Understanding
How Better Forecasting and Planning Adds Value
When you get better at forecasting and planning, you get better
at being at the right place at the right time with the right
goods. This generates --
- More Sales and Better Customer Service
- Less Cost
- Less Uncertainty and Risk
More Sales and Better Customer Service
When a company gets better at anticipating demand and being
in the right place at the right time with the right goods
and services, it can't fail to make more sales and provide
better customer service. (If customer service is already extremely
high and has been so for years, it may be that the company
has some un-tapped opportunities and can profit from taking
a few risks -- the case of Schwinn bicycles in the '60s and
'70s comes to mind here.)
Less Cost Getting better at anticipating
demand and being in the right place at the right time with
the right goods and services means a company decreases being
in the wrong place at the wrong time with the wrong goods
and services. Since the forecasting and planning drive budgeting,
and control with respect to everything -- product development,
marketing, selling, production levels, production resources,
inventory, distribution, human resources, and financial planning
-- improvements in accuracy mean cost savings in all areas.
Less Uncertainty and Risk An intuitive way to understand
the value of reduced uncertainty is to appeal to the saying,
"A bird in hand is worth two in the bush." As a
company improves its forecasting and planning accuracy its
business prospects move toward the certainty of 'a bird in
hand' and away from the uncertainty of 'two in the bush'.
The Right Inventory in the Right
Places at the Right Times
FD6 Inventory Solutions generate More Sales!, Better Customer
Service!, Less Cost! Applying improved forecasting to
inventory levels at stocking and distribution locations is
a perfect example of how getting better at being in the right
place at the right time with the right goods generates more
sales, better customer service, and less cost.
McConnell Chase Software Works actually
began as a supplier of sales forecasting and inventory management
solutions to manufacturing companies. Today we offer a complete
set of inventory management solutions for ...
Service Parts Planning,
Finished Goods Planning,
Vendor Managed Inventory (VMI),
Distribution Requirements Planning (DRP)
Our inventory management solutions are highly
effective, very fast to learn, deploy and use, and industrial-strength
-- able to handle high volumes with speed.
Optimize Accuracy & Maximize
Results
McConnell Chase helps companies improve forecasting and planning
from whatever their level of expertise onward. To optimize
accuracy and maximize results, we offer highly developed solutions
that support best practices in Collaborative Sales Forecasting
and Demand Planning.
Collaborative Sales Forecasting
and Demand Planning
FD6 provides a comprehensive and efficient process for factoring
in all information on what sales are expected to be. This
process combines...
(a) statistical forecasting, which extrapolates
the future based on the past,
(b) sales force forecasting, which calibrates and imports
the sales funnel and other customer and prospect intelligence,
(c) judgment, which captures different assessments of the
impact on sales of economic, competitive and company events,
and
(d) management input -- goals and strategy, direction and
insight, new product release plans, company projects, market
research, marketing plans, promotional plans, financial and
operational considerations.
Superb Statistical Forecasting
In addition to our own statistical functionality, McConnell
Chase licensed and incorporated the world's best automatic
statistical modeling engine, the M3 Competition winner --
www.forecastpro.com/company/news/m3.html.
With this statistical engine you can run the system on automatic
pilot and know that FD6 is doing the best job possible.
Among the many excellent methods FD6 provides for generating
statistical forecasts are methods for intermittant or low
volume items, and methods with non-normal distributions: Poisson,
binomial, negative binomial. FD6 allows for conditioning outliers,
providing multiple demand sources (EDI, POS, etc), normalizing
irregular periods, optimizing accuracy at specific time periods,
data limiting, and substitution/obsolescence linking. Specifically,
the methods include exponential smoothing, double exponential
smoothing, Holt, Winters, Box-Jenkins, Curve fitting, Linear
and Multiple Regression, Quadratic curve fitting, Exponential
curve fitting, Growth curve fitting, Croston's, simple moving
average, fixed moving average, random walk.
Collaboration and Input from any Point of View
To facilitate collaboration, FD6 provides a comprehensive
pivot table, plus extensive graphical and reporting functions,
that allow people from every department to aggregate, slice
and dice, evaluate, and participate in the forecasting process
according to the units and levels of detail in which they
think, plan and work.
The Most Effective and Efficient
Process for Improving Accuracy
FD6 saves all inputs and expectations from each forecast cycle
and provides a complete set of tools for identifying, prioritizing
and correcting forecasting and planning errors. In forecasting
and planning you cannot expect zero error, but you can expect
people to learn from their mistakes.
Learning from mistakes and correcting bias
by identifying and prioritizing errors, backtracking, and
figuring out how the company went wrong is a chief practice
for factoring better information into a forecasting process.
Another way of putting it -- error analysis is forecasting
and demand planning's quality control. FD6's functionality
is especially strong in this area.
Forecasting is a challenge. In doing
forecasting well, a company pushes the envelope of its own
knowledge of its markets and capabilities. Maximizing improvement
in sales forecast accuracy requires a comprehensive information
system and a practice. This practice, like any other practice,
is a matter of learning by doing. Everything that a company
learns as it proceeds is competitive advantage at anticipating
demand and at being in the right place at the right time with
the right goods and services.
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