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Next Generation Demand Management: People, Process, Analytics, and Technology



Next Generation Demand Management: People, Process, Analytics, and Technology

Charles W. Chase

ISBN: 978-1-119-18663-2 August 2016 288 Pages


A practical framework for revenue-boosting supply chain management

Next Generation Demand Management is a guidebook to next generation Demand Management, with an implementation framework that improves revenue forecasts and enhances profitability. This proven approach is structured around the four key catalysts of an efficient planning strategy: people, processes, analytics, and technology. The discussion covers the changes in behavior, skills, and integrated processes that are required for proper implementation, as well as the descriptive and predictive analytics tools and skills that make the process sustainable. Corporate culture changes require a shift in leadership focus, and this guide describes the necessary "champion" with the authority to drive adoption and stress accountability while focusing on customer excellence. Real world examples with actual data illustrate important concepts alongside case studies highlighting best-in-class as well as startup approaches.

Reliable forecasts are the primary product of demand planning, a multi-step operational supply chain management process that is increasingly seen as a survival tactic in the changing marketplace. This book provides a practical framework for efficient implementation, and complete guidance toward the supplementary changes required to reap the full benefit.

  • Learn the key principles of demand driven planning
  • Implement new behaviors, skills, and processes
  • Adopt scalable technology and analytics capabilities
  • Align inventory with demand, and increase channel profitability

Whether your company is a large multinational or an early startup, your revenue predictions are only as strong as your supply chain management system. Implementing a proven, more structured process can be the catalyst your company needs to overcome that one lingering obstacle between forecast and goal. Next Generation Demand Management gives you the framework for building the foundation of your growth.

Foreword xiii

Preface xv

Acknowledgments xxi

About the Author xxiii

Chapter 1 The Current State 1

Why Demand Management Matters More Than Ever 4

Current Challenges and Opportunities 14

Primary Obstacles to Achieving Demand Management Planning Goals 21

Why Do Companies Continue to Dismiss the Value of Demand Management? 23

Summary 28

Key Learnings 29

Notes 30

Further Reading 30

Chapter 2 The Journey 31

Starting the Supply Chain Journey 32

Introducing Sales & Operations Planning (S&OP) into the Supply Chain Journey 34

Sales & Operations Planning Connection 34

Transitioning to a Demand-Driven Supply Chain 40

The Digitalization of the Supply Chain 46

Leveraging New Scalable Technology 51

Benefits 52

Summary 53

Key Learnings 54

Notes 57

Chapter 3 The Data 59

What Is Big Data? 60

Why Is Downstream Data Important? 68

Demand Management Data Challenges 71

CPG Company Case Study 75

Does Demand History Really Need to Be Cleansed? 78

How Much Data Should Be Used? 81

Demand-Signal Repositories 82

What Is Demand Signal Analytics? 86

Demand Signal Analytics Key Benefits 87

Summary 89

Key Learnings 91

Notes 92

Further Reading 93

Chapter 4 The Process 95

Centers of Forecasting Excellence 97

Demand Management Champion 99

Demand-Driven Planning 100

What Is Demand Sensing and Shaping? 100

A New Paradigm Shift 113

Large-Scale Automatic Hierarchical Forecasting 115

Transactional Data 116

Time Series Data 117

Forecasting Models 117

Skill Requirements 120

Summary 121

Key Learnings 123

Further Reading 125

Chapter 5 Performance Metrics 127

Why MAPE Is Not Always the Best Metric 128

Why In-Sample/Out-of-Sample Measurement Is So Important 131

Forecastability 135

Forecast Value Added 137

Ho: Your Forecasting Process Has No Effect 138

Summary 144

Key Learnings 145

Notes 146

Further Reading 146

Chapter 6 The Analytics 147

Underlying Fundaments of Statistical Models 148

How Predictable Is the Future? 153

Importance of Segmentation of Your Products 157

Consumption-Based Modeling 167

Consumption-Based Modeling Using Multi-Tiered Causal Analysis 168

Consumption-Based Modeling Case Study 170

Summary 179

Key Learnings 180

Notes 181

Further Reading 181

Chapter 7 The Demand Planning Brief 183

Demand Planning Brief 186

Overview 187

Background 188

Recommended Forecast Methodology 188

Model Hierarchy 190

Model Selection Criteria 190

Supporting Information 192

Analytic Snapshot 194

Model Selection and Interpretation 199

Scenario Analysis 205

Summary 212

Key Learnings 213

Chapter 8 The Strategic Roadmap 215

Current State versus Future State 216

Current State 223

Future State 226

Gaps and Interdependencies 237

Strategic Roadmap 245

Summary 252

Index 253

ChapterPageDetailsDatePrint Run
113Errata in Text
Please change Nestle Chocolate Company to "Nestle".

259Errata in Text
Index entry "Nestle Chocolate Company" should simply read as "Nestle".