Emcien Aims to Change Auto Industry Forecasting

Emcien, a software firm dedicated to solving complexity problems in the discrete manufacturing industry, give automotive and other discrete manufacturers the ability to see into the future of their product lines by forecasting based on customers' "feature attribute-based demand."

According to a 2006 BPM Forum report, 90% of manufacturing companies continue to rely on basic spreadsheets to create analyses and planning metrics of multi-layered feature configurations. They take time-specific data and forecast the coming year based on what is actually outdated information.

Based on last year's data, another major auto manufacturer announced last week they would decrease production of large trucks and SUVs 15-20% in 2009. Is this a surprise to anyone? Consumers have been asking dealers for high-mpg vehicles and hybrids to test-drive for over six months. They've even placed advance orders. Why are the automotive companies just now reacting?

These companies only forecast at the product line level and the answers lie in the details. "Today's consumer speaks with a purchase," says Russ Caldwell, Emcien Chief Technology Officer. "If you look deeper, at the customer feature choices, you see more granular trends in real purchase data."

Emcien's software analyzes buying trends in feature choices — not just product lines — so product planners can forecast the features that are important to buyers. "We can treat mpg and time simply as additional variables," offers Caldwell. Companies can then immediately redirect resources and processes toward providing the optimum sales mix. This type of forecasting benefits everyone — customers get the features they want on product configurations that are profitable to the company.

Product Mix Management is an issue across all discrete manufacturing. Even build-to-order giants, Dell and Toyota have recently admitted that highly configurable products require maintaining the right parts to anticipate every need. The fickle demand of today's marketplace requires foresight. Changes in a product mix today should have been forecasted several months ago.

The marketplace will continue to get more competitive and companies will have to become better at detecting customer buying trends and correlations. The market agility of these manufacturers relies on accurate forecasting.