Maria Simos CEO e-forecasting.com

Last night while I was at the joint APICS/IBF/CSCMP Holiday Networking Collaborative in Boston, MA these three words came to mind, “Strength in numbers.”  But before I can explain these three simple words, I should first explain all the abbreviations, right?   APICS is the Association for Operations Management, IBF is the Institute of Business Forecasting and CSCMP is the Council of Supply Chain Management Professionals.  These groups came together last night for a holiday party which was a perfect mix of work and play.

The night started with simple networking and visiting with the six sponsors of the evening: Archon Interactive LLC, Boston Strategies International, Demand Planning LLC, Demand Solutions, Marino Associates LLC and McInturff Associates.  Visiting sponsors was enhanced by the possibility of winning major prizes which attendees could be entered to win by getting stamped at the vendor’s booths (the banquet table was full of these prizes and they did the trick!).  After some networking, we all enjoyed a lovely meal at the Montvale Plaza where we were broken into groups by tables of 8.  Discussions of best practices began, aided by a complimentary bottle of red whine at each table.  During dessert Clark Merrill, a dynamic speaker from Dale Carnegie, gave a talk on ‘Soft Skills in a Tough Economy.’ With this lively presentation in mind, two panels were put together where we discussed sales and operations planning and lean manufacturing. The highlights of these panel discussions can be found here on my twitter stream.   Afterwords, the planned session wrapped with plenty of giveaways and door prizes.

The interesting thing was that after a full day at the office, fighting traffic and then attending this event which went until 930 PM, NO ONE rushed out the door.  In fact, it was quite the opposite.  People stuck around.  Most in the crowd continued to talk about lessons learned and to make connections.  The content was so good, the contacts so valuable that attendees lingered.  This got me thinking about strength in numbers and a discussion I had with one of the sponsors. It began when I asked him how membership has been through the recession.  Being an economist, my assumption would be that membership in associations with a focus on education, training and networking such as APICS, IBF and CSCMP would be high as workers would look to increase their skill set, network if they are unemployed, and work to raise the value of their careers to ensure future employment and growth.  It turns out that I’m a pretty good economist.  The sponsor I was speaking with confirmed my assumption and I learned that membership has done well through the recession.  Groups like these are such a huge source of support, training and sanity through recessions for job seekers and the currently employed alike.

Think about how nice it is to have a chance to talk about your job with people who actually understand what you do all day?  That is what happens when you attend an event like this if you are in demand planning or operations management.  You get a room full of head nods and understanding when you ask questions like “What kind of advice can you give if you have a hostile management environment when it comes to forecasting?” and you get some solid advice on the simple yet daunting question that is on many people’s minds, “How to get started with lean manufacturing?”

And if you are currently looking for a job, or you are in transition, it’s nice to rub elbows with those that were your peers and who you would like to be working with.  Miss talking about forecast error and six sigma? Sign on for an upcoming event, such as the next Boston APICS event to hear how Welch’s successfully implemented S&OP, or check out www.ibf.org to find out when their next chapter meeting will be and trust me, it will be like riding a bike.  There is strength in numbers, but you have to go be a part of these numbers, or groups, to reap the benefits.  Maybe this would be a good resolution for those who have not been feeling a sense of camaraderie recently.  If that’s what you are looking for, events like this is where it’s at.  My first time going, I already have a slew of new contacts that I know I can reach out to any time with questions, support or advice.  That’s the true value of strength in numbers.

Follow this link to find out how to start an IBF Chapter near you!

Maria Simos CEO e-forecasting.com

This is a good question. As I traveled down to Florida for the IBF’s Supply Chain Planning & Forecasting: Best Practices Conference w/ Advanced Practices in S&OP Forum I wasn’t sure which was harder to explain as a concept.  After a few days at conference I can, with confidence, say that Sales & Operations Planning (S&OP) is much easier.  I’ll save my understanding of exactly what Supercalifragilisticexpialidocious is for another time.

In order to recap this conference there are some strong overriding themes you must get acquainted with in regards to sales and operation planning and demand planning, as well as some key highlights that were found in some selected general sessions:

Innovation:To fully develop and be successful at sales and operations planning you need to be innovative in how you approach the whole process.  During the Toro presentation on “How Home Depot Synchronized their Supply Chain with Consumer Demand”, Nadim Zoberi stated, ‘innovation drives success.’  Using product innovation and building on their knowledge base, Toro is introducing a new line of battery operated mowers.  David Zatz from Post Foods shared in his presentation “How to improve Your Forecasts by Including Marketing’s View” that innovation, along with equity, price, merchandising and inventory work together as drivers for the forecasting process.

Trust: At times during the conference, I thought I was in marriage counseling sessions.  It is true that trust plays a huge role in yielding successful results in sales and operations planning and forecasting.  During the Keynote Presentation by OfficeMax’s Nikhil Sagar, he said that you need to build trust by example.  It’s important to share information, this is the first step in building trust with your suppliers, and even internally.  During the Round Table discussion, one of the tables I sat at was centered on Collaboration Within and Outside the Organization. Someone shared that if one of his company’s vendors provides them with a forecast, they are given a price break.  This, however, did not bode well for another planner at our table who then interjected, “But some of our vendors can be vendors for our competitors. How can we build trust?” And then, of course, there was the presentation by Liezl Smith of South Africa’s APICS who presented a slide saying that South Africa is faced with serious trust issues.  The world does not trust South Africa yet, although it may be the next frontier. How to build trust? Certainly seems worthy of further presentations and workshops at future conferences.

Dedicated Resources: Mike Levely from Xiameter/Dow Corning shared that one of the keys to their success in supply chain improvement was that they had a dedicated implementation team along with sub teams that were 100% focused on the transition.  In his presentation, “How Forecast Accuracy Impacts Inventory Costs” Joseph Motta from Navistar echoed this sentiment.  He advised implementing a change in business processes in several phases.  He has been in three system implementations and found that the most successful method use by organizations was in phases rather than a shotgun approach.  Both Mike and Joseph stressed that people should be dedicated to and best to fit the role.  Another neat tip that Mike gave us was that while goal setting and making a to-do list, you should also think of a ‘stop doing list‘ to improve your organization.  This will get you to start thinking differently and build new processes that are efficient as well as putting an end to doing non-value adding activities.

New this year to IBF conferences, was IBF Bingo! This was being played by conference attendees throughout the event.  The Bingo! board had a matrix of ways to enhance learning, collaboration and social media efforts.  Some of the cells included Meeting five new contacts, tweeting and asking a question during a session.  Ever competitive, people were enthusiastically playing along and working hard to get to Bingo and receive a nice prize. Unwittingly as attendees worked their way in columns or rows to hit Bingo!, they also,  got to meet five new contacts, tweet up a storm on the conference and have more dynamic sessions with more interactive question and answer sessions.  Tricky, tricky conference organizers.

Innovation, trust and dedicated resources are basic tenets that go beyond bringing your organization to the next level in terms of S&OP and forecasting.  Take a look at the online slide presentations to see what else was covered, or better yet, subscribe to the Journal of Business Forecasting and attend the next show.  Soon you’ll be singing the praises of S&OP too!

Maria Simos CEO e-forecasting.com

What do battery operated lawnmowers, $1B of crop protection annual R&D and making chemical drum orders on your iPhone have in common?

More than you would think.

All of these things have been used as examples of how the world’s leading companies are working to improve their supply chain planning and forecasting process at this year’s IBF Supply Chain Planning and Forecasting Best Practices Conference in Orlando Florida.  All you have to do is see past the nouns and look to the processes, which are much more the same than you’d think.

During all of the sessions at the best practices conference, speakers and attendees have shared important takeaways from their company’s attempts to improve their bottom line by bringing  more efficiency and collaboration into their sales and operations planning (S&OP) and forecasting functions.

During the S&OP Workshop led by Andy Coldrick of Ling-Coldrick.com, Rick Ling of Demand Technologies and Mike Wilson of Syngenta, the conversation started with this simple statement:

Everybody agrees on a number for one hour a month.

That shouldn’t be the case.  There is a need to understand different views.  Why are different functions coming up with different numbers? What are the assumptions they are using? It is important to understand the assumptions because they are the real story behind the number.

For S&OP to be successful, it needs to be collaborative.  The Breakthrough Ling Coldrick Model provides steps when followed ‘ from right to left’ makes this possible The steps first start with (rather than end with) the senior business management review. If you start from the top, you get commitment from the senior management team and the rest of the pieces fall into place such as managing the portfolio and new activities, managing demand and supply and using integrated reconciliation. It is important to link dollars and value.  Until these two are integrated, you will have two different meetings, the demand planning meeting and the business meeting.

Mike shared how Syngenta used these principals to move from a command and control environment to a growth mentality.  The main steps they followed were shared in a helpful assessment guide that was provided for us as a takeaway from the session.  The process is broken down into the main steps following the ‘right to left’ approach.  As mentioned above, the first of these steps is the senior business management review.  During this step, you look at what has changed about your views of the future since last month and what actions you need to make.

In another session, Dow Corning’s Michael Levey shared in his presentation titled “Business Model Innovation Spurs Supply Chain Improvement.” The session delved into how the company was able to split the business into two brands and in doing so was able to limit inventory, optimize operations, minimize overhead, consolidate transportation, work in emerging markets and quickly adapt to changing business strategies.  They broke out their products based on innovation or efficiency.  The innovation brand has remained Dow Corning which focuses on markets and specialty products and services.  The efficiency brand called Xiameter is entirely online based. This is where customers input their own orders on the web which has an SAP backbone with no human intervention.  Orders can be done in as little as 43 seconds from login to confirmation or as one customer shared with them, via iPhone while on a shopping trip with her daughter.

Yet another session titled “How Home Depot Synchronized their Supply Chain with Consumer Demand” Nadim Zoberi from Toro shared how they moved to a lean model with daily replenishment.  This process has the benefits of less stock outs, is much simpler, has reduced inventory on Toro’s books by 250K units and even brought them the honor of winning an award from Home Dept as Partner of the Year.  For Toro’s business, they also have achieved a 50% reduction in warranty claims and large capacity improvements of up to 50%. This was an important shift to work to build to retail demand rather than the sales forecast. They optimized the use of their seasonal distribution centers and now have ‘supermarkets’ with specific inventory levels set.  Using electronic pull, replenishment is based on a daily cutoff sheet.   And Toro has not stopped there.  Nadim said that as they get leaner, their strategy continues to change and they continue to make bigger goals to increase efficiencies.

As you can see, the lessons from one industry and company can easily be translated into lessons that are universal in helping plan better in your own organization.  We have a lot more in common than you would think. One person’s experience with lean manufacturing for lawnmowers can help with another’s shoe manufacturing processes.  You just have to see past the nouns and look to the processes, which as I have witnessed during several IBF Conferences including this one, is happening, in sessions, in hallways, over dinner and I imagine in the Disney Parks too.

Maria Simos CEO e-forecasting.com

Teamwork, collaboration, transparency and increased profitability. Sounds like some Disney Magic, right?

Well based on the experiences shared from the panel at the Institute of Business Forecasting & Planning’s kickoff event on Sunday dubbed the ‘Advanced S&OP Practices Forum’ it’s in fact real and achievable.  The panel, which was an opening to IBF’s Supply Chain Planning & Forecasting: Best Practices Conference, spoke to an eager room of over 100 demand planners ready to listen and learn about how to take their own company’s S&OP to the next level.

Tom Wallace who was the MC for the afternoon session, gave us all a history lesson, sharing with us how the real founder of S&OP was not only ahead of his time and changed the way businesses operate, but was also sitting right in the room with us.  Dick Lang created Sales & Operations Planning, also known as S&OP, in the 70’s and sat just three rows ahead of me during the forum.  How lucky of a group was this to have the opportunity to attend this conference with Dick Ling who also would be leading a workshop the next morning called ‘How to Align Sales & Operations Planning with Strategic Intent.’  This elevated the excitement in the room and put the rest of the discussions into a greater context.

Before having the panelists take over, Tom shared some slides as a warm up.  He went over the four fundamentals of demand planning which are demand, supply, volume and mix.  He stressed the importance of looking at demand as being the driver. He went on to explain that if we do so  that demand and supply will become balanced, either by our own actions or external factors whether we like it or not.

There are a few key themes that resonating in all the panelists:

• S&OP will increase collaboration, communication and teamwork
• Top management needs to be involved so needs to be implemented top-down
• S&OP runs your business and needs to be part of your culture

Highlights from the panelist discussion, who Tom dubbed as ‘true innovators:’

Chase Winsam of Whirlpool Corporation – Chase took the mic but said that rather than speak about S&OP, he wanted to sing some karaoke. Instead of breaking into song however, he shared with us how Whirlpool was able to reduce forecast bias from 16% to 2% by implementing stronger S&OP practices, while also decreasing inventory dollars. This was all accomplished while maintaining 90% service levels.  An easy idiom he used during his presentation while showing us some outputs was “Get it graphical then think practical.” It is important to rationally think about the numbers and what they are telling you.

Grant Hoffman from Motorola – Grant got our attention quickly when he started his talk with the fact that Motorola had been losing $400 million a quarter during the recession.  The company’s focus turned to their relationships with their suppliers hoping to reduce shortages. This became a process they now call supplier S&OP.  His words of advice were that you need to start at the top, keep confidentiality when working externally, find the proper decision makers, do not be afraid to commit and to have immediate communication on late breaking news.  It may take up to six months to build a relationship with a supplier, but there is a lot of value in these relationships and they are well worth the effort.

Jay Nearnberg from Pfizer – Jay started his presentation by saying that innovation is so important in a stagnant economy like today (and like in the future as I know we are forecasting very low growth domestically and globally overall).  For Pfizer’s business, there is a strong push towards real-time.  Their dashboard as well as their forecast is updated every day.  Most of these overrides come from key customers, the knowledge of a promotional shift or new product information.  The ways that S&OP add value are manifold: cross functional engagement, the engagement of all  management levels, transparency of assumptions, shifts caused by situations, all departments get on the same page, and scenarios and trade offs are discussed along with pre and post-tracing.

Alan Milliekn from BASF – To round out the panel, Alan’s lively presentation shared how BASF uses S&OP to maximize gross profits globally.  Some benefits they have seen include a shift from local volume orientation (‘just keep running my plant’) to global value orientation (‘let’s make money, let’s make money!’).  Also, there is built in transparency and improved communication as well as improved teamwork and of course, increased profitability.

Wrapping up the presentation, the Q&A session brought about some key points:

• Technology is pushing companies to find competitive edge
• Processes do not necessarily change too much, but people do, most basic thing you can do is continually educate people (like attending IBF events like this)
• First you need to get the basics of S&OP then the enhancements will come, first need to balance demand and supply
• Takes just an average of one and a half hours of executives time each month to be involved

The afternoon forum was a real eye opener and sure got my attention. Especially in the difficult economic times that we are still in, it almost sounds like achieving successful S&OP can be a bit of Disney Magic when it comes to your bottom line.  The lineup of upcoming presentations over the next two days will help showcase case studies and insights on how to demystify some of this and take it back to our companies.

Maria Simos CEO e-forecasting.com

When the Institute of Business Forecasting & Planning (IBF) was formed, I was still in diapers. Around the same time that Dr. Jain had the novel idea of bringing business practitioners together to learn and grow together I was only crawling over my father’s journal article notes. I didn’t know it at the time, but early in the lifespan of the IBF my father, Dr. Evangelos Simos, was already in the midst of what has become a long and fruitful relationship between him and the organization. After attending his first IBF conference he was hooked, and has since worked to help solidify this professional group by providing advice and contributing an international outlook piece for the Journal of Business Forecasting (JBF). Now 30 years later I couldn’t help but smile when I opened my mail to find that same JBF I have known my whole life with all of its outstanding articles only it had a wonderful sleek new look.

Today the IBF is as strong as ever and I now work alongside my father doing economic research and consulting for our company e-forecasting.com. We work closely with the IBF regarding the organization as an important ally in the field of business forecasting and a real educational pioneer.  With our company, I do my best to follow the lead of the IBF in their cutting edge use of social media constantly staying ahead of the crowd when it comes to embracing new technologies. Over the last two years I’ve watched the LinkedIn groups, Facebook fan page and Twitter page help snowball their popularity and reach of the IBF, helping to build what is now a global brand.

It’s great to see that along with this digital adoption of social media, the IBF is not neglecting good old print.  This summer, the beloved JBF definitely received an ultimate makeover.

The new JBF continues to bring you the latest in research and trends as it always has. With each issue it brings in new case studies and methods from a variety of contributors from the business and academic side of the field. There are also ongoing contributions sprinkled in as well. My father’s piece on the global economic outlook made the cut and is still there.

Additionally, in what I call a “what-a-small world” coincidence,  Dr. Larry Lapide, who I was classmates with his daughter at Carnegie Mellon, also writes a recurring article for the journal. In the latest issue of the JBF Dr. Lapide, an affiliate at MIT and a professor at UMASS-Boston, shares a bit of research on predictive metrics which one of his MIT grad students completed.

What else can you find in the revamped JBF? The lead article, authored by Dr. Jain and Mark Covas gives us Six Rules for Effective Demand Planning in a Volatile Economy. That should come in pretty handy, especially if we see a double dip. Steve Keifer, VP of GXS, champions the use of some forward-looking demand signals, rather than hailing POS data as the all-mighty. Rounding out the JBF Summer 2010 issue, Sara Brumbaugh, the founder of Ceres Analytics, gives a very in depth view on how to use marketing data to strengthen forecasts. It is a must read. The final piece, by Jack Malehorn takes a look at the domestic economic outlook, sharing forecast figures from top US economists on GDP, inflation and other key macroeconomic variables which are key forecast drivers.

It sounds pretty much like the same solid publication you’ve seen all these years, right? Well where the cutting edge educational content is concerned it is, and then it isn’t. It’s actually pretty. Smart and pretty, a killer combo. The new design and color layout help make the journal a bit livelier and easier to read. Even I can admit that reading through concepts like regression analysis, MAPE and inventory levels can be dry at times. My favorite update is the expanded Executive Summary at the beginning of each major article. It gives a nice high-level view of what’s in store so you can bookmark the article for later. There’s also info on upcoming events and online training with reminders to stay connected with social media and get involved.

IBF continues to be a leader. Not just in demand planning and forecasting, but as seen with the updated JBF and social media efforts, it is now serving as a true role model for organizations that strive to adapt and stay relevant. I look forward to continuing watching the IBF grow and help me grow professionally as well. What will the next 30 years of IBF look like? I can’t wait to find out.

Maria E Simos
CEO
e-forecasting.com

View A Preview of the JBF With It’s New Face Lift

Maria Simos CEO e-forecasting.com

A big treat in attending a conference is not only learning from attendees, but also having the benefit of one-stop shopping when it comes to vendors in the exhibit hall.  These vendors travel across the country, often times lugging huge displays, screens, white papers and swag to meet with current and potential clients and share with them what their software can do to help assist in their planning needs.

What better way to make this trip even more worthwhile than to share some top trends and news from the companies that have made the trek to exhibit this week at the IBF Best Practices Conference?

Top tier sponsors of the show JDA is coming in with major company news.  They are now the largest single company for supply chain planning and optimizations thanks to their recent acquisitions of competing firms Manugistics and i2 as recently as January.  With this synergy, the company now has over 6,000 companies across different industry segments using their software.  Danny Halim, VP of Industry Strategy and Calvin (Cal) Otto, Business Development Manager shared that what makes JDA truly unique is the company’s intimate knowledge  across the entire supply chain. This includes everything from raw materials to the retail space with the consumer experience.  Their company recently announced record first quarter profits, making Q1 the 22nd consecutive profitable quarter for the firm.  A major trend they see is the idea of supply chains competing versus one another rather than individual companies doing so with a convergence of the supply chain.

Smart Software and their Director of Sales Gregory Hartunian shared some impressive news that they have received not their first, but their second National Science Foundation Research Grant (NSF).  Ten years ago they were awarded their first Small Business Innovation Research Grant from NSF to develop a technology called the Smart-Willemain method of forecasting intermittent demand, also known as slow moving demand.  With their second NSF grant, Smart Software will further expand upon the Smart-Willemain method.  With this research completed, they will be the only vendor to offer a ‘next generation’ forecasting solution for slow moving capital goods, like service and spare parts.  Companies use this technology for a variety of applications, Kimberly Clark is using this to track in-house inventory as an example.

Tom Reilly from Autobox shared news of a new joint project with HP which was presented in more detail  Friday.  For this project, they were approached by a Principal Scientist of HP to work and develop a semi-hourly forecast model.  By breaking the day into 48 discrete time periods they are able to better determine precise demand at specific times throughout the day.  This methodology has been used for the last three to four months with application in call centers.  This method also easily translates using a mixed frequency modeling approach for making power estimations for power plants.

Forecast PRO’s Trac has a neat feature which shows how well the model fits with the history.  Bob Leonard gave a brief demonstration showing the archived forecasts over time.  Using this rich forecast archive helps track the accuracy of lead times.  Their software is off-the-shelf and a 5 user system can be implemented for $15-22K.

Boardwalktech Inc will be launching the 3.2 version of their software this June.  The company’s collaborative platform supports concurrent multi-users  down to the cell level using a back end system.  The software is easy to use and can be role based.  The real-time server recognizes who made the last change and makes notations.  Benefits of this system include integration that takes place in weeks not months, it extends the collaboration process, reflects a complete picture of the business and provides greater visibility.

SAS is excited to announce a new forecasting server plug in for SAP.  The plug in, called SAP Advanced Planning and Optimization (APO) links to read and write from live cache.  In other company news, IBF long standing member Mike Gilliland’s intramural basketball team has won the SAS intramural championships the last 2 out of 3 years.  (It’s not always about the forecasts, demand planners also need to have some fun, too.)

John Galt Solutions Inc. has an Atlas Planning Suite which focuses on the consumer-driven supply chain.  The suite allows for use of POS data to help assist in reaching higher levels of forecast accuracy and has over 30 models built in for planning new product launches and promotional events.  Using POS data and forecasting new product supply are also topics that were touched upon during the speed dating session.

Logility has a supply chain management solution called Logility Voyager Solutions which is internet-based.  Given the global nature of their client’s businesses, they have built in multinational support.  The costs and prices are given not only in the currency of the items ‘home market’ but also in local and regional currencies.  With this built into the system, it helps users build rollups to greater levels of detail for their inventory, production and transportation plans worldwide.

RockySoft Corporation has the Inventory Management Suite with Demand Manager and Requirements Planner, aiding clients in reducing inventory.  The suite also includes S&OP and Economic Order Manager (EOM).  With these tools, clients are able to work with the full supply chain to determine forecasts, procurement needs and replenishment quantities. Using this software also allows practitioners to take advantage of price breaks and volume discounts and also use the suite as a support tool to make decisions on a management level for inventory valuation and performance monitoring.   One key feature with the EOM tool is that you can easily compare annual costs of inventory with the annual cost of ordering based on varying volumes.  The suite is easy to use and training on the new system can be done in only four hours.  RockySoft’s applications are comprehensive but not complex.

Another vendor is working to optimize the time it takes to make demand forecasts.  OM Partners USA has  Abhi Patel at the show sharing information on their supply chain planning software.  Their core strength comes with the ability to integrate the forecast with S&OP planning and scheduling.  The company has a variety of suites that peel time down from a 4-week to possibly one or two week cycle.

A lot was learned by walking around and visiting with the vendors during the Best Practices Conference.  At times, and I know this because I have exhibited at a fair number of shows myself, attendees are not necessarily jumping at the chance to come talk to vendors.  Being on the other-other side of things this time around working as an ambassador and live-tweeting and blogging about the event though, I found that the folks exhibiting at the show were just truly excited about the new things their companies are doing.  So many new applications are being developed in this space and it is a real energizing time in the field.  So next time you are at a show, take some time to hear what’s new in the industry.  Visit with the vendors and simply ask, ‘what’s new?’  It just may be the best way to see what’s next.

Maria E. Simos is CEO of e-forecasting.com, an economic research and consulting company based in Durham, NH with clients ranging from media, academics, federal banks, major manufacturers to other consulting firms.  In her role, Ms. Simos works to further develop the reach of e-forecasting’s economic data and reporting capabilities. She also works closely with clients to ensure that they are receiving the important forecasts, economic data and support needed to be successful. She promotes the work of e-forecasting.com and provides economic analysis through her twitter account (@mesimos) and via other social media outlets.  Ms. Simos holds a Master’s Degree in Management from Carnegie Mellon University where she focused her research on management and network analysis. Her research explored social and business networks and their tie in to culture in organizations.  Her undergraduate study was completed at the Tepper School of Business at Carnegie Mellon.

Maria Simos CEO e-forecasting.com

When you come to a conference, all you want is to talk to as many people as you can so you can learn what everyone else is doing and learn from them.  Speaking with one attendee, they shared how in their group, there is only four demand planners, spread across the globe.  The benefit of attending events like the IBF Best Practices Conference is that you are now in a room with hundreds in the same position.  But still, how to talk to as many as possible?  How about some speed dating!  So that’s what about 100 or so attendees chose to do with the late afternoon session at the conference.  We were broken up into several different groups each with a different topic to discuss. We worked our way around the room a few times so that we would have a chance to discuss the topics we were most interested in. Each topic was led by table monitors.  With so many great topics to choose from, it was a hard decision, but  I chose to head  over to the JDA led table first and listened in on the discussion about “Improving forecasting and planning with consumption (POS) and syndicated data” led by Danny Halim.

The group quickly began sharing how they are all ‘trying’ to use consumption data in their demand forecast.  Digging deeper into the reason for the repeated use of the word “trying”, several issues came up regarding the reliability of  POS data.  Several fellow date-ees shared their systems for cleaning the data, or merging several different sources to make it more comprehensive.   Some companies manually merge them together, while others have built complex systems to forecast inventory levels based on POS data provided by major retailers such as Walmart. It is essential to find a system that works to clean the bad data in order to make it usable. The phrase ‘garbage in, garbage out’ was used frequently although I would say these daters were real pros at sharing and I found myself  not  wanting to get up and move on to another table as the discussion was really exciting.  I hope to see some break-out sessions on this topic at future IBF events.

I headed over to the next table where the topic was “what forecasting system works best for you”?  All daters were sharing at first was whether  their organization goes top bottom or bottom up.  Not to be left out, there were also a few working from the middle out.  The demand forecasting world does not discriminate and accepts all creeds! Two daters shared that their group does both (bottom up and top bottom) and then reconcile the forecasts.  Another shared how they begin with a price line item forecast then dollarize it by working with the marketing team and use this to drive the financial forecast.  To do this, they create assumptions upfront on the industry, start with a baseline and use this target for demand planning functions.  Not everyone  shared happy stories of their forecasting process.  One person explained that their sales department does not participate in providing input into the forecast, event though they are the closest to the demand and the customers..  The ideas presented in the Keynote Presentation by Gerry Fay of Avnet EM Velocity came up as ways to combat some of the issues the table faced. Some of these were demand sensing and responding, and command and control.  A few other different approaches presented were forecasting at the SKU level then weighting forecasts by different group functions at certain levels depending on the timing, conflicts with upper management when they do not see what they want in the forecast, forecast ownership and having the sales team provide forecast as a change in trend, rather than level.  Again, when table switching was called for, it was hard to leave but by this point everyone was so warmed up to sharing I looked forward to seeing how the last table would go.

Our last group date was led by Mike Gilliand of SAS and we talked about “new product forecasting”.  Around the table the range of new products spanned  from 5-40%.  Forecasting by analogy is the method most commonly used for new product forecasting.  The focus on the higher levels of uncertainty and risk were brought up, and the strong need to make sure management realizes this as new products roll out.  Also, the importance of tracking past new product forecast reports was part of the discussion as well.  Is your sales team consistently over-shooting? Keep this in mind.  One major takeaway was to make sure and track what assumptions were used when you are making the forecast.  If you carefully track these, it will assist in making the forecast better and help the team in the long run.  The general consensus of the table was that it takes roughly six months, for the most part, to know if a new product is going to succeed before entering it into the standard S&OP process for the organization.

And with that, speed dating was done and all minds were racing.  The level of sharing within the group continued to grow and we all moseyed over to the cocktail reception where the speed dating conversations continued and mini-crab cakes, succulent ripe California strawberries and JDA signature martinis were our award for being such great daters and sharers of demand planning lessons.

Maria E. Simos is CEO of e-forecasting.com, an economic research and consulting company based in Durham, NH with clients ranging from media, academics, federal banks, major manufacturers to other consulting firms.  In her role, Ms. Simos works to further develop the reach of e-forecasting’s economic data and reporting capabilities. She also works closely with clients to ensure that they are receiving the important forecasts, economic data and support needed to be successful. She promotes the work of e-forecasting.com and provides economic analysis through her twitter account (@mesimos) and via other social media outlets.  Ms. Simos holds a Master’s Degree in Management from Carnegie Mellon University where she focused her research on management and network analysis. Her research explored social and business networks and their tie in to culture in organizations.  Her undergraduate study was completed at the Tepper School of Business at Carnegie Mellon.

Maria Simos CEO e-forecasting.com

Wednesday afternoon kicked off this year’s Institute of Business Forecasting & Planning’s Best Practices Conference with a near-standing room only pre-conference Demand Management Forum.  The Forum was led by Mike Gilliand from SAS and a panel of experts who brought the group through three topics: (1) Applying demand management sensing, shaping and creating, (2) What management must know and (3) Worst practices in business forecasting.  The forum touched on many key issues faced by demand planning and forecasting professionals, giving the group a taste of what’s to come over the next two days.

What makes this group so unique is that they are all demand planners. While they hail from different organizations they share in this specific role and are all part of a community dedicated to sharing and helping each other learn new techniques and working through challenges together.  The last session, which was cheekily dubbed ‘a confessional’, had the panel and audience sharing stories of what didn’t work.  Try to imagine a room of over 75 people openly sharing mistakes and what was a disaster in their organization. For me this was such a refreshing experience seeing heads nod throughout the room as each participant spoke of their woes and a fury of note taking as a panelist or fellow forum attendee would provide some solutions or ideas for how to alleviate the issue.

Panelist Jonathon Karelse from Yokohama Tire shared a worst practices experience and led the group through his folly of using a collaborative forecasting system for tire demand that did not work.  While this was a method he learned at a previous IBF event, it happened to be ill-executed at Yokohama and led to excess inventory because of the bull-whip effect and beer games.  One might ask “What do beer and whips have to do with forecasting tire demand?” Jonathon explained the bull-whip effect that as the velocity of the end of the whip gets so high that once it hits its target and ‘snaps’ what you are hearing is the end actually breaking the sound barrier. He used this analogy to explain what happened to the errors in supply chain. The Beer Games reference eluded to an MIT experiment which showed that a lack of trust within an organization can cause too much inventory.  The Lessons learned were that removing the effect can be done by getting closer to each piece of the supply chain (and Jonathon still has a job so it must be true).

A few other ideas that came up during discussions:

• Arbitrary forecast error targets – Why does your company shoot for 5%? Is that realistic? Perhaps a more sound approach would be to work towards continuous improvement and aiming to beat the standard forecast model.
• Location-product combination – Working to prioritize this combination is important.  A 10% error in one location may not have the same impact and financial loss as the same error  would cause in another location.
• Excess of meetings – Having too many meetings and reports takes too much time away from actually analyzing your forecast.  Is your organization over-doing it by having the demand planner’s time split into too many directions?
• Backing into a number – Just don’t do it, whatever you do. This will come back to haunt you.

Today many of the panelists along with other demand planners attending the conference will give presentations that will go  more in depth into challenges and solutions faced by those in the role of  demand planner.  Is it all for not? Anish Jain shared with the group some statistics found in collected data the IBF has accumulated over the years which shows that forecast accuracy has increased while inventory levels have remained the same.  What does this mean? Are the forecasts being taken seriously?  I imagine this is a topic that will be talked about more throughout the conference.

Maria E. Simos is CEO of e-forecasting.com, an economic research and consulting company based in Durham, NH with clients ranging from media, academics, federal banks, major manufacturers to other consulting firms.  In her role, Ms. Simos works to further develop the reach of e-forecasting’s economic data and reporting capabilities. She also works closely with clients to ensure that they are receiving the important forecasts, economic data and support needed to be successful. She promotes the work of e-forecasting.com and provides economic analysis through her twitter account (@mesimos) and via other social media outlets.  Ms. Simos holds a Master’s Degree in Management from Carnegie Mellon University where she focused her research on management and network analysis. Her research explored social and business networks and their tie in to culture in organizations.  Her undergraduate study was completed at the Tepper School of Business at Carnegie Mellon.