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I recently saw a post by Sujit Singh on LinkedIn that tabulated how one would rate different companies on their Forecasting process based on observed Forecast Accuracy levels. The below ta ...
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The ABC XYZ segmentation has become a cottage industry on its own in the last 20+ years. I remember presenting this in an IBF conference many years ago simply as "Planning by Exceptio ...
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Tectonic shifts are taking place in the global supply chain and the new world order is emerging at a furious pace. The foundations of this shift were laid by the previous administrati ...
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My (Our) practical experience NOT just an opinion - of course, this post is not meant for experts who neither believe in forecast accuracy nor in measuring or creating point forecasts. ...
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When it comes to dealing with time periods in forecasting, the periodicity or frequency of the forecasting cycle is one consideration, and the time buckets are another consideration. ...
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Demand planning is one of the most fundamental operations in supply chain. While planning for the future is already a challenge, assertiveness of the forecast contributes to a major par ...
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If you want to transform the Demand Planning process at your organization, first do a little study of the different touchpoints between Four key functions - * Product Management / Mar ...
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S&OE - Sales and Operations Execution. My response is two-fold. MPS or Master Production scheduling is the process of assigning resources to meet the demand both short term a ...
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The Pandemic has exposed NOT just the gaps in the infrastructure but also our processes and process mindsets. Are you still throwing Darts? The first block in the picture below. ...
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America is running out of everything! This shortage may not be a supply chain problem - this is just a supply problem. Alarmingly, stagflation may not be the result. Stagflati ...
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The term "consensus" is often misinterpreted. The process of driving to Consensus is more important than achieving a single number that everyone agrees on. Driving to Consen ...
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Planning is about the future. Although historical demand is a good starting point, it is important to have a forward looking view - 1. Customer level detailed view is critic ...
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Incorrectly diagnosing inventory planning issues can have massive consequences with respect to excess inventory, stock outs or both. The good news – by analyzing plan changes over ...
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Sales and Operation Planning (S&OP) is perhaps one of the most commonly used processs in many organizations but also commonly ill-formed with its own enterprise mutations that ended up not deliv ...
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An important building block to creating an accurate demand plan is the veracity of your demand history. Since the purpose is to forecast all unconstrained customer demand in the future, w ...
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It is well confirmed correlation between demand visibility and corporate profitability. Almost all organizations with better demand planning and good agility to handle different market scenarios flour ...
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Does the customer really want the product to be delivered on the requested date? Some companies think this is not a true date – customers really don’t know when they ...
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Demand for Accessories can follow the path of the original equipment and can be highly correlated to the demand of the original item - but there are some subtle factors that can affect the ...
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When calculating true demand, we need to classify the orders into the correct month of demand - it depends on when your customers wanted the product. CRDD = Customer Requested Deliv ...
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Today, AI sells everything from driverless cars to carless drivers... Everywhere you turn it is all about AI. Are we peaking on the hype cycle? There is a euphoria on AI among businesses to rus ...
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I mean the Lean Fetish that says Inventory is all evil. I just read a post on Linked-In that said Work-Center Utilization metric is a "Dysfunctional Metric" and goes on to ...
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Irrational exuberance?! Out of touch with reality?! Perhaps a dreamy La La Land of stocks and Index funds fueled by tweets and free money printed in Washington DC?! Investors are ...
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We are currently testing the Azure Machine Learning algorithms for demand planning to see what automated ML can bring for the planning community. One thing that amazed me - how fancy ...
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What is your next step? Even if you have only one step to take and that will be a hop.... hop ... and a series of hops! Planning needs focus! Just like this Canadian ...
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Should forecast accuracy be a stretch goal? Many businesses are struggling with demand visibility and low SKU-level forecast accuracy - something in the 20% range - signaling fundamental bus ...
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The final moment when a demand plan attains Nirvana is when it is passes from the Demand side to the supply chain.... This trigger is termed the "forecast pass" or "forecast release ...
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2 million doses of an unproven vaccine? Ready to ship? Which one? Only Moderna has completed Phase 1 and others are preclinical. There are several companies in the race including ...
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The Great Pandemic created the great disruption although not a dislocation yet - all of us are huddled inside our homes for the most part except for those noble souls namely Front line worker ...
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Month 3 of the pandemic - We are still out of stock on Hand Sanitizers, Face Masks and Gloves. If I ask the store clerk do you have a box of gloves, he looks at me like I am crazy! ...
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All Models are wrong while some are useful. The most useful models are the ones that work with limited and imperfect data and at a time of crisis when unbiased points of view ...
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The bubble has burst and the market crash has exposed many sins underlying the excesses of the past few years. Three significant factors are at play - Excessive asset valuations ...
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Covid-19 Epidemic The World has entered an unusual period in modern times - a large scale epidemic that is spreading like wildfire across the globe and leaving economies in ...
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Demand Bull-whip With the advent of the Corona Virus in the USA, there is pandemonium in the economy besides the pandemic that is creating a lot of turbulence. The US ...
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Is this an Arabian trick? Saudi Arabia has now set a unilateral price and decided to pump enough oil to flood the world. This was not the case in the past. The oil king ...
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CADP is the first level of certification directed towards planners and analysts. The certification will give you a competitive edge to advance in your careers to become either ...
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Are we in one - slowly heading up like that DisneyWorld Splash mountain ride before that exhilarating drop into the water splash?! The one difference between Splash mountain and t ...
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The virus may be under control but the effects will start to show in the global supplychain for a few months. - a good portion of China is in shut down mode. Apple computer warned it w ...
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In a demand consensus process, a typical scenario could be an over-ride of the customer aggregated bottom-up forecast. Without worrying about the sins and optimality of th ...
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The Chinese Government action in the wake of the Corona Virus crisis signals there could be a financial panic in China. China injected 1.2 Trillion Yuan into the banking system to av ...
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Waze and Google Maps are two of the most popular mapping and driving apps in the World, although my unscientific observation is that most men like and use Google Maps and women like Waze ...
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Trash your ABC classification! And do yourself a favor - start over again. The ABC classification was formulated about fifty+ years ago as a folksy tool to monitor inventory ...
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Planning for a short shelf-life or perishable supply chain can be challenging. A large part of the cost here is obsolescence - stuff that you throw away at the end of its ...
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Can your planning process allow for carrying no safety inventory or in the extreme a negative safety stock? In other words, can you deliberately stock out ...
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Demand Planning as a function relies on customer information and sales intelligence that provides insights into customer activity. Most companies have a two-tiered organization ...
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Managing Product Life cycle in SCM can be an intricate challenge – this is a key factor for both Demand Management as well as Supply Chain Management. And one solid sound ...
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Is Demand Planning missing in action in some companies? Or is it completely missing and never part of the operational planning process? I know smaller businesses miss out on the ...
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When people talk about Sales and Operations Planning, there is a grey area. In some of our diagnostic engagements I have noticed that people describe the Demand Consensus process ...
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Valtitude’s core mission is to provide usable solutions! Usable solutions that are worth the price and provide a consumer surplus will always win in the long run... ...
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One of the roadblocks many small companies face (and some large Fortune 500 companies as well) is the lack of a clear insight into the allocation of scarce inventory dollars ...
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In a recent client engagement, there was some lively discussion on Demand Modeling using the Product/Customer Hierarchy. ...
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A key consideration to inventory optimization is to have a strategic view of how to allocate your inventory dollars among different types of inventory. ...
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The SCM planning solutions market is getting pretty crowded these days - almost everyone has a solution on the cloud for Demand, Supply, S&OP and analytics. ...
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Tracking signal is used to measure persistent bias - either under-forecasting or over-forecasting. This is a useful supply chain metric in the planner's tool kit ...
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SAP IBP 1908 brings some much awaited updates to the advanced supply chain planning platform. Some are marginal enhancements while others are significant changes to the tool and is a welcome ...
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There is a lot of commotion on the interface between demand and supply in practice. Several so-called “best practices” have emerged that actually confuse practitioners ...
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The denominator for WMAPE is argued by many: Should it be actuals or forecast? For starters, if the forecast error is small the denominator does not matter in the final metric ...
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Is your organization ready for IBP? How do we know that we are implementing this nifty solution that could NOT be used if the process and people are not ready? ...
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SAP IBP defines additional metrics to evaluate the forecast quality of the statistical forecasts compared to what we had in SAP APO. The biggest improvement in IBP Demand is addressing the MAPE ...
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For the following scenario which of the following historical orders data stream you would consider from a demand planning perspective? ...
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Some planners just are very proud of the fact that their business is complex – 20K SKUs, 20 DCs and thousands of customer sold-to locations ...
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What is the big fuss about Trade with China? In 2017 we imported $500B worth of products exported about $125B. Here is a trend of Trade deficits over the last 15 years & ...
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As the leading authority on Model Tuning and Optimization in SAP SCM (formerly known as APO) we have extensively researched on modeling capabilities in their IBP Demand solution ...
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Should we create Customer-specific SKUs to reserve inventory for our best customers? I hear this client question often ...
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Many are taking shots at the very thought of measuring Forecasts itself leave alone with WMAPE. And some are taking shots at the discipline of Forecasting itself &nb ...
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The Planner! Sounds like a movie title – the movie we have not seen and Pixar has not thought of…. What is the major advantage of uniting the two roles into one human being? ...
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Who are Sales Planners? Do you have a function called Sales Planning in your organization? Most companies call it Sales Planning or Sales Logistics or Sales Operations & ...
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The Bitcoin has just breached 14K. One bitcoin is worth 14,000 US Dollars as of the close of the market on December 6th. It was trading at 12K a couple of days ago. &nbs ...
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Leading brand name companies such as P&G, General Motors, General Mills are facing the onset of unknown competitors powered by big data analytics and technology ...
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Do you consider a Constrained or Unconstrained Forecast? I had a long conversation recently with the President of a CPG company on adding some form of Forecast quality as a metric for Sales Managers ...
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The perfect method to measure customer service is to find out how your customer is measuring you. Over time organizational score cards evolved to negotiating tools between different functions ...
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What to measure for forecast accuracy? SKU/DC, SKU/National or SKU/Plant? It is now well settled that we want to use the Weighted MAPE to measure the quality of the demand plan. ...
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Following are 17 suggested resolutions for your demand planning in 2017! 1. Trust the Stat Forecast . Although there are caveats, if tuned correctly, Stat can do wonders. ...
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When we think about IBP – Integrated Business Planning – we need to consider the roles of the various planning functions in the company: ...
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“The measure of a person’s strength is not his muscular power or strength, but it is his flexibility and adaptability.” The same holds true for businesses and supply chains.& ...
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Key factors for a successful supply chain – Product Assortment Visibility to Customer Wants and Needs Ability to successfully modify customer demand Inventory Management ...
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There is a huge competition amongst e-tailers and retailers to win customers by providing good customer service and quick delivery. Furthermore, all of this at a low cost. & ...
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Inventory Management has been a pain point for many companies – retailers, manufacturers and service companies alike. Companies have been fighting high inventories with various initiative ...
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In the past few years Target has expanded its business into selling fresh produce, meat and other perishable food items. With being ‘out of stock’ being the main pain point Target ...
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In recent interactions with many companies, we have observed that people don’t use a specialized tool for forecasting. Yes, they do most forecasting in EXCEL. ...
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As we all know SAP is an Ocean where the chance of getting lost is quite high. Below are key takeaways from my experience while working on SAP Demand Planning projects. ...
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October Demand Planning and APO workshop I am just getting ready for the Chicago trip – our annual event in Demand Planning. But this ...
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Quite often we get these questions from our constituents and Network members about the definition of demand. 1) Can I consider shipments as my demand? ...
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I hear frequently calls for help saying MAPE is high or saying MAPE is unreliable. Recently we encountered two situations where the calculated MAPE & WMAPE were negative. ...
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The importance of Black Swans in our planning process Our everyday experience in Social media appears to be clouded by a few words and excitement. ...
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What is the state of S&OP today? I interact with supply chain professionals in conferences and consulting assignments across different industry verticals. ...
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When we review Supply Chain Dashboards, there are a variety of colorful metrics. Are they the right metrics – Are they calculated right to show true performance? ...
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In some recent visits, I have noticed something interesting about KPI Reports & the calculations used. It appears that some companies report the Fill Rate. ...
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During the Demand Planning and Sales Forecasting workshop in Boston, we will be discussing the demand planning challenges in Oil & Gas, Chemicals, Industrial, F&B and CPG companies. ...
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Order to Cash Process When companies take a hard look at their business model and the underlying process, what is the key objective that is motivating them? 1. Return on Investment ...
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Some say yes………. and some say no! There are many things questionable about Statistics and Modeling and of course, the famous or infamous, Normal Distribution. ...
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SAP APO for Weekly Forecasting Generally, demand planners forecast at the monthly level since forecasts are well behaved and seasonality is easy to identify in months. But ther ...
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How Important is Integration ??? Continuing on this discussion on the important properties of a Planning Software application, I will discuss integration this week. What is integration ...
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Planning Software – What should it be ??? Having worked with many software applications for planning – demand, supply, finance, and S&OP – I have experienced a sense ...
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We will be hosting our first ever public workshop in Texas due to popular request from our Oil & Gas colleagues and planners at Oil Field Services companies. Demand Planning Net will be ...
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There was an interesting technical issue at a client using SAP SCM with substantial investment in demand planning using SCM tools. After some googling, I landed on this blog ...
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Demand Planning Net focuses on the disciplines of Demand Forecasting, Demand Planning and Demand Management besides the related areas of S&OP and Inventory ...
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Forecast Error Benchmarking Our Newsletter readers and forum participants ask very frequently: · Which metrics should I use to measure my forecast performance – ...
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Throw away that application software if that is not usable! Your planners may have already boycotted the tool and resorted to Excel and offline analytics for most of their planning work. T ...
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Find out and bench mark with your peers from companies such as Michael Foods, Chemtura, Newell Rubbermaid, Johnsonville Sausage at our upcoming workshops. With very strong response for our ...
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Are you creating Forecasting classes using your Supply chain’s ABC classification? Bad idea!! I have preached Usability and Model tuning for demand planning applications like SAP, JDA ...
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Demand Planning just published our first e-Book Forecast Reconciliation and Proportional Forecasting! This is the first direct-to-Kindle book from Demand Planning, and we’re proud ...
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Intermittent demand or sporadic demand is a fact of life. In many cases, demand occurs in one lump followed by periods of no demand. What drives intermittency in demand patterns? ...
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There was a question on Linked in about the use of the NORMSINV function in Excel. Initially the poster mentioned the NORMSDIST function. But for safety stock purposes, you already know th ...
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I just had a conversation with a Fortune 500 executive recently. He mentioned his company is spending tens of millions of dollars currently upgrading from SAP APO 4.0 to SAP SCM 7.0 D ...
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Every time we come across a slow-moving item, we have to spend quite a bit of time analyzing the different factors to come up with a forecasting strategy that will handle the challenge. In ...
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One of the puzzling questions that Demand Planners ask in our training workshops is why their software produces a flat forecast 90% of the time. An expensive software that took an arm ...
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We hear quite often, that forecasting is a waste of time. People often cite the weatherman and laugh at forecasts and forecasting as a productive process. As long as you don’t l ...
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In response to our workshop announcement, we have received several emails with number of questions. Given that we have only experienced the tip of the iceberg when it comes to demand ...
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Press Release from Draper Laboratories CAMBRIDGE, MA – Draper Laboratory is leading a team that aims to improve long-term intelligence predictions through software that weights most ...
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After a two year hiatus, I am looking forward to facilitating our hugely popular two day workshop on Demand Planning and Forecasting in India on January 27 – 28, 2012 Friday and Saturday ...
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SKU Level ForecastingSKU Level Forecasting Talk to any supply planner, they will say they need a forecast at the SKU level. The more detail the better. So the demand planner is on ...
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When I was a beginning student of Statistics in High School, I was fascinated by moving averages. This is pretty cool stuff to get an average that moves over time rather than the plain ...
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We had the opportunity to test drive the Predicta Forecasting application over the last couple of weeks. This is an Excel add-in software available as off-the-shelf (or more appropriatel ...
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If you are using SAP APO, did you notice APO DP calculates and defines error metrics with its own unique formula that is different from conventional calculations. It is critical to under ...
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There are more questions on the comparison between FEQ and GMRAE. Please review the material on the http://www.demandplanning.net/DemandMetricsExcelTemp.htm. We will post the ...
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As demand planners, have we added value through forecasting? Is your forecasting effort efficient? You can answer in the affirmative, if your diligent efforts in demand planning has r ...
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Based on some of the inputs from our clients, workshop attendees and the chatter on Linked-In, we will be doing a 45 minute session on how to forecast in excel using Decomposition models. T ...
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We just published a new Demand Metrics Diagnostics Template for all DPNet users. This template is provided as a reference to calculate the health of the modeled forecast for one Product/SKU ...
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Hi All, As we know last weekend was long holiday for US. Our sales was also affected. So for forecasting can anybody suggest how to include calendar effects in ARIMA model using SPSS ...
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September 21-22 at Four Points by Sheraton Our recently concluded May 2011 two day Demand Planning and forecasting workshop was an immense success. I personally enjoyed the interaction ...
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Tracking Signal is used to measure forecasting bias over time for the same SKU/Product especially when bias approaches extreme proportions and crosses a threshold. This comes from the Quality ...
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Regarding the measurement of the forecast accuracy I would like to ask a question. The Formula 1 below shows a common (or intuitive) suggestion and is het one I would use as well. Ho ...
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I have some confusion of MAPE/MPE calculation, since the source is different, the methodology is also different, indeed confused. For MAPE, 1)average of absolute error/actual demand 2)sum ...
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I will be speaking on Customer Focused Supply Chain collaboration on Wednesday Oct. 13th at the Bear & Grill Restaurant, Orange CT at 6:30pm as part of the New Haven APICS PDM. Here is ...
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A user in an APO forum lamented: “I am trying to use the Moving Average option in APO DP but I get a static forecast that remains constant for all the future months based ...
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I will take SAS software and Forecastpro as benchmark tools here to compare the capabilities of APO DP. Between SAS and APO DP, the difference is huge. You have an array of statistical mode ...
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When calculating MAPE what is recommended when actuals are positive but forecast is 0 (for example when clearing obsolete stock)? Can you make the forecast match the actual quantity so a ...
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There was a post on one of the Linked-in Groups that got my attention today. How do you reduce demand volatility using better forecasting? Forecast accuracy and Demand volatility are ...
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I saw this linked in comment in a discussion group: “I hate to get technical”. That expression always bothered me, but I am wondering who IS getting technical….who is usi ...
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One of the Key steps to improving your Value chain is to measure and score-card the current state. If you don’t measure where you are, how will you know what you are improving and ...
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Consumer Packaged Goods Companies seeking forecasting accuracy improvement are faced with a number of issues such as: • Data availability (especially Point Of Sale or channel data) &b ...
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Policy makers hang on to the idea, or more like fear, that it is too risky to let big banks fail. There is a lot of talk and surmise that Lehman Brothers failure may have caused some of the pr ...
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In the demand forecasting tutorial in New Jersey, there was a key question on forecasting during a recession. Forecasting is relatively easier in a boom. As they say the Trend is y ...
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The forecasting workshop on Oct 22 and 23 held at Whippany, NJ was well attended by companies from different industries from Consumer goods, to medical devices to Technology companies. We had ...
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Workshop is conducted on Thursday and Friday, so you can spend the Spring weekend in gorgeous Lexington, MA or see the yachts on the Charles River or just cruise by the Boston Harbor! ...
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Bullwhip effect is a phenomenon of demand being overestimated or underestimated as it passes through various stages of supply chain resulting in exaggerated supply fluctuations. The increased ...
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I have heard feedback from many business users and demand planners that SAP APO DP is complicated. Some think it is too rigid!! I have heard that it is too enormous and complex. &n ...
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I have heard from Consultants and business managers across many companies: Very rarely there is user adoption of standard APO forecasting techniques. Users typically use an off-line ...
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Popular software packages have forecast alert monitors. Each software may term it differently: 1. Manugistics calls them lists 2. APO and Dematra call them as alerts An ov ...
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Tracking Signal Tracking signal is a measure used to evalue if the actual demand does not reflect the assumptions in the forecast about the level and perhaps trend in the demand p ...
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The simplest approach to model promotions is through interventions. This is also called event modeling in the literature. We collect a list of events and classify into types of events by the i ...
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We have now settled that MAPE or Mean Absolute Percent Error is the measure for forecast performance for a planner/Division at the end of the month. It is more popularly used as a cross- ...
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Why is it important to learn new techniques than banking on century old DOH measure? The Days of Supply is a thumb rule calculation used to manage inventory during the era of green accounti ...
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MAPE = Mean Absolute Percent Error. This is the common error measure used by the Supply Chain profession. Demand Planners and Demand Forecasters spread across the manufacturing sec ...
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Welcome to the forecasting blog! These are collection of thoughts on forecasting, demand planning, Sales and Operations planning and corporate strategy! Please contribute your t ...
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To check out the contents of the format library, we use the proc format statement with a fmtlib option. proc format fmtlib library=catlgdata; select $class $desc; run; ...
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SAS is very helpful but can be complex as well. Because of the flexibility it offers, it has to be necessarily complex. The manuals from the Institute are not very comprehensi ...
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The SAS INTX function is very useful however you should be careful when using the time increments. If you use next_month=intnx('month',today,1); it ...
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I wanted to use Proc means to calculate weighted statistics but the options seem too involved. In the specific example, you have hundred days that are zero and the remaining d ...
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We need to know that SAS uses the first row of data right after the header row as a guide for the values by column! So if the first row contains a blank value for a column, th ...
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S&OP Best practice: Engage in ongoing cross-functional communication rather than wait for “the meeting” once a month! Many organizations have respective functional depart ...
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The New Jersey Chapter of APICS invited me to present a one-day training workshop that elaborates on the best practices speech I have been giving this Fall. I spoke at the Vermont Chapter and ...
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Thanks to Yingli for the question. Here are the equations that you originally sent through email. ? ==> This calculates the average of the Percentages. ==> This gives you the ...
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