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

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.