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Forecasting and Inventory Planning

Forecasting and Inventory Planning. 5 th July 2006 THE 10 POINTERS. Forecasting and Inventory Planning. Why Do Forecasts? and What Should They Achieve?. Being able to successfully answer the above questions Will indicate whether a client needs help and How you can help him.

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Forecasting and Inventory Planning

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  1. ForecastingandInventory Planning 5th July 2006 THE 10 POINTERS

  2. Forecasting and Inventory Planning Why Do Forecasts? and What Should They Achieve? Being able to successfully answer the above questions Will indicate whether a client needs help and How you can help him

  3. Forecasting and Inventory Planning Why Do Forecasts? Forecasts are an attempt to estimate future Sales such that planning Templates can be Assembled to address Constraints, Capacity, Material requirements etc Every business is normally involved in Some form of cyclical forecasting The above implies a Formal Process Which is People/Team driven

  4. Forecasting and Inventory Planning What Should They Achieve? In the ideal world they should achieve Balance between Supply and Demand Such that the company can have the right Product MIX in the right place at the right time And through this to move towards the 80/20 Rule Where 80% of the revenue is generated by 20% inventory The benefits of Achieving the above will guarantee improved returns on equity and the company will become known as a Reliable supplier and will be able to gain Consequential Market Traction

  5. Within each supply chain are immense inherent risks. Especially in a rapidly globalizing and integrated world Getting it wrong can have severe knock on effects Either in the form of stock outs or excess and obsolete stock most companies have realized the need To Be Lean and Mean Managing that RELATIVE RISK is becoming a pressing strategic And Tactical issue for most CEO’s Understanding the above should lead as a matter of course To assessing the applicability of SYSPRO forecasting And Inventory Planning ForecastingandInventory Planning

  6. 10 Pointers as to whether Syspro Forecasting and Planning Modules will help a potential client. Assessing The Relative Risk ForecastingandInventory Planning • Inventory Planning Processes • Inventory Policies • Strategic Vision • Supply Chain Configuration • Degree of Chaos • Type of Demand • Product Source • Funding • Type of Business • Measurement Criteria

  7. Assessing The Relative Risk ForecastingandInventory Planning • Inventory Planning Processes • Are they formal and documented? • Who initiates and takes responsibility? • How frequently are they done? • Number of Forecasts? • At item process level? • Inventory Policies • Are there any policies? • What are they? • Are they aligned with sales and supply?

  8. Assessing The Relative Risk ForecastingandInventory Planning • Strategic Vision • Is there a vision of where the organization is going? • Is this documented and can it be shared? • What impact will this have on the supply chain? • Supply Chain Configuration • Where are the items supplied from? • What are they? • What integration is required into differing functions? • Supply finished products or sub assemblies? • Number of Items? • Number of Stocking Locations? • Number of Branches?

  9. Assessing The Relative Risk ForecastingandInventory Planning • Degree of Chaos • How well organised is the warehouse? • What relationships do they have with suppliers? • What is there relationship with their Customers • How do they distribute product? • Is manufacturing well planned and executed? • Type of Demand • Is there seasonality? • Is it totally random? • Do they supply to contract? • Do they make only to order?

  10. Assessing The Relative Risk ForecastingandInventory Planning • Product Source • Where does their product originate? • What are the differing lead times? • How reliable are the suppliers? • What are the EOQ/EBQ etc? • Funding • Terms of Trade? • FML? • How is inventory funded? • Gross Margins? • What is the expected PBIT?

  11. Assessing The Relative Risk ForecastingandInventory Planning • Type of Business • How much of the supply chain do they control? • Does it trade? • Does it assemble? • Does it manufacture? • All of the above? • Ownership structure? • Measurement Criteria • Are there any formal measurement processes? • What is important? • How frequent? • Real time? • Drill down?

  12. Forecasting and Inventory Planning Summary • Understand the functionality and capabilities of SYSPRO • Ask the correct questions • Make sure that your proposal can stand up to scrutiny • There are additional analytical tools in presales • Critically assess the clients actual requirements • Talk to the correct people • Getting the PROCESS RIGHT will add immense benefit

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