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&. S. D. Supply and Demand Workshop. Supply & Demand Workshop. MIDDLE EAST GROUP Dubai, United Arab Emirates March 22-23, 2005. Global Knowledge Center. Created in July 2002. GLOBAL 15 in 2010. MISSION

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Supply demand workshop

&

S

D

Supply and Demand

Workshop

Supply & DemandWorkshop

MIDDLE EAST GROUP

Dubai, United Arab Emirates

March 22-23, 2005


Global Knowledge Center

  • Created in July 2002

GLOBAL 15 in 2010

MISSION

Promote the practice of the Toyota Way in Sales and Marketing through the facilitation of knowledge building, sharing of global best practices and continuous improvement (kaizen).

Day One-Final


Gkc organizational chart

Executive

Committee

GKC Steering Comm

John Kramer

Vice President

TWSM Promotion Group

(Tokyo OMD)

Jeanne Glick

Admin. Assistant

Warwick Harvie

Ray Lindland

National Manager

National Manager

Ken Takagi

Tammy Ching

Jing Tadeo

Erin Ilgen

Manager

Sr. Admin.

Manager

Manager

Hugo Duran

Ron Birkle

Bill Burden

Emma Gibson

Financial Consultant

Consultant

TWSM Consultant

Walter Lessberg

TWSM Consultant

GKC Organizational Chart

GKC Champions

Day One-Final


Global Knowledge Center

  • Learning forum for the practical application of

TWSM principles (Way of Life/ Silver Book)

  • Development of a conveniently accessible

knowledge sharing platform (www.toyotagkc.com)

  • Building global great practice know-how and

innovative ideas on each customer touch point

Day One-Final


Agenda day 1

&

S

D

Supply and Demand

Workshop

Agenda – Day 1

Module 1 Introduction to Toyota Way in

Sales & Marketing

Module 2 : Vehicle Distribution and

sharing of S&D processes

Module 3 : Outline of S&D Operations

Module 4 : Sales Forecasting and

Sales Planning

Day One-Final


Agenda day 2

&

S

D

Supply and Demand

Workshop

Agenda – Day 2

Module 4 : Sales Forecasting and

Sales Planning (continued)

Module 5 : S&D Planning - Rundowns

Module 6 : Key Performance Indicators –

Setting and Analysis Process

Day One-Final


Supply demand workshop ground rules
Supply & Demand Workshop Ground Rules

  • Be on time

  • Turn off phone, pager, PDA

  • Participate fully

  • Respect differing opinions

  • Constructive comments

Day One-Final


Participant introductions
Participant Introductions

  • My name

  • Where I’m from & what I do

  • Length of time with Toyota and current position

  • What do you expect from this workshop?

Day One-Final


&

S

D

Supply and Demand

Workshop

Module 1 : TWSM Concept

Day One-Final


The toyota way
The Toyota Way

Toyota Production System

The Toyota Way in

Sales and Marketing

The Toyota Way 2001

Day One-Final


The toyota way1
The Toyota Way

The Toyota Way 2001

Continuous

Improvement

Respect for

People

Challenge

Kaizen

Genchi Genbutsu

Respect

Teamwork

Day One-Final


Toyota way in sales and marketing
Toyota Way in Sales and Marketing

  • Purpose

  • Principles

  • People

  • Process

  • Practice

5 P’s

Day One-Final


TWSM

1 Purpose

  • Align with heritage from Toyota’s predecessors

  • Link TMC, Distributors, and Dealers

Dealer

Distributor

The Toyota Way in

Sales & Marketing

TMC

Day One-Final


TWSM

2 Principles

  • Vision

    • Become the most successful and respected car company in each market around the world

    • Offer customers the best purchasing and ownership experience

Day One-Final


TWSM

2 Principles

  • Mission

    • Customer First/Lifetime Customer

    • Radar for All of Toyota

Day One-Final


TWSM

3 People

  • “The most important asset of Toyota and the determinant of the rise and fall of Toyota.”

    —Eiji Toyoda

Day One-Final


TWSM

3 People

3 C’s for Harmonious Growth

  • Communication

  • Consideration

  • Cooperation

  • 3 C’s for Innovation

  • Creativity

  • Challenge

  • Courage

Day One-Final


TWSM

3 People

  • Just-In-Time (JIT)

    • “Produce the right product, at the right time, in the right amount.”

      —Taiichi Ohno

Day One-Final


Jit jumble
JIT Jumble

As a team, work together to unscramble the JIT definitions on the game board.

Day One-Final


Fewer number and they are integrated into the system

Customers’ orders pull the products through the dlrship

Small batches are made with reduced setup time

Everyone’s responsibility

Emphasis is on small but continuous improvements

High turnover with minimum inventory level

Empowerment of workers enables quick response

Satisfied, loyal customers = Repeat purchasers

Multi-skilled, flexible and work well in teams

The system pushes the products through the dlrship

Large batches are made due to high setup time

“If it ain’t broke, don’t fix it” attitude

Low turnover due to high inventory level

Q.C. Inspector’s Job

Specialized and with strict work rules

Centralized at management level

Supplier’s are kept at arms length

Sporadic customers = One-time buyers

Day One-Final


The toyota way in sales and marketing
The Toyota Way in Sales and Marketing

Continuous improvement

Respect for people

  • Purpose

  • People

  • Principles

  • Process

  • Practice

Guiding principles

The Toyota Way

Toyota Production System

The Toyota Way in

Sales and Marketing

Day One-Final


The toyota way in sales and marketing1
The Toyota Way in Sales and Marketing

Own

Customer

Experience

Search

Obtain

Purchase

Visit

Own the vehicle with confidence

Obtain necessary information quickly and easily

  • Purpose

  • People

  • Principles

  • Process

  • Practice

Obtain the vehicle with ease of mind

Drop in to sales outlets with ease and pleasure

Understand the value of the purchased vehicle

Day One-Final


Objective
Objective

  • Create supply and demand operations that meet both

  • the expectations of our customers and the standards

  • of Toyota.

  • Fast, precise and high-quality supply to customers

  • Implement a sales and production plan without any

  • Muri (overburden), Muda (waste) and Mura (unevenness).

Day One-Final


Sales Plan

Create a sales plan

in line with market trends

Formulate sales promotions

to accomplish sales plan

Dealer Orders and

Production schedule

Allocate to dealers in the

best possible way to

optimize sales

opportunities

Allocation Schedule

Create a production

schedule jointly with both sales

and production sides

Vehicle Delivery

Prepare a fair and flexible

allocation schedule

Deliver vehicles

just-in-time

OBTAIN Action guidelines

Day One-Final


Workshop mission statement
Workshop Mission Statement

Facilitate your creation of an “OBTAIN” model

  • theoretical information

  • practical applications

  • associated with a credible and efficient monthly Supply and Demand operations

Day One-Final


Challenge!

Genchi Genbutsu!

Kaizen!

P-D-C-A

Respect!

Teamwork!

The Toyota Way

Day One-Final


Module 2 vehicle distribution

&

S

D

Supply and Demand

Workshop

Module 2 :Vehicle Distribution


Tms selling cycle
TMS SELLING CYCLE

Sales &

Production

Planning

Production

Negotiation

Sales

Analysis

Area

Allocation

Sales

Reporting

Production

Admin.

Vehicle

Sales

Production

Order

Analysis

Vehicle

Admin.

Dealer

Allocation

Production

Order

Vehicle

Production

Day One-Final


Supply and Demand Operation at TMS

Monthly Operational Flow

May

June

July

Final

Region Order

Jun 5

Dealer

Allocation #1

Jun 15

Dealer

Allocation #2

Jul 1

Region

Collect and

compile

result data

May 1-31

Sales Forecast

Jun 1

Order

Validation &

Processing

Jun 5

Dealer Swaps

and Order

Changes

Jun 15-Jul 10

Dealer Swaps

and Order

Changes

Jul 1- 25

Sales Planning

Rundown

Jun 1

Preliminary

Regional

Order

Jun 3

Suggested

Region Order

May 20

TMS

Internal Sales

Meeting

Jun 1

Regional

Allocation

Jun 1

Production

Evaluation &

Scheduling

Jun 3

Production

Confirmation

Jun 4

NAP Production

Jul 1-15

NAP

NAP Production

Jul 16-31

Day One-Final


Module 3 outline of supply demand operations

&

S

D

Supply and Demand

Workshop

Module 3 :Outline of Supply & Demand Operations


S d operation
S & D Operation

Plan

Action

Do

Check

  • - Sales forecast

  • Vision/Sales plan

  • Rundown

  • Adjust production order

  • - Adjust allocation

S&D

Operation

- Production order

- Allocation

S & D KPI

Day One-Final


S d operation1
S & D Operation

Module Objectives:

  • To understand the purpose and role of S&D Operations.

  • To understand the monthly processes of the S&D Operation.

Day One-Final


Purpose and Significance

S&D Operations consist of two main processes:

1. Creating a Sales Plan

2. Creating a Supply & Demand Plan (Rundown)

Day One-Final


Types of s d plan
Types of S&D Plan

Sales Plan and S&D Plan can be divided into levels.

Plan Type

Plan Positioning

Annual Plan

(12 months ahead)

Sales volume plan

Compare with

Annual Sales Target

Rolling 6 month Plan

(6 months ahead)

Mainly, Sales volume plan

Reflect Production

Arrangements

Monthly Plan

N N+1 N+2

Mainly, N Production Order

Adjust with DLR Order

Reflect Allocation Plan

Monthly Operation

( N )

Deal with additional/ revised order for the closest month N

Day One-Final


Purpose of annual plan
Purpose of Annual Plan

  • Target sales volume

  • Base of production planning

  • Base of business planning

Day One-Final


Tmc s aim
TMC’s Aim

Identify the proper volume

of vehicles to produce

Market Demands

Produce enough

volume of vehicles

in a shortest time

Deliver vehicles

in the shortest time

Day One-Final


Making of annual plan
Making of Annual Plan

  • Based on previous plan and result.

  • Consider market factor changes

    • Economy, Market

    • Duty, Tax change etc.

    • Competitors movement

      • Price

      • Products

      • Promotions

      • Sales channel etc.

Day One-Final


Making of annual plan1
Making of Annual Plan

  • Set goal for the next 3 years

  • Find out most probable sales figure

Share 30%

Sales

2000units

Share 30%

Day One-Final


Process of approval
Process of approval

May/Oct

General Managers meeting

3 months work

Board Meeting(Consultation)

June/Nov

Director/General Manager Meeting

Board Meeting sales side

July/Dec

Board meeting production side

Final Approval by board

Public announcement

Day One-Final


Utilization of annual plan
Utilization of Annual Plan

Personnel

Production Control

Global Production Planning

Vehicle Logistics

Production Engineering

Annual

Plan

Domestic Planning

Overseas Production Planning

Accounting

Corporate Planning

Procurement

Plants

Supplier

Government

Day One-Final


Gap between annual plan and result
Gap between annual plan and result

400,000 units

12% increase

‘000

Day One-Final


Annual global sales result
Annual Global Sales Result

‘000

Day One-Final


Monthly s d operation
Monthly S&D Operation

  • A fundamental activity in the automobile business

  • Accuracy and objectivity are necessary tools in decision-making

Day One-Final


Purpose of monthly operation
Purpose of monthly operation

  • Forecast market & sales for short term

    (a few months)

  • Determine adequate supply volume

  • Adjust and fix monthly production capacity

Day One-Final


Market

trends

Sales results

CC results

Forecast Sales / CC’S

and Create Sales Plan

Sales/CC Forecast

Sales target

including Profit

Sales Plan

Inventory

Back order

S&D Plan

(Rundown)

Create S&D Plan

Sales Meeting

Production

Order

Allocation

Plan

Steps in the S&D Operation

Day One-Final


Customer Contracts:

  • Are commonly used in Japan, Europe and Africa, but not in the U.S. and other countries

  • Some customers are willing to wait for the specific vehicle they desire. How long will a customer wait?

  • Signed, binding agreement

  • When undelivered, are back orders

Day One-Final


The significance of customer contract data

Time lag of several weeks

The Significance of Customer Contract Data

Delivery

Payment

Sales talk

Retail Sales

Customer

contract

Sales Forecast alone

will not guarantee

high accuracy

Customer Contract (CC)

forecast is important for

leading indicator of sales

Day One-Final


What is a Customer Contract?

What is your definition of

“Customer Contract”?

Day One-Final


Steps in the s d operation

N-2

N-1

DLR

Collect/Compile

Result Data

(1)Forecast

Demand (CC)

Adjustments with Dealers

(7)Adjust

Allocation Plan/

Assignment Plan,

as necessary

(2) Create

Sales Plan

Distributor

(3) Create

S&D Plan

(Rundown)

(5) Allocation

Plan

(8) Final Full

Spec Order

(6) Preliminary

Order

(4) Suggested

Order

(9) Create

Final Rundown

Allocation

Capacity

Check

TMC

TMC Production Mtg

For N mth production

Steps in the S&D Operation

( Timing )

Internal

Sales

Meeting

Day One-Final


Key Points of the Operation

  • Well-planned and flexible management

  • Backed by accurate Sales / Stock- vehicle status information

    (and Customer Contract information if available)

Day One-Final


Concept of S&D Management

  • The creation of a well thought out plan is important as it will help maximize sales opportunities while maintaining lean stock without losing potential customers or profits.

  • Each step must be carried out properly.

  • When executing these steps it is important to take into account lead time and possible delays.

Day One-Final


Objectives and Significance

Concept of S&D

S&D Management Operation Function

1. Collect accurate

information

(1) Forecast

demands

(2) Base Sales Plan on

Market Forecast (& CC if available)

2. Improve Sales Plan

accuracy

3. Make flexible Production

Arrangements based on

Sales Plan

(3) S&D Plan

(Rundown)

4. Order control/Allocation

plan based on Sales Plan

(4) Production Arrangements

& Allocation Plan

5. Confirm correspondence

regarding additional and

revised orders

(5) Adjust vehicle

Allocation*

Day One-Final

* May not be available to some distributors


Importance of s d operation
Importance of S&D Operation

Sales Plan

S&D Plan

Distributor

Vehicle allocation

Distributor’s

in respective countries

Production

arrangements

Production

arrangements

Production

arrangements

Production

arrangements

Middle East Div.

Europe Div.

Other Divs.

Centralize

Responsible divisions

Production

arrangements

Production

arrangements

Production

arrangements

Domestic Planning Div.(Japan)

Overseas Planning Div.

Centralize Overseas

Planning Div.

Production

arrangements

Production

arrangements

Production Control Div.

Make adjustments

in Production Control

Production Plan

Production

Deploy

Production Plan

Plan deployment at

respective factories

Day One-Final


Ordering

D-25

D-20

D-13

D-12

D-10

D-8

D-7

Dist

Order

Adjustment

MED

Order Meeting

Order Input

Operation Meeting

Final Production Schedule Arrange

OPD

Allocation Meeting

PCD

Plant Meeting

Ordering

* D=Production start date

Day One-Final


Order process at tmc
Order Process at TMC

Required market information for ordering meeting between Territorial Division and OPD

  • Result of last month (Sales & Stock situation)

  • Sales plan for the coming 3 month

  • N Month Production Order

  • Naiji (order indication) for N+1, N+2

  • Spot Tender Order position report

Day One-Final


Order to arrival lead time

DLR

DLR

DLR

DLR

DLR

DLR

DLR

DLR

Vehicle

Orders

Dist

Dist

Dist

Dist

TMME

TMME

TMME

TMME

Distributors

/OPD

Asia

TMC:

OPD

Asia

TMC:

OPD

Asia

TMC:

OPD

Asia

TMC:

OPD

Amer.

Amer.

Amer.

Amer.

Production

Orders

TMC:

PCD

TMC:

PCD

TMC:

PCD

TMC:

PCD

Ship

Orders

Order to Arrival Lead-time

N-1

N

N+1

N+2

N+3

N+4

Day One-Final


Order to arrival lead time1

The relationship between a rolling 6-month plan and monthly plan

CC units

Sales volume

Production

Order

DLR

DLR

DLR

DLR

DLR

DLR

DLR

DLR

DLR

DLR

DLR

DLR

Vehicle

Orders

Dist

Dist

Dist

Dist

Distributors

/OMD

To create Production Orders for months N, N+1, N+2,

Sales (CC) volume plan until at least month N+4 is required!

TMME

TMME

TMME

TMME

Asia

TMC:

OPD

Asia

TMC:

OPD

Asia

TMC:

OPD

Asia

TMC:

OPD

Amer.

Amer.

Amer.

Amer.

Production

Orders

TMC:

PCD

TMC:

PCD

TMC:

PCD

TMC:

PCD

Ship

Orders

N-1

N

N+1

N+2

N+3

N+4

Order to Arrival Lead-time

Day One-Final


Ordering1

D-25 plan

D-20

D-13

D-12

D-10

D-8

D-7

Dist

Order

Adjustment

MED

Order Meeting

Order Input

Operation Meeting

Final Production Schedule Arrange

OPD

Allocation Meeting

PCD

Plant Meeting

Ordering

* D=Production start date

Day One-Final


Production capacity adjustment
Production capacity adjustment plan

* D=Production start date

D-25

D-20

D-13

D-12

D-10

D-8

D-7

Dist

Order

Adjustment

MED

Order Meeting

Order Input

Operation Meeting

Final Production Schedule Arrange

OPD

Allocation Meeting

PCD

Plant Meeting

Day One-Final


Production capacity adjustment 1
Production Capacity Adjustment (1) plan

  • Bring worker from one line to another

  • Team Leader joins the Line

Team Leader

Team Leader

Day One-Final


Production capacity adjustment 2
Production Capacity Adjustment (2) plan

  • Bring workers from other plants

Plant A

Plant B

Plant D

Plant C

Day One-Final


Production capacity adjustment 3
Production Capacity Adjustment (3) plan

  • Employ temporary workers

Day One-Final


Summary
Summary plan

  • Monthly Operation is the adjustment between

    • Annual plan to actual order

    • Sales side and Production side

Annual Plan

Monthly operation

Actual

Order,

Production

Day One-Final


Steps in monthly s d operation
Steps in Monthly S&D Operation plan

Vehicle assignment to dealers

A. Allocation method – Americas & Oceania

B. Suggest and Firm method – Asian Countries

(i.e., Thailand, China)

C. Central stock method – Europe & Japan

Day One-Final


Key Points of the Operation plan

  • Failure to utilize proper S & D Operation procedures ...at any point will have negative effect on all of the subsequent processes

  • Sales Plan and Rundown must be updated every month

Day One-Final


Annual calendar
Annual Calendar plan

Completion dates for Supply & Demand processes

Essential as a planning tool

Developed jointly - with affected Distributor and TMC departments

Distributed to everyone that is impacted by / or provides input to the Supply and Demand processes

Day One-Final


Annual calendar1
Annual Calendar plan

  • Every process or key date must be listed for each month

  • Code letters or characters can be used because of

  • the number of processes (definitions listed as footnotes)

A1 M/E sales reports B Sales forecast D Sales mtg

@ Toyota AG holiday # TMCA holiday *** TMC holiday

See TMS Annual calendar in the Attachment/Examples section of your manual for an example of how your calendar might look.

Day One-Final


S d impact on profits
S&D Impact On Profits plan

  • The S&D Operation is the process of planning sales opportunity.

  • The quality of the plan will have a significant impact on sales volume as well as profits.

Day One-Final


1 st major impact on dealer profits
1 planst Major Impact on Dealer Profits

Out of

stock

Order

Supplied

vehicle

A. Loss of Sales Opportunity

  • Requested vehicle is unavailable during dealer ordering stage, due to unsuccessful S&D planning.

  • Lack of availability will result in orders going to the competition:

  • 10 unavailable vehicles/month equal to loss of $150,000 in dealer sales

  • (assumes $15,000 per vehicle)

  • If Dealer margin is $1000 per vehicle,

  • loss of $10,000 every month !

Day One-Final


2nd Major Impact on Dealer Profits plan

B. Increased costs due to excess inventory

  • Inaccurate S&D planning results in excess inventory.

Where there is excess inventory:

Excess dealer stock of 10 units/month is equal to unavailable funds worth $140,000

Overstock

Supplied

vehicle

Order

Assuming an interest rate of 6%, this would cost $700/month ($8400 per year)

Assuming an inventory storage and handling cost of $50 per unit/month, this would cost $500,

=> A total cost of $1200/month

Day One-Final


Thoughts to consider
THOUGHTS TO CONSIDER plan

If you have excess Distributor inventory for any reason,

do not push the problem to your dealer unless you

commit to support his sales efforts in such a way

as to maintain and / or gain customer satisfaction.

Customer first……

then dealer……

then distributor.

Day One-Final


Questions? plan

Day One-Final


Module 4 sales forecasting and planning

& plan

S

D

Supply and Demand

Workshop

Module 4 :Sales Forecasting and Planning


Sales Forecasting plan

Module Objectives:

  • To understand the purpose of Sales Forecast

  • To understand and learn Forecasting methods

  • To learn the steps required in a Sales Plan Operation

Day One-Final


Purpose of sales forecast
Purpose of Sales Forecast plan

To grasp the market condition by making objective analysis based on demand &

supply and other gathered data

Day One-Final


Sales forecast
Sales Forecast plan

  • Forecasts must be made by analyzing the actual market.

Factors such as Sales Target and Annual Plan

are NOT included.

  • Different methods should be used to establish trends

    to maintain objectivity.

  • The result should be evaluated when the target month is

    over.

“Check” step of PDCA

Day One-Final


Significance of sales forecast
Significance of Sales Forecast plan

  • When forecasts are created, market trends can be analyzed with more precision.

  • Sales promotion measures can be planned with higher accuracy.

Day One-Final


Significance of Sales Forecast plan

Market Trend

Annual

Plan

Sales

Target

Sales

Plan

Study Sales

Promotion

Measures

Create

Rundown

Assessing the effects of a Sales Promotion Effort becomes challenging

Planning is determined rather haphazardly

When a forecast is NOT created:

Market trend is only in

the mind of person setting

targets and plan

Hmmm… it seems that the Annual Plan calls for a July sales target of 1,500 units

We might not be able to sell 1400 units in July…

I wonder what the market will be like this year?

Maybe we should run a promotion….

Day One-Final


target plan

trend

Target and Trend

GAP

  • Realize the gap between target and trend utilizing two methods (trend cannot realize the target)

In order to achieve the target volume,

what kind of campaign / sales activity is needed?

Day One-Final


CC or Sales Forecast plan

1,100 units

Create Rundown

Assessing Sales Promotions becomes easier as you are able to track results

GAP

Study Sales

Promotion

Measures

Sales Target

1,500

Order

Plan

Sales

Plan

Significance of Sales Forecast

The gaps between forecast and target figures are determined and accounted for

When a forecast IS generated:

Hmmm… our analysis has determined that our sales target for July will be 1,500 units.

We can sell +300 units in July by promotion.

Using forecasted Trend figures, we will be able to determine the Sales and order plan

We will definitely be able to sell at least 1,400 units in July

Day One-Final


Sales plan
Sales Plan plan

  • Formulate Sales Plan based on Sales Forecast

  • Sales Forecast and Sales Plan are different.

  • Sales Plan is made based on implementing sales promotion measures to fill the gap between Sales Forecast and Sales Target figures.

  • Person responsible for Sales Plan needs to formulate

  • “Sales Plan” that ensures achievement targets, by studying sales promotion measures and its anticipated effect. One must review the Marketing Calendar (annual sales promotion plan) and short-range sales promotion measures.

Day One-Final


Sales promotion measures
Sales Promotion Measures plan

There are two goals in sales promotion measures.

  • 1. To enhance product awareness

  • 2. To enhance competitiveness

Day One-Final


Sales promotion measures1
Sales Promotion Measures plan

  • Example of measures to enhance product

  • awareness:

    • Advertisement / promotions to enhance product awareness and brand image

    • Sales activity enhancement campaign (increase no. of sales people / outlets, reinforcement of organizational structure)

    • Show room events for increasing visits

Day One-Final


Sales promotion measures2
Sales Promotion Measures plan

  • Example of measures to enhance competitiveness

    • Price policy and product policy based on success/failure analysis

    • Dealer incentives

Day One-Final


Sales promotion measures3
Sales Promotion Measures plan

  • To plan effective sales promotion

    • Determine the reason product is selling or not selling, and draw plans that will have direct impact on the reasons.

    • Have the preliminary plan examined by reliable dealer and sales people who are well acquainted with the business.

    • Must be simple and specific that can be understood by everyone.

      • Hearing and picking up know-how from dealer/sales people is effective.

      • Know-how exchanged daily among sales people should be incorporated into Dist Sales Planning.

Day One-Final


(1) Collect information plan

A. Sales/Prodn

Results

B. Dealer

Sales Plan

  • Market Sales

  • Trends

(2) Market forecast

(3) Sales Forecast

Collect information

in a timely manner

Steps in Sales Forecast

Make forecast in

total and by Segment,

based on trends of

the market and other

makes.

Make forecasts for

each Series (models)

Day One-Final


Information to collect

A. Sales/Production results plan

  • Sales/Production Results/Inventory Status/CC if avail

  • By Series, by model, by color

B. Dealer Sales plan

DLR Rundown (By series, by model, by color)

C. Market Sales Trends

Collect, exchange information on other makes,

economical trends/ social situation

Information to Collect

Collect accurate results

as this will be the basic data

for making predictions

Reference for making

Sales Plan

Reference for judging

whether forecast

results are appropriate

Day One-Final


Market sales trends
Market Sales Trends plan

Market information is generally obtained by

Exchanging sales and other information with:

Automobile manufacturers associations

Contacts at other manufacturers and sales offices

Collecting sales and other information from:

Local and/or State Governments

Outside vendors

Trade publications and newspapers

T hey each vary in timeliness and accuracy

Day One-Final


Information sharing
Information Sharing plan

What information do you collect to make your sales forecast?

How do you reflect these information into your plan/forecast?

Day One-Final


Forecast methods
Forecast Methods plan

  • Various forecasting methods are available such as

    Trend value method

    Seasonal index method

    Share Method

    Other methods

We recommend that you use at least 2 types of methods to compare results

  • Consider the present market trends and historical sales

    promotions to select the most appropriate predicted

    figures.

Day One-Final


Forecast methods1
Forecast Methods plan

Objective: To learn the steps required in the Sales Forecast Operation

Create various forecast -> Compare the results -> Select figures

August CC Forecast

August Sales Forecast

Sep Oct NovDecJan. ….….…Aug

Sales

results

Trend valuemethod

30 35 32 35 41 28

Seasonal indexmethod

32 34 30 34 43 30

CCresults

Share method

34 38 34 36 43 32

Sales forecastfor this month

30 35 30 34 43 30

This seems most appropriate

when considering market trends

Day One-Final


Forecast methods2
Forecast Methods plan

1. Trend value method

Forecast is based on the trend ratio of the

forecasted month vs. previous months

using the sales history of a single or

multiple years.

  • Best when market is relatively steady or consistent.

Day One-Final


Image of trend value method

This year Sales results plan

Apr May Jun Jul Aug

30 35 32 35 41

Image of Trend Value Method

Image of Trend value method

Forecast

month

Sales units

3-month trend value ratio for Sept. = 1.05 (already calculated)

Apply trend value ratio 1.05 to

Average Sales of last 3 months (36)

Ave Sales of last 3 months

32 + 35 + 41 / 3 = 36 Sales

Forecast Sales for Sep

1.05x 36 = 38 Sales

Apr. May Jun. Jul. Aug. Sep. Oct. Nov.

Day One-Final


Trend value method exercise 1

Toyota plan

Birkle

Trend Value Method – Exercise 1

  • The chart below shows the sales results for years 2000 – 2004

  • Get the average of Jul, Aug, Sep and the trend value ratio for Oct.

  • Based on sales results up to Sept 2004, get the sales prediction for Oct 2005.

PLEASE REFER TO YOUR BINDERS – EXERCISE SECTION

Day One-Final


Trend value method answers

Toyota plan

Birkle

1.21

407

493

1.07

415

446

1.08

433

468

227

214

0.94

0.98

308

302

1.06

Trend Value Method – Answers

  • The chart below shows the sales results for years 2000 – 2004

  • Get the average of Jul, Aug, Sep and the trend value ratio for Oct.

  • Based on sales results up to Sept 2004, get the sales prediction for Oct 2005.

348.3 x 1.06 = 369

Based on

1 year = 421

2 years = 397

3 years = 390

370

Day One-Final

348.3


Trend value method exercise 2

Toyota plan

Birkle

Trend Value Method – Exercise 2

  • The chart below shows the sales results for years 2000 – 2004

  • Get the average of Jul, Aug, Sep and the trend value ratio for Nov & Dec.

  • Based on sales results up to Sept 2005, get the sales prediction for Nov &

  • Dec 2005.

PLEASE REFER TO YOUR BINDERS – EXERCISE SECTION

Day One-Final


Group Discussion plan

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example)

NOTE

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

2000

1,080

1,170

925

108%

79%

86%

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

2003

1,120

1,354

1,245

121%

92%

111%

2004

1,102

1,244

1,221

113%

98%

111%

2005

929

1,220

1,045

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example)

NOTE

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

2000

1,080

1,170

925

108%

79%

86%

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

2003

1,120

1,354

1,245

121%

92%

111%

2004

1,102

1,244

1,221

113%

98%

111%

2005

929

1,220

1,045

131%

86%

112%

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example)

NOTE

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct. FMC*

2001

857

1,022

680

119%

67%

79%

1ST qtr after FMC*

2002

1,356

1,464

1,298

108%

89%

96%

2003

1,120

1,354

1,245

121%

92%

111%

Sept. Special

Version

2004

1,102

1,244

1,221

113%

98%

111%

April-June

Campaign

2005

929

1,220

1,045

131%

86%

112%

*FMC= Full Model Change

Day One-Final


Toyota plan

Birkle

2003

1,120

1,354

1,245

121%

92%

111%

NORMAL YEAR

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = Normal trend

Green= lower than normal

Yellow = higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC*

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC*)

Sep Special Version.

2004

1,102

1,244

1,221

111%

98%

113%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

*FMC – Full Model Change

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = normal trend

Green = lower than normal

Yellow = higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC)

Weak 3Q trend due to

Run-out.

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

98%

111%

113%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = normal trend

Green = lower than normal

Yellow =higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC)

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Strong 1st Q volume thanks to FMC in Oct 1998 impacted trend.

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = normal trend

Green = lower than normal

Yellow =higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Strong 3Q trend thanks toSpecial Version.

Oct FMC

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC)

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = normal trend

Green = lower than normal

Yellow =higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC)

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

Strong trend in 2Q thanks to Campaign but…..

Day One-Final


Toyota plan

Birkle

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = normal trend

Green = lower than normal

Yellow =higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC)

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

…trend is back to normal after finalizing campaign.

Day One-Final


Toyota plan

Birkle

<Conclusion>

2005 2Q shows high trend irregularity

but 1Q and 3Q shows same trend as

2003 which does not have special event.

4Q can be forecasted using the

trend of 2003 based on 1Q/3Q result.

Sales Forecast

Review Sales result and evaluate the trend

Trend Value method (Example) White = normal trend

Green = lower than normal

Yellow =higher than normal

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

2002

1,356

1,464

1,298

108%

89%

96%

(1Q Just After FMC)

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

2005

929

1,220

1,045

131%

86%

112%

Day One-Final


Toyota plan

Birkle

Sales Forecast

Forecast future trend based on evaluation

1Q

3Q

4Q

3Q<-4Q

1Q<-4Q

NOTE

2000

925

808

87%

75%

Weak Market

1,080

Oct FMC

2001

680

1,856

273%

217%

857

2002

1,298

1,193

92%

88%

(1Q Just After FMC)

1,356

2003

NORMAL YEAR

1,120

1,245

1,165

94%

104%

2004

1,197

98%

109%

Sep Special Version.

1,102

1,221

2005

Apr-Jun Campaign

929

1,045

<4Q forecast>

1,045 X 94% = 982 929 X 104% = 966

Day One-Final


Toyota plan

Birkle

38.3

34.1

27.6

Sales Forecast

Oct Nov Dec

960 --- 368 327 265

980 --- 375 334 271

Monthly Split

Oct

Nov

Dec

NOTE

%

Weak Market

2000

37.4

34.5

28.1

Oct FMC

2001

11.5

48.6

39.9

2002

39.2

33.5

27.3

2003

38.3

34.2

27.5

Sep Special Version.

2004

41.2

34.2

24.6

Average of 00 / 02 / 03

Apr-Jun Campaign

Day One-Final


Toyota plan

Birkle

Sales Forecast

Evaluating Impact of Oct FMC

1Q

3Q

4Q

3Q<-4Q

1Q<-4Q

NOTE

2000

1,080

925

808

87%

75%

Weak Market

2001

Oct FMC

857

680

1,856

273%

217%

2002

1,356

1,298

1,193

(1Q Just After FMC)

92%

88%

2003

NORMAL YEAR

1,120

1,245

1,165

94%

104%

Sep Special Version.

2004

1,102

1,221

1,197

98%

109%

2005

929

1,045

Apr-Jun Campaign

Day One-Final


Toyota plan

Birkle

Sales Forecast

Estimated Impact of FMC is290% (273/94)

209% (217/104)

Evaluation of Impact :

1Q

3Q

4Q

3Q<-4Q

1Q<-4Q

NOTE

Weak Market

1997

2000

1,080

925

808

87%

75%

Oct FMC

1998

2001

857

680

1,856

273%

217%

2002

1,356

1,298

1,193

(1Q Just After FMC)

92%

88%

2003

NORMAL YEAR

1,120

1,245

1,165

94%

104%

Sep Special Version.

2001

2004

1,102

1,221

1,197

98%

109%

2002

929

1,045

Apr-Jun Campaign

2005

Day One-Final


Toyota plan

Birkle

Sales Forecast

What is the estmated impact of

this spring campaign?

Evaluation of Impact

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

(1Q Just After FMC)

2002

1,356

1,464

1,298

108%

89%

96%

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

929

1,220

1,045

131%

86%

112%

2005

Day One-Final


Toyota plan

Birkle

Sales Forecast

Impact of Campaign is estimated at 8%(131% / 121%)

Evaluation of Impact

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

Weak Market

2000

1,080

1,170

925

108%

79%

86%

Oct FMC

2001

857

1,022

680

119%

67%

79%

(1Q Just After FMC)

2002

1,356

1,464

1,298

108%

89%

96%

2003

NORMAL YEAR

1,120

1,354

1,245

121%

92%

111%

Sep Special Version.

2004

1,102

1,244

1,221

113%

98%

111%

Apr-Jun Campaign

929

1,220

1,045

131%

86%

112%

2005

Day One-Final


Sales Forecast plan

Evaluation of Impact :

If we expect similar campaign or FMC

(Full Model Change) in future, these %

can be used as benchmark of impact.

Day One-Final


Trend Value Method plan– Exercise 3

Based on Quarterly Sales Results

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

2000

1404

1492

1343

2001

884

910

1328

2002

1114

1296

1220

2003

1610

1489

1232

2004

1047

1024

1110

2005

1342

1428

1255

Day One-Final


Trend Value Method plan– Exercise 3

Based on Quarterly Sales Results

1Q

2Q

3Q

1Q<-2Q

2Q<-3Q

1Q<-3Q

NOTE

2000

1404

1492

1343

106%

90%

96%

May Event

2001

884

910

1328

103%

146%

150%

2002

1114

1296

1220

116%

94%

110%

Feb Special

Version

2003

1610

1489

1232

92%

83%

77%

2004

1047

1024

1110

98%

108%

106%

2005

1342

1428

1255

106%

88%

94%

Oct FMC*

*FMC – Full Model Change

PLEASE REFER TO YOUR BINDERS – EXERCISE SECTION

Day One-Final


Trend Value Method plan– Exercise 3

Based on Quarterly Sales Results

1Q

2Q

3Q

4Q

Q< Q

Q< Q

NOTE

May Event

2000

1404

1492

1343

1530

2001

884

910

1328

1403

2002

1114

1296

1220

1368

Feb Special

Version

2003

1610

1489

1232

1298

2004

1047

1024

1110

1386

2005

1342

1428

1255

Oct FMC*

*FMC – Full Model Change

PLEASE REFER TO YOUR BINDERS – EXERCISE SECTION

Day One-Final


Trend Value Method plan– Exercise 3

Based on Quarterly Sales Results

OCT NOV DEC

Monthly Split

Oct

Nov

Dec

NOTE

%

2000

37.4

34.5

28.1

2001

11.5

48.6

39.9

2002

39.2

33.5

27.3

2003

38.3

34.2

27.5

2004

41.2

34.2

24.6

Average of

PLEASE REFER TO YOUR BINDERS – EXERCISE SECTION

Day One-Final


Group Discussion plan

Day One-Final


Questions? plan

Day One-Final


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