The Journey
Parts of their journey included the need to integrate the various demand signals and begin to synthesize the data. As the product lines grew so did need for product segmentation. As we think about increasing complexity, we should begin to align with the value of segmentation activities. Segmentation strategies allow us to group products based upon a combination of particular attributes. Unlike product groups, which are a static division of products, product segmentation enables you to work with dynamic attributes. As we understand the dynamics of the products we are more likely to understand variability and its root cause. Segmentation can also assist in creating exception based approaches. In my prior experiences I have dealt with greater than 64 million store/sku combinations, clearly a call for exception based management! Segmentation can be a “heavy lifting” exercise but the benefits generally outweigh the effort.

People & Structure
Rick also discussed the integration of people and structure. Critical to the success of the journey is the development of the structure as well as the people involved in the decision making process. In his organization, Demand Planners were expected to be the demand experts. In an effort to build and foster this education, all of the demand planners will complete IBF training and certification in 2013. Credibility and step change management were highlighted as contributors to success. Of course, the integration of people and process also requires a degree of change management. And the speed to which change management occurs depends upon several factors, including; the size of the organization, the legacy of the structure and the extent of involvement at the executive level.

Your comments, thoughts, and experiences based on the above are welcome.

Joy White
Vice President, Inventory
OfficeMax

Volume 32 Issue 2
Summer 2013

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FEATURED ARTICLES:

“Lean Forecasting: A Competitive Edge”
By John Gallucci

In these highly competitive markets, it is more important than ever to improve efficiency and shrink waste to survive and grow. One important area where waste can be reduced is forecasting, a practice the author calls “Lean Forecasting.” This article describes in detail the wastes that exist in the consensus demand planning process, and suggests tools and ways to get rid of them.

“Leveraging Exceptions and KPIs to Improve the Demand Forecast”
By Alan L. Milliken

Because of rapidly changing market dynamics, exceptions are now part of doing business. To survive and grow in this market, it is important to leverage exceptions; this article outlines a strategy to leverage them. To do that, the author suggests first preparing exception reports by ABC classification, at an account level, by items and category, based on statistical forecasts as well as ones that include overrides by Marketing and Sales, and then taking corrective actions. He discusses in detail which action will be appropriate under what circumstances.

“Is ‘Big Data’ Just More Data?”
By Larry Lapide

This column deals with “Big Data,” one of the latest technology trends being hyped. It discusses what managers need to consider when evaluating whether or not to implement it at their companies. A brief synopsis of a new book introducing the concept of signals versus noise is given, as well as some of the lessons learned from efforts in downstream data—a long-standing “Big Data” industry initiative. The column recommends identifying a few key predictable signals from Big Data to focus on during implementation, and considering the rest of the data to be noise that adds no useful information towards improving decision making.

‘Sales & Operations Planning: Where Is It Going?”
By Tom Wallace

In this highly competitive environment, it is more important than ever to manage businesses efficiently and effectively. S&OP is the process that does just that. The author explains in detail why such a process is needed, and what the future holds. The author also clears up a number of misconceptions about the process including S&OP in real time, when to use Global S&OP, and the role of weekly S&OP. In addition, he covers the powerful impact that S&OP can have when used to support strategy.

“Using Big Data to Enhance Demand-Driven Forecasting and Planning”
By Charles W. Chase, Jr.

Big data is a popular term used to describe the exponential growth, availability, and use of information, both structured and unstructured. Much has been written on the big data trend and how it can serve as the basis for innovation, differentiation, and growth. Companies using real information to sense demand signals and respond quickly to changes in demand can confidently cut inventory, reduce working capital requirements, and free up cash.

“The U.S. Economy…A Glimmer of Hope”
By Jack Malehorn 

“Weak Global Recovery with Changing Uneven Growth Patterns”
By Evangelos Otto Simos

“Answers to Your Forecasting Questions”
By Chaman L. Jain

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The Journal of Business Forecasting (JBF) has been providing demand planning, forecasting, supply chain, and S&OP practitioners with jargon-free articles on how to improve the value of their roles and company performance from improved forecasting and planning for over 30 years. A subscription to the JBF comes with IBF membership at no additional cost.

Fred Harried

Rakesh Sharma

“We will what?” I had heard it. We will be doubling shipments in the next 4 months, and this was just the beginning. I cannot say I wasn’t excited. It felt good. Volumes going up.. Its a good problem to have.

But the memories of demand sliding unexpectedly were etched clearly in my mind.. Customers pulling off orders and the “so called” demand going.. kaput.. And we were left holding the bag of tons of inventory.. Clearly, we couldn’t afford that.. I mean that would be catastrophic for a small company like us.

I remember Rakesh and I chatting about the general landscape of Operations over a sandwich. Can we change the world of Ops? Is it possible that a small company like Ruckus Wireless could take on its bigger rivals, with much lesser resources and buying power? Could we create the right set of processes, and equip the Ops team with the right set of tools (without breaking the bank)? Processes and tools that could help us walk this tight-rope, prepare forecasts and “truly” understand the “demand” behind it?  And if we could not understand demand, just make sure we arm the team with the right information and insights so we can succeed most of the time?  And get our customers to embrace and cheer for us during worst case scenarios?

At IBF’s San Francisco conference this month, we look forward to sharing our journey with you.  This includes how we went on to build an Operations model and processes that is purpose-built to respond to customer demand and changes, while keeping a tight lid on costs. It will be wonderful if you join us.

If you have any thoughts, questions we would love to hear from you. Please drop us a comment.

Fred Harried, Vice President, Operations
Ruckus Wireless

Rakesh Sharma, President
Zyom, Inc.

See FRED HARRIED from RUCKUS WIRELESS & RAKESH SHARMA from ZYOM Speak in San Francisco at IBF’s:

$895 USD for Conference Only!

April 28-30, 2010 (3 Days)
San Francisco, California USA