with BASF’s supply chain managers. Read More.
Move from forecast errors to demand driven accuracy:
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