Forecasting “Best Practices”
“Effective demand planning and sales forecasting across the supply chain can bring a host of benefits. Specifically, it can help improve labor productivity, reduce head count, cut inventories, and speed up production flows, and increase revenues and profits.
-Edward J. Marien
To find the “best practices” for forecasting, our team researched many cases of forecasting success, and found five companies with a common theme. Rayovac, the Coca-Cola Bottling Company, AAi. FosterGrant, the Sara Lee Corporation, and the Scotts Company all had major problems with forecasting, some of them very similar. To address and solve these problems each of these companies made major improvements to their forecasting systems. Although some used similar methods and others very different, these companies found that the right people, process and information technology was the key to efficient and accurate forecasting.
Rayovac
Rayovac discovered the proper use of forecasting when it implemented its consensus decision-making teams to improve their performance. They believe that the best information comes directly from the customer. Therefore, their forecasting takes place from the bottom-up. Sales, marketing, finance, and supply chain builds a consensus for forecasting, inventory management, scheduling, warehousing, and transportation. Their consensus forecasting is the responsibility of a cross-functional team.
For their annual planning process, a bottom-up and a top-down forecasting procedure is used. The top Key Results Measures (KRMs) are compared with the bottom-up forecast which is developed by the consensus teams. Meetings are held to align the two when there are discrepancies. Monthly meetings are held to update the bottom-up forecast and actions are taken to bring the forecast and annual plan into alignment.
Rayovac has discovered some key guidelines to be used for successful forecasting and planning:
1. Actually using the forecast to drive the business and not...
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...orecasting cannot be understated. Many companies have found that after successful forecasting and proper use of people, process, and technology have led to increased performance of the company as a whole. This has been proven in our analysis of the current best practices of forecasting in the workplace.
References
1. Bowman, Robert J. “Scotts Cultivates a Customer Centric Supply Chain Strategy.” Global Logistics and Supply Chain Strategies, July 2004.
2. Hoffman, Kurt C. “Who’s That Behind FosterGrant’s Demand.” Global Logistics and Supply Chain Strategies, December 2003.
3. Marien, Edward J. Demand Planning and Sales Forecasting: A Supply Chain Essential. Supply Chain Management Review, 1999
4. Murphy, Jean V. “More Accurate Forecasts Give Sales, Operations Planning New Life at Sara Lee Unit.” Global Logistics and Supply Chain Strategies, March 2003.
5. Murphy, Jean V. “Special Issue: Collaborative Commerce Forecasting Tool Lowers Coke Bottler’s Inventory.” Global Logistics and Supply Chain Strategies, November 2002.
Relationships serve as the communication channels that bond family members together. Attachment theory presents a way of recognizing and assessing the quality of relationships between family members (Landers et al, 2013). John Bowlby (1988) established attachment theory through the study of mammals and humans. He proposed that infants develop their initial relationship with their mother but not always. In addition, he suggested that this relationship serves as the foundation for all subsequent relationships throughout life. This initial relationship creates a subsystem within the family system. The mother’s responsiveness to the infant establishes the quality of attachment the infant will develop (Landers et al, 2013). In most cases, when an infant experiences their mother or primary caretaker as nurturing and responsive, the infant will develop a secure attachment. However, when the infant experiences a primary caretaker as unresponsive or inattentive, an insecure
Understanding the changes in the market and the growth of e-commerce prompted the organization to invest heavily in its supply chain management forecasting and management system. The development of a network of distribution centers and Direct Fulfillment Centers to position the company to capitalize on the growing e-commerce market indicate a strong understanding of the need to adapt to changing market forces. The company spent over $300 million on new distribution center facilities in 2014 alone, and continues to expand to maintain efficiency in product movement (Cassidy,
Athens was a much more superior polis compared to Sparta because the Athenians invented new ideas and creations that supported the people, such as democracy, the Athenians led the Delian League, and Sparta created the Peloponnesian League after the Athenians created their alliance, and the Athenians changed the ways of their government many times to suit the people, and the Spartans did not.
Management experience will also play a large role in the success of the forecast. The current team is quite new and will gain some needed experience over the next year in the hopes of staying on track for success. The ability of management to ensure product is readily available for the client, their training techniques with new and seasoned associates, and general management style will ensure success or spell defeat for the store.
Key success factors in this industry include on time delivery, quality product, and brand recognition. Supermarkets and restaurants cannot afford to have shelves sit empty for even a moment. For a company in this industry to succeed it must have a model that allows for on time delivery. This must combated by the cost of keeping inventory levels to high, and the risk of wasting inventory that is no longer fresh enough to be sold. Forecasting product demand is critical for any company in this industry to have enough inventories to supply, without creating profit eating w...
54). The first step in forecasting is to develop the opportunity or threat with different alternative conclusions, which is most useful when using a brainstorming method (Ginter et al., 2013, p. 54). In addition, there is a need to identify the associations between the tendencies, changes, predicaments, and or likelihood of events and the environmental categories (Ginter et al., 2013, p. 54), such as the judicial/political environment of the Affordable Care Act. In doing so, it will allow management to see the possibilities of how these issues can affect the future of the company. In turn, this allows the management team to build a better strategic plan, so that the healthcare business has longevity in the fast-paced environment. However, one must assess all the information proposed from the scanning, monitoring, and forecasting of the potential threats or opportunities to the healthcare
However, not everything at wheeled coach was operating so perfectly. As mentioned earlier Wheeled Coach had a major problem in excess inventory. One reason for this was that their bill of materials accuracy was way below standard. When orders were received by Wheeled Coach, the list that tells them the multiple different parts required to make the particular model of ambulance that was ordered, was listing incorrect components. Due to this mistake, a domino effect caused purchase order inaccuracy, as orders are placed according to the bill of materials. Before Wheeled Coach was able to realize that this was an issue they had stock piled copious amounts of excess materials that were not needed in current orders. The final operating failure that Wheeled Coach is experiencing is a different matter entirely. Sales forecasting is not linked to bill of material accuracy or purchase order accuracy, but Wheeled Coach’s inability to estimate their future sales has contributed to the increase ...
Success of the plan In Kraft’s Food Corporation the planning analyst and the other business departments work together in close communication. This aids in the development of a system that allows business activities to align with the corporate goals and targets. The company is also building its performance around successful people by assuring that the plan is tied with the system that involves the use of practically tested strategies. Shared decisions of all the departments including finance and production departments help adding value to the business by improving its competitive place in the market.
Planning aims to reduce uncertainty. It does this by forcing managers to look ahead, anticipate change, consider the impact of change and develop appropriate responses. (Robbins 2012) Through attempted monitoring of conditions in a changing environment, one is able to respond quicker to new information and new circumstances, thereby becoming more flexible. In addition, having the environment under constant observation enables managers to analyse how the organisation will differentiate itself from its competitors, therefore facilitating more chan...
West and Zimmerman see everyone as an actor ‘doing’ or preforming their gender, which is similar to the ideas of Judith Butler. West and Zimmerman differentiate sex as the socially agreed on criteria for fitting into being male or female, typically this being genitalia or chromosomes, at birth. Then there is their definition of gender that is to west and Zimmerman, the degree in which an actor is masculine or feminie, in regard to what the social expectation is for each ‘sex category’ (West & Zimmerman, 1991). The sex category is a system in which the assumed sex of an actor is placed based on their body and behaviours. Another strong point that is made by west and Zimmerman is that as humans there is a large need for us socially to categorise things wether and make an assumption on if that category is positive, negative or neutral. We categorise people in ways of gender, race, age, and sexuality or by social class. Because of this need to categorise, there is also an expectation that one will conform to that category, and not act out on it and if you do then, it would be deemed socially unacceptable (West &
...om product forecasting exercise, this will help customers in getting a better deal from suppliers (Mellahi, K., Johnson, M., 2000).
Another lesson of the game materialized gradually at first, but steadily became more and more evident with each round of play. This lesson was the demonstration of the overwhelming ineffectiveness and utter futility of approaching logistics from the position of total ignorance. With no forecast or sales history to serve as a guide or predictive tool, the participating supply elements simply had nothing to base their projected order quantities upon other than pure conjecture. Operating in a vacuum relative to the other players of the supply chain was nothing less than counterproductive. Closely related was the development of a subdued, but underlying, sense of hostility within the supply chain as orders were placed that didn’t correspond with anticipated amounts. When this type of communication breakdown exists in the real world, an irritation between supply elements invariably manifests itself. Additionally, the resulting waste of time, material, storing of inventory and other resources expenses further fuel the fires of frustration and discord between supply elements.
Therefore, gender brings is the action through which what it names is brought into being; masculinity or feminism. It is the language that constitutes and construct gender identities meaning gender comes after language. The extent to which a person performs the gender determine how much real a gender is. An outside gendered self or a self-preceding isn’t there; gender identity is not necessarily constructed by “I “or “we”. Social conventions enactments which is due to our retrospective reality results in subjectivity characterised by self-willingness and independence as contended by Butler. From this we learn the prerogative nature of gender identity, is determined by the situation in which one is in like society, contact etc. therefore certain social positions can potentially produce a privileged
PepsiCo also realeased a brief on the custom supply chain planning solution.PepsiCo went to PCA ( Pratical Computer Applications) asking for improvements on how they managed their supply-chain planning and forecasting operations. PepsiCo's Supply Chain Planning System provided a secure web-based connectivity. The new software was significantly less and and went along with PepsiCo's practices and perfomance metrics.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.