Forecast Accuracy Key Trend in Consumer Goods Supply Chain

What are the key supply chain trends driving process and technology improvements in consumer goods companies today? Supply Chain Digest looked at five key trends. Getting better forecasts is an elusive and never ending goal, but many consumer goods companies seem of late to be making real progress.

The payoff, of course, is huge. The numbers vary by company, but generally every 10% improvement in forecast accuracy can be worth millions to large- and medium-size manufacturers. Demand Planning software plays a key role here, and one well beyond the “number crunching” of various mathematical forecasting techniques (though those are, of course, important too).

But in many respects, the most important role of the software is actually the process discipline that such tools can bring. That process support comes from increasingly powerful workflow capabilities that enable users to configure and then execute monthly rolling forecasting cycles, achieving input from sales, marketing, finance and other stakeholders on a fixed schedule, with exception alerts when a step in the workflow is not completed as scheduled.

Also increasingly important is a series of web and mobile tools that allow sales reps and channel partners to more easily provide required input. We expect to see further roll-out of these kinds of applications, especially of PDA-based tools that allow sales reps to easily update customer forecast information – and to inform demand planners of qualitative information that isn’t part of the formal forecasting process.

Mobile applications can enable sales reps and others to quickly submit that insight as they become aware of it –but it also takes a culture, such as Heinz has built, to put a premium on everyone contributing to that intelligence gathering. Of late, many consumer goods companies are also adopting newer “demand sensing” capabilities to react more rapidly to actual consumption data.

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