The Power of Demand Planning
Cédric Hutt – Product manager, Dynasys
| Building the Effective Enterprise
The Power of Demand Planning
Safe Harbor Statement
The following is intended to outline QAD’s general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver
any material, code, functional capabilities, and
should not be relied upon in making purchasing
decisions. The development, release, and timing
of any features or functional capabilities
described for QAD’s products remains at the sole
discretion of QAD.
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The Power of Demand Planning
Presentation agenda
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Session overview
You are all planning
Forecasting is a process
Demand planning supports the process
Summary and questions
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The Power of Demand Planning
You Are All Planning
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The Power of Demand Planning
You Are Already Planning!
customer
supplier
Because
■ You need to act before you know
■ Lead time > sale cycle
■ Deciding nothing is planning
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The Power of Demand Planning
Accurate Forecasting Gives You
Manufacturing
resources
Logistic
resources
Stocks
Service level
Properly
allocated
Stocks
Emergencies
Cash
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The Power of Demand Planning
Involved KPIs
■ Metric: forecast accuracy
■ Key metric: stock level
■ Key metric: customer service level
40%
Stockout risk
35%
Probaibility
30%
25%
20%
15%
10%
5%
0%
0%
20%
40%
60%
80%
Relative standard deviation
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100%
120%
140%
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The Power of Demand Planning
Actual improvements
■ For existing customers
■ Forecast accuracy:
 +10% ~ +40%
 Mayoli: 60% -> 75%
■ Stock level
80
60
40
20
0
before
after
120
 -10% ~ -50%
100
 Cadbury: -50%, 1 warehouse 80
60
■ Service level
 From +5% to +30%
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40
20
0
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The Power of Demand Planning
Forecasting Is a Process
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The Power of Demand Planning
How To Plan Demand
■ Demand comes from
 Sales forecast
 Forecast consumption
 MRP / DRP
■ How to forecast?
 Explain the past sales
 Make assumptions
 Extrapolate
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The Power of Demand Planning
Extrapolate From the Past?
■ Many factors can be seen in the past
 Trend
 Seasonality
■ Many are not
 But people know
 Knowledge is diffuse
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The Power of Demand Planning
Collaboration Required
■ Gather knowledge
■ Need an effective process
 Central forecast to update proposal
 Collaborative workers to review proposal
 Monitoring and improving
■ Share assumptions and risks
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The Power of Demand Planning
Software Required
■ Forecast lots of data
 For items
 Per site
 Each month at least
■ Initial forecast should be good
■ Exception based
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The Power of Demand Planning
Demand planning:
a Tool That Supports the Process
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The Power of Demand Planning
Demand Planning
Part of a planning suite
Strategic
Demand
Distribution
Production
Procurement
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The Power of Demand Planning
Powerful Calculations
■ Clean data
■ Use controlled, stable and powerful forecast
calculation
■ Use life cycle information
■ Monitor reliability
■ Propose safety stocks
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The Power of Demand Planning
Powerful Process Support
Import
Collaborative
review
Lifecycle
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Clean
Calculate
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The Power of Demand Planning
Import Data
■ Integrated with QAD EA
 Standard connector
 Direct access to DB
■ Check integrity
 missing attributes
 Missing units of measure
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The Power of Demand Planning
Past Sales Analysis
■ Outlier detection
■ Assisted
correction
■ Deviation
alerts
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The Power of Demand Planning
Forecast Calculation
■ Statistical methods
■ Top-down approach
■ Seasonality management
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The Power of Demand Planning
Lifecycle Management
■ Phase out
■ Phase in process
■ Item supersession
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The Power of Demand Planning
Collaborative Review
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Actors enter their own opinion
On the fly aggregations
Final word to planner
Review divergent opinions
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The Power of Demand Planning
Weekly Process
■ Review last weeks alerts
■ Enter promotions
■ Validate / change weekly forecast
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The Power of Demand Planning
Metrics
■ Forecast reliability analysis
■ Safety stock calculation
■ ABC calculation
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The Power of Demand Planning
Summary
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Huge impact of demand planning
Complex process
Powerful software
Quick return on investment
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The Power of Demand Planning
Next Steps While at Explore
■ Watch session replay:
 Building a supply chain for the future
■ Attend related session:
 Customer Stories about the Benefits of QAD
Demand Planning
■ Stop by the Solutions Expo
■ Visit our web site
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The Power of Demand Planning
Questions & Answers
■ Presenter Name: [email protected]
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www.qad.com
www.dys.com
©QAD Inc. 2013
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The Power of Demand Planning