Tag Archive: client

Is Demand Planning/ Sales Forecasting Hype or Valuable?

September 9th, 2019

According to Gartner statistics,significant bottom line results can occur with just a 1% improvement in forecast accuracy. In fact, there are staggering improvements in lead time, inventory reduction and margins, so why not at least explore the idea? There are lots of worries expressed by clients and contacts:

  • We cannot predict what our customers will order!
  • Customers don’t even know what they will order! (And, in seeing these ordering patterns, I concur that this is often-times an accurate statement.)
  • Since we are using lean, our lean consultant told us we no longer need forecasts.
  • We are a small company and don’t have resources to focus on forecasting
  • And my favorite, “Why in the world would our significant sales team listen to you?”

I just have one question, if depending on the industry and study, a 1% improvement can lead to a 2.7% to 7% improvement in cash flow and minimally a few percentage points cost improvement in key categories such as freight, wouldn’t you be remiss if you didn’t consider your forecasting process? Of course you would be!

We have yet to run across a client that couldn’t improve the forecast, no matter how daunting the task seemed. Since the outcomes are substantial, it was worth the effort.  And, the effort was typically minimal compared to aligning the people on the forecast.

A few tricks of the trade in driving results with forecasting:

  1. Let your tool (whether Excel or a sophisticated system) do the work for you – From an 80/20 standpoint, there is no doubt that a simple tool will perform far better than even your best person. Develop your base.
  2. Focus on exceptions – On the other hand, your team is best equipped to provide insights and feedback on exceptions. Use their strengths.
  3. Drive results, not blame – Remember, the definition of a forecast is that it will be inaccurate. I’ve yet to run into a client with a perfect forecast. With that said, the three most impressive were across the board – a $100 million dollar facility of a multi-billion dollar aerospace organization with a manually generated forecast, a close to billion dollar consumer products company with a home grown system and smart people, and a rapidly growing <$10 million dollar manufacturer with an Excel-based system with smart, agile and process-oriented people. None of these folks ran around blaming anyone with forecast inaccuracy yet they all outperformed their competitors.

Perhaps it’s time to take a second look at your sales forecasting process. Who is responsible? How does it work? You never know what you’ll discover as you shine a flashlight on the process. If you’d like to discuss forecasting and demand planning further, contact us.

Did you like this article?  Continue reading on this topic:
The UGG Founder, the Amazon Effect in Healthcare and Why Demand is Key
Have you Thought about Increasing Demand??
The Strongest Link in Your Supply Chain
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How to Keep Your Team Engaged

August 31st, 2019
Every client is concerned about how to engage the team. Some executives are thinking about how to ‘keep good people’, others are thinking about how to enable ‘smart people to share what they know’, and still others know they need engagement to ensure customers are happy and bottom line business results occur.
According to Gallup, there is some positive news in that engagement is on the rise and is at an all-time high of 34%. With that said, there is such a long way to go to fully leverage already existing assets – our people! Time and again, the most successful companies actively engage employees in their work. The actively disengaged is down to 13% while ‘not engaged’ is 53%.
A few ideas to consider:
  • Tie each person’s work to the result (for the company, customer etc.) – Wouldn’t you like to know WHY you are doing something?
  • Take each employees’ ideas into consideration – Simply asking can go a long way if you truly care about the answer.
  • Don’t treat each employee the same – don’t we each have different goals and interests?
  • Are you developing your employees? – a little investment into your employees can go a long way.
  • Do you address poor performers? – one of the biggest issues we see if letting poor performers carry on. Everyone knows it and is less motivated. Why not just proactively address? Provide an opportunity and swiftly address if necessary.


Amazon’s Deal with Party City & More Competitors

September 8th, 2018

While I presented on the Amazon Effect to a specialty group of ProVisors (trusted advisors) members focused on manufacturing and distribution recently, Amazon was firming up a deal with Party City to offer an assortment of items. This is just the latest in a stream of retailers collaborating with the competition.  Party City follows Kohl’s (see the sign in the picture below), Sears, Nike, Chico’s and more. This is especially interesting because at our recent Harvey Mudd executive roundtable event, almost every CEO mentioned a time when he/she collaborated with the competition.  Perhaps we should be keeping our mind open to the possibilities?

 

 

 

 

 

What Should We Consider and/or What Impacts Could Arise?

Since Amazon is willing to search for win-win deals with the competition, who knows what will come next?  Are you impacted by Amazon? Every client we work with has said they are impacted in one way or another – yet 1% actually work or compete directly with Amazon.  They have certainly become a disruptor! Perhaps that’s why such an ‘old’ topic is still requested by several groups in speaking circles.

Who is the Amazon of your industry?  Or, can your company take on that role?  It can be easier to create the rules than to follow behind.  Yet, if no one follows, that can be an equally significant issue, as well.  

It may be worth asking questions of your employees – are they paying attention to what’s going on in the industry and with your supply chain partners?  Do they have ideas that might revolutionize your customer experience? How do you know if you haven’t asked? Or encouraged innovation?

In 100% of our clients, we’ve found employees with ideas that management knew nothing about.  9 times out of 10, the ideas have some merit. You never know…..it may very well lead to being the  disruptor.