Comments on: Is Communication More Important than Accuracy in Demand Planning?

By: Faimid

Faimid — Thu, 25 Aug 2016 08:13:19 +0000

Dear John

Very good article …….agree with you that effective communication in demand planning is a key to higher forecast accuracy and over all achievement.
It brings visibility to what went wrong in past but also aims in capturing future risk.
Regards
Faimid

By: Stuart Rosenberg

Stuart Rosenberg — Tue, 09 Aug 2016 14:19:39 +0000

Important article. Yes, communication is a key to excellent Demand Planning. Once organizations have worked together to develop a consensus forecast through a S&OP process, other members of the supply chain should have input and agree to the consensus forecast or CPFR (Collaborative Planning, Forecasting and Replenishment). CPFR makes use of an agreed upon forecast throughout the supply chain. If, areas in the supply chain can not meet the expectations of the plan/forecast, then solutions should be provided through combined efforts.

By: Carolyn

Carolyn — Sun, 07 Aug 2016 21:40:50 +0000

Thanks, John for this important observation. From my experience, they are equally important but also intertwined–i.e. better communication causes better accuracy. In each of my positions, I’ve done training for the users of the forecast so they know it’s not a black box and gain an understanding of the process and particulars of what goes into the forecast which in turn breeds trust and cooperation and better accuracy. I let them know how important their input is in achieving the forecasting accuracy objectives and how much I value the learning I gain from them.

By: Meka

Meka — Fri, 05 Aug 2016 14:28:25 +0000

Awesome & I try my best to be in Orlando .

By: Keith Diehl

Keith Diehl — Thu, 04 Aug 2016 20:14:58 +0000

John,
Great article! It gets to the heart of the DP role in supply chain planning. Thanks for sharing. I’ve had this debate in my organizations and I typically land on a less communication/more-better process solution. I would appreciate your thoughts on whether the added communication/effort was bypassing potential improvements in other areas. In example, in your “We had to order materials for an upcoming production run of an item that was recently launched” win:
o Why wasn’t the lower velocity part of the demand in the forecast? Should the supply chain execute to the lower velocities if the business didn’t yet believe in it? Should the demand signal be updated more frequently?
o Why would the production run start before it was truly needed to safely fulfill demand? Should production plan timing be optimized by forecast variability or product lifecycle?
o What would have happened if velocities increased?
o Is the best case communication scenario that Production would ask DP to assess demand variability relative to each production schedule? Wouldn’t most be appropriate making the discussion inefficient?

I hope to be in Orlando and will definitely make a point to attend your session! Thanks!

Best,
Keith

By: John Von Achen

John Von Achen — Thu, 04 Aug 2016 18:31:36 +0000

Great article John. I’ll be keeping a hard copy nearby as I develop a new team. I appreciate the discussion of demand planner communication with towards the supply side with the supply planners and the rest of operations. Clearly an important element. But I would love hear more discussion about communication aimed at the demand with sales, marketing and even the customers. I’m going to bring back a term which seems to have dropped out of favor, CPFR. Creating a forecast is only half way to getting it right, the next half is executing and getting the orders that were forecasted in the first place.