So you’ve got a long list of possible options for when you decide to upgrade or replace your demand planning software. In the previous articles we looked at the functional and service, technical, and implementation requirements of your new software. We have carefully calculated what we believe we can see as benefits and improvements, and created our budget to look for an 18 month return on our investment.  Now it is time to find that perfect match and seal the deal.

Unfortunately, there is no perfect dating app for this and no opportunity for you to simply put in what you like and when you and the solution provider both find a connection, you both swipe right.

From here, the next step is to begin conversations with the various vendors that meet your needs.  A great place to start – outside of some simple internet searches – is by attending an IBF conference.  Many of the top solution providers are available with booths to allow you to find all of the vendors under one roof or exhibition hall. This provides the opportunity to ask questions and even the opportunity for demos to see the functionality they offer.

For some, this is where things get even more confusing. How do you narrow down the list, scheduling demos and ensuring the right content is covered?  Are you missing anything? Are you asking the right questions? If what you need is not overly complicated, many people can sort through the next steps of the process to a final selection. If done right, you’ll have all the necessary information to make an informed choice and get the solution you need.

But there is another potential option that may help save time and money…

Should I Use a Third Party Company?

Many companies believe that going it alone or directly to a software manufacturer to obtain new forecasting or demand planning solutions is the best way to get exactly what they are looking for. For many companies this will work and there are good solution providers that will help you get what you need. Unfortunately, the reality is that no matter how good you or the software provider is, there is still bias and you have no way of knowing if the software gives you exactly what you need unless you have used it before. What’s more, you may not be completely confident you know what you need and want an independent, second opinion before you commit a big chunk of your department’s budget.

Rather than relying on the biased opinion of a specific software developer, it may be best to involve a third-party, such as a software consulting company

Rather than relying on the biased opinion of a specific software developer, it may be best to involve a third-party, such as a software consulting company. These businesses exist with the sole purpose of helping companies sort through their specific needs and budget, and navigate all available software options to find the best solution. They can also provide you with an in-depth analysis of the pros and cons of each of your options, along with an estimate of the likelihood of a specific software platform to stay at the “top of the heap” based on current software trends.

Beware The Limitations Of Consultants

Consultants are not all-knowing though. You still need to do your own homework and due diligence.  Just because you pay someone $200 an hour does not mean they know everything. Many naively assume all consultants are geniuses and later find out they are far from it. It is vital you still understand your own needs and requirements, budget, estimated benefits and stay heavily engaged. No matter how much analysis consultants do, they will never know the business details and issues as well as your employees. When the project team is not fully engaged and not adequately trained on the software, even the best of systems will give you problems from the outset.

There are many things good third-party consultants can do for you. Because a software consulting company needs to know the ins-and-outs of the industry, they will be able to help you assess your needs and requirements too. Many consultants can facilitate process mapping exercises and drill down to better understand current and recommended future processes.

A software consulting company also has the ability to help you obtain a fair contract

Although no third-party company can guarantee you the best rate or a glitch free roll out, they can help you avoid the potentially serious issues that companies face when they decide to implement a new software package. In addition to helping you locate the right software, a software consulting company also has the ability to help you obtain a fair contract. They will have the necessary industry experience to know which contract terms to insist upon and which ones to avoid.

How Much To Pay A Consultant

All of this will come with a price tag. Many factors contribute to the total third-party consultant cost. The greatest aspect is time investment. Generally, you are looking at anywhere from $150 to $225 an hour plus travel costs but some do charge project flat rates as well which is highly dependent on scope and everything they will be doing. The time or scope can be as basic as the software selection to full service project management, so it is difficult to put a number on it.

Let us be clear though, hiring a consultant can be expensive. At the same time, with the many software vendors to choose from and potential pitfalls of the selection process, a good consultant can pay for themselves in project or contract savings alone. Additionally, if you are unable to do the implementation with your internal resources, the benefits of having an implementation consultant can be huge and ensure you launch your system as effectively as possible.

Is it expensive? Yes. Is it worth it to have the job done right? Absolutely!

A third-party company to help you identify your needs and negotiate the path of implementation of a new demand planning and forecasting system plays a huge role. Is it expensive? Yes. Is it wort it to have the job done right? Absolutely!

Remember though, third party consultants will not make us successful. Consultants can educate, suggest, coach, and help choose the right software but cannot make your company forecast better than the people and processes are capable of. It is important you focus first and foremost on the right talent, culture, processes and best practices that allow you to get the most out of the technology.

I and other S&OP leaders will be discussing this topic and more at IBF’s Leadership Forum in Orlando on October 17, 2018.  Designed for leaders in planning, forecasting and S&OP, it’s the best of its kind, and is designed to help managers with implementation and management of people, process and technology. It’s a great event – you can see the schedule here.

Despite the importance of forecasting, demand planning software continues to be misunderstood by many businesses. Industry research has revealed many of us are left unsatisfied with our software, even though demand planning tools can bring major improvements in business performance.

Unfortunately, many companies continue to labor under the illusion that an ‘almost’ match is a good enough option. They either fixate on the most expensive products that has all the bells and whistles or they over simplify and assume any product will provide a decent forecast. The real focus should be on tracking demand streams and processes and finding the right technology that provides the right kind of support for the right operations.

Knowledge is power when it comes to choosing software solutions. Therefore, it’s a good idea to do your own research and read up on the most popular providers. It is also important to do your due diligence and come prepared with what exactly you need and understand the process and how it should work for you. To help with this, over the next few blogs I will provide insights and the key points to help you identify the kind of demand planning and forecasting system you need.

What Do I Need The Software To Do?

This depends. I know it sounds like a cop-out but it would be truly irresponsible for me to tell you this software will fit your needs without knowing exactly what your needs, maturity, budget, value chains, resources, data etc.  look like. To this point, it is also irresponsible for any vendor to sell you anything without understanding your process and business. If they tell you a particular product is perfect for your needs, be very wary. And contrary to popular belief, it is not good enough if a system provides 80% of what you require. You do not need to settle -there are enough options out there for you to get what you need.

The first step any company should take when looking for a new demand planning software is determining your process, technical and system needs; your budget and other constraints; and a detailed list of requirements. Most systems will have the usual industry standard time series forecasting algorithms but maybe you also need some of the more advanced tools on the market. These include advanced analytics like machine learning, AI, Monte-Carlo simulation and Stochastic Optimization.  

Going through the design process first gives you a systematic way to work from abstract concepts down to specific technical details and physical designs for the solution i.e. you start with the benefit you want yo gain from the system and work backwards until you get down to specific features. 

Map Out Your Demand Streams In A Specification Document

To ensure that you select the right technology for your operation, it is critical to map the demand streams and the demand drivers. Consider a process map that helps visualize each steps including input and output, as well as the technology or information you already rely on that will need to be integrated. Techniques like causality, seasonality, top-down and bottom-up forecasting, and forecast-value add analysis are essential to the selection of the technology because whatever system you choose must support them.

Think about your customers.  No not necessarily the end users of the company product but the intermittent internal users of your forecasting and demand plans. This can be operations, supply planning, finance etc. Each internal customer may look at your forecast at different levels of aggregation and different time horizons and may need different levels of forecast accuracy.  

From here it becomes easier to develop a detailed functional specification document that provides direction and guidance for what you need and the must haves for when you start comparing solutions. In this document, simply list out what you require. Remember to include the models you use, data and input requirements, and process steps it needs to support, and the metrics and information you need out of it. Address collaboration and process, functionality, as well as technical requirements. Your company’s list may be 10 items or 50 items long. Take your time and include the must haves and the like to haves.

 Features Checklist

Typical requirements may include, but not limited to, the follow:

• Full spectrum of statistical forecasting methods. Demand plans may use more advanced methods and a holistic approach to statistical forecasting (e.g. ARIMAX, econometric, cluster analysis etc.)
• Forecast generation using dynamic multiple hierarchies and complex event or pricing models and use of what-if scenarios
• Overrides performed at varying levels by different users, with hierarchy reconciliation 
• Manages demand planning consensus work flow
• Measurement of demand forecast error with limited accountability or understanding of causes (e.g. MAE, MAPE, WMAPE, Bias)
• Performance measurements to gauge the value of the demand planning forecasting process instead of just the output (e.g. FVA, tracking signals)
• Segmented and graphical results based on differentiating lags, hierarchy, segments, and inputs or process steps.  
• Ability to utilize POS and external data signals
• Ease of integration and reliability, and high degree of support available
• Languages/global presence and support
• Supports multiple calendars (production, fiscal etc)

Avoid a costly mistake by making sure any software you buy meets all of your specific requirements, and ensure it can integrate with existing tools and processes.

Staff Checklist: The People You Need To Run This Software

Another critical question in preparation needs to be do I have the right staff in place both from a planning and technical perspective to get the most out of this application?  This part is really critical to the success of planning to prepare to look for a tool.

Typical internal resources may include:

• Project Sponsor/manager (40% – 70% FTE).  Provides executive oversight and guidance. Works with software provider to develop project plan and manage day-to-day priorities. Reviews deliverables for quality and completeness.
• Functional core team members (15% – 45% FTE each): Represent end user and voice of customer, validate business requirements, define user workflows, validate functionality, provide testing.
• Technical core team members (5 – 15 days IT resources): Develop automated programs to extract and import data, act as SME as required in support of core team.
• Functional end-users (3 – 10 days per member): functional end user testing and training.

Note that we have highlighted demand planning and forecasting software only. For an Advanced Planning System that does forecasting as well as supply planning or inventory optimization, you will need to look at other options that have more features. With demand planning being more than just a supply chain process, and with advancements in technology and integration, do not assume it must be part of a supply chain or ERP system to get what you need. You no longer need a single solution and may be able to meet your organization’s needs with a standalone forecasting system. Predictive analytics and forecasting once again offer benefits as a separate system as long as you know what you need and understand how it will benefit your company.

Which brings us to the next question of what kind of return on investment (ROI) can I expect and how much will all this cost me? Subscribe to our newsletter or check back soon to see how I will answer this question.

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.