Demand Planning
Empower your global Demand Planners with powerful algorithms and effective means for collaboration.
Predicting the future demand is a difficult and time-consuming process. Outperform Planning enables the demand planner to segment the forecasting process in a simple way and apply different techniques for generating a demand plan. The techniques range from applying the forecasting engine, applying a heuristic based on recent order patterns or collaborating with customers and account managers or applying a management directive to a group of customers/products.
Benefits
With the simple and intuitive way of managing the demand planning process, we have achieved a higher level of collaboration between salespersons and demand planners.
Forecasting
The forecast engine is just one of the ways of generating a forecast.
Outperform planning gives you the freedom to work on any aggregation level that matters for your business in a particular area. Forecasts are generated by analyzing historical sales patterns. Outperform takes the predictable trends and determines their influence on the demand history to predict their influence on future sales.
Seasonality
The forecasting engine detects seasonality by using a moving average over the periods, determines their average percentage deviation from the mean over an aggregated period, averages and normalizes this over the entire historic horizon. This is done for various cycle lengths. Seasonality is for a given cycle length is considered to be relevant when the standard percentage deviation exceeds 5%. If so, demand history is adjusted for these deviations.
Inflation
Applies when the demand is measured in monetary units. Due to inflation, the money value of sales tends to grow more than the actual growth of the business, disturbing the picture. In this case, demand is deflated by converting everything to Net Present Value. This requires a history of inflation as well as a reliable prediction of inflation in the future usually from government sources.
Demography
Some products appeal to a particular age or income group. The income per capita and other demographic trends in a region thus influence the demand, beyond the product’s intrinsic growth.
Market Development
You are probably aware of general market trends for your industry in the future. As above, removing that external influence will yield a better forecast. For example, the unadjusted demand history shows a small decline, but in fact, you know that the product has consistently grown 10% per year compared to industry average. If the general consensus predicts that your industry will bounce back in the next year, the forecast engine can use this knowledge to predict the deserved absolute growth of your product, rather than continuing the decline.
Events
Past events like marketing campaigns or product promotions can explain sudden peaks in the demand history. The forecasting engine can pick up on these peaks, to get a clearer picture of a product’s intrinsic growth or decline, providing a better future forecast.
Benefits
A simple and intuitive solution for applying forecasting techniques to generate a demand plan. Improved MAPE over previous forecasting methods.
Collaborative Planning
Work from your perspective whilst maintaining traceability and accountability with your colleagues.
The most powerful aspect of the application is the pivot table style representation with edit capability at all levels. When the data is modified in any of the reports, the system propagates changes to aggregate and detailed levels. This functionality makes adjusting demand values effortless compared to doing it in EXCEL®. Users can draw a curve and then fix a total value for the year, apply a percentage uplift to an existing plan and work on subsets of the data based on a combination of attributes. The system brings role-based data access so planners in the US, South America, Europe and Asia can all work on their own data, whilst the global roll up is consistent with the constituent parts.
An approval workflow can be imposed to structure the Sales & Operations Planning process. The interactions with numbers are exactly like in EXCEL® and for ad-hoc analysis or data entry, a tight and natural integration with EXCEL® is available for all reports. Multiple plans can be stored and compared which ensures accountability, making the discussions around questions such as “was this demand known far enough in advance to be able to supply it?” fact-based and constructive.
Benefits
Collaborative planning has enabled our customers in getting a consensus number that is accepted by the relevant parties. The ease of use of Outperform Planning means there is more time for agreeing on the business assumptions.
Promotions Planning
Promotions are a mechanism to drive volume growth in strategically selected product portfolios.
For reliable forecasting, promotional demand must be separated from regular demand. This is not so trivial in practice; customers do not make their buying motivations explicit so the total historical sales are always a mixture. We do not believe in detecting the promotions automatically. Therefore, the fact that a certain portion of historical demand represents promotional demand may be imported from ERP or indicated as part of history refinement. The concept of promotional calendars can greatly support this.
Our solution supports the so-called multi-period events. This means that the user can maintain a catalog of named events that specify a certain impact on the demand. Such a multi-period event can then be used to indicate the impact on historical demand so as to separate regular demand from event-driven demand (e.g. promotions) and the event can be linked to future periods so as to indicate the impact on demand in the future. Events and event profiles can also be used to specify the distribution of demand over the period. Plan comparison supports the tracking of the effectivity of the promotional spend.
Benefits
Using Outperform Planning, you can manage promotions and regular forecast together in the same solution, getting the best result from combining statistics and market knowledge.
