No matter where you place the forecasting function, you will have a bias in forecasts unless you create an independent department. Production people tend to over-forecast because it gives them fewer headaches resulting from out of stocks. But if they are evaluated on the basis of inventory, they would prefer under-forecasts. Salespeople have a...
I was asked recently to clarify my previous objections to a “One Number” planning world! In the late 90’s and early 2000’s there was a movement underfoot to drive the entire organization from a single operating number. In theory that would be a good thing as long as you have the right number. Too...
No I’m not talking about the Chicago Cubs or deep dish pizza. Rather, I’m talking about our third Best of the Best S&OP Conference, co-sponsored by APICS and IBF last month. It was quite a success with a very nice turnout, particularly when one considers the state of the economy. And the speakers –...
I recently came across this white paper with the above title, written by a company called AGENTRICS, which I found very strange and contradictory. Here are four reasons why: 1. The paper claims since we cannot forecast (meaning 100% accurately), forecasting is unnecessary. The practice of forecasting has caused and will continue to cause...
It’s a warm June morning in Omaha, the phone rings and you answer. The man on the other end of the line explains that there has been an explosion at your production site in North Carolina, thoughts race through your mind, first to the safety of your employees, then to the condition of your...
We all know a strike, natural disaster, large scale power failure/ black out, major retail customer dropping you as a supplier, major competitor dropping out of the market, recall of a product due to contamination and more can have a major impact on your demand, for the worse and for the worse (yes, I...
I always look forward to the IBF’s annual Consumer Products & Retail Forecasting Forum. It gives me a chance to validate the direction we are taking our own forecasting and demand planning processes. There were many different themes that came out of the IBF Conference. The one that resonated with me the most was...
What goes around comes around. Many years ago, when I was young, people in the Northeast and Midwest were upset because they were losing jobs to the South. Let’s call that Phase 1. Later, people all over the U.S. were upset because so many jobs were going to Mexico. That’s Phase 2, and it...
If you listen to the buzz about S&OP at an IBF Conference, you will hear a repeated theme. This seemingly endless refrain is recited by Planners, Vice Presidents, and everyone in-between. You all know the words, so say it with me, “If you want S&OP to succeed, you need Senior Management’s support and ownership.” ...
Folks, it is with great pleasure to welcome all of you to the IBF’s Blog! I don’t know why it has taken us so long to get here with the amount of content, knowledge and experience we have to share in Demand Planning, Forecasting, and the Supply Chain. But, we’ve arrived and now full...