Managing Through (and Beyond) Down-Times
As the business climate improves, the pace of change will accelerate. Recent history may not reflect future need - tomorrow’s demand will be different than yesterday and is likely to look different than the pre-recession picture. And waiting for the forecasts to catch up to changing demand often creates pockets of stock-outs and over-stocks.
Where possible, we need to anticipate demand changes and where that is not practical, we need to recognize and effectively react to changes:
Resurgent demand within product lines
When demand across a product line changes, recent history may not predict enough growth to meet anticipated customer demand. Failure to intervene may create pockets of stock outs – aggravating customers and wasting time of people that may already be stretched thin.
Item-level forecast overrides can be used to alter forecasted demand for individual items.
When dealing with large numbers of items, maintaining item-level forecasts is overly time consuming. Demand Planning’s Forecast Growth Rules can be used to temporarily boost (or shrink) system calculated forecasts across product lines until the system has accumulated history for the new demand pattern.
In addition to the time savings, forecast growth rules allow the forecasts to react to demand changes (as opposed to firm, item-level) forecast overrides.
New Customers & Changing Demand
Arrival of new customers or changes in specific customer demand can trigger a cascade of stock outs. Using customer-specific forecast overrides is the best method for dealing with demand changes for specific customer(s).
With customer specific overrides, the system continues to calculate forecasts for customers without overrides and then adds the overridden customer demand to produce a final forecast.
This allows the item forecasts to react to the other customers’ demand changes. Additionally, when customer forecast overrides expire, the system automatically generates an item note to show the forecasted demand vs. the actual demand.
Demand Planning provides a few methods to create customer-specific forecast overrides:
§ Keyed in the Planning Information window
§ When a customer needs many item overrides, the New Customer Overrides window can speed up the maintenance process by allowing forecast overrides for a list of items.
§ Demand Planning can import customer/item forecast overrides from an off-line source. If you have spreadsheets with customer forecast changes, please contact us to learn how this data can be loaded into Demand Planning.
Productivity – Getting more done with less
Managing these changes will take time and most businesses cannot commit to additional buyers in advance of growing demand - placing a premium on buyer productivity. Demand Planning tools and processes can reduce time investment.
If you suspect you can get more from your software, a short services engagement may reveal opportunities to save and/or redeploy scarce time.
Irregular Vendor Deliveries
Your vendors will also be challenged to meet demand over the next year – placing more importance on managing due dates for open purchase orders.
To address this need, Demand Planning has been enhanced with new PO Tracking tools that can help you prompt for ship date confirmations and maintain accurate purchase order due dates.
Sales Team / Purchasing Collaboration
Your sales team is often the best source of information about their customers’ changing needs. In many businesses, however, communication gaps between sales and purchasing prevent this valuable information from flowing back to buyers in a timely manner.
OverDrive’s RepLink solution “connects” the sales and buying teams to raise awareness of demand changes and prompts for recommended responses. Accelerating the reaction to change can reduce stock-outs while maintaining leaner inventories. Learn more about RepLink.
We welcome your comments and questions about this, and other, inventory management topics. Feel free to contact us at info@overdrivesolutions.com to start a dialog. 1.702.476.0878
