Elephant in the Room: Thoughts on Metrics That Matter in Semiconductor and Hard Disk Drives


Supply Chain Insights recently published a Metrics That Matter report covering both the Semiconductor and Hard Disk Drive (HDD) industries. Semiconductor is poised to consolidate, which will have huge impact on the metrics. The ‘bullwhip effect’ certainly plays a role here, creating wide fluctuations (over and under) of supply and demand – due to disorganization, lack of communication or miscommunication, incorrect demand information, etc. by CJ Wehlage.

Ann Grackin: Is the Crisis in Demand Management Being Exacerbated by Spreadsheet Dependency?


Demand management has always been at the top of supply chain professionals’ list of challenges. All these moves have added complexity to the demand planning challenge. Against this backdrop, it is interesting that many companies still depend on spreadsheets for demand planning and S&OP , as noted in the recent survey by APICS ( see Are Spreadsheets the Answer , SC Digest, September 2013 ).

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Insight from Applied Statisticians for Forecasting: Is It Worth the Effort and the Mirage of Random Variation


In this blog, we will illustrate through an example of these potential pitfalls (unanchored, random variation, and narrow metrics) and potential negative impact on a firm.

Supply Chain Metrics: Make Sure They Are Aligned with Your Strategy!

Supply Chain View from the Field

Many people are talking about Key Performance Indicators, Metrics, Analytics, and other indicators of performance. The importance of selecting the right metrics or “measures” as I prefer to call them, is critical as we all know that metrics drive behaviors. Rather then selecting a plethora of meaningless metrics, it is always better to focus on a critical few, and select them wisely. Step 2 – Develop Metrics and Data Sources.

What About Them Apples?

Supply Chain Shaman

In offices across the United Sates, demand planners are scratching their heads. Shifting demand and rising prices for cotton and orange juice. Surprising demand in automotive for car replacement. History is not a good predictor of current demand. Sensing of markets and the translation of channel demand into an accurate demand signal for the company is the foundational principle of market-driven processes. Today’s demand processes are inside-out.

What If You Could Take The Guesswork Out Of Forecast Planning? Guest Post from Osgood Vogler


The author, Osgood Vogler, Director, Analytics, Celestica Supply Chain Managed Services, describes an insight-based demand management process: So, how do you take the guesswork out of forecast planning? Demand planning has a big impact on business performance. In fact, it is common for supply chain management executives to cite “planning errors” as the greatest obstacle they face to achieving their goals and objectives. How predictable is the demand?

What the Analysts Are Saying About…A&D Supply Chains


Even if you’re not you should check out Supply Chain Insights, Supply Chain Metrics That Matter. I spread my Supply Chain wings at an Aerospace company and since Aerospace and Defense is a key vertical market for Kinaxis, the recent Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report was downloaded on my laptop to read on my next flight. by Bill DuBois. Are you looking for some reading material to pass the time on your next flight?

Your supply chain is costing you money – Reason #3 Not having end-to-end supply chain visibility


You cannot look at aggregated data without running specialized reports or extracting the data and loading it into a BI tool.Visibility also means understanding the impact of your decisions on key corporate metrics. Demand management General News Supply chain management Business Business intelligence Enterprise resource planning (ERP) ERP Friday Lead time Manufacturing Sales and operations planning Supply chain by John Westerveld.

A River Runs Through It…

Supply Chain Shaman

It is the river of “demand.” While most companies attempt to shape demand–through promotions, new product launch, pricing, sales incentives and marketing–they confuse demand shaping with demand shifting. Shifting demand increases cost and complexity while shaping demand increases market share or baseline forecast demand for the product. Demand for products/services is not unlimited. A Focus on Demand Flows.

5 Considerations When Evaluating your ERP system’s Forecasting Capabilities

The Smart Software

Consider what is meant by “demand management”, “demand planning”, and “forecasting”. These terms imply certain standard functionality for collaboration, statistical analysis, and reporting to support a professional demand planning process. However, in most ERP systems, “demand management” running MRP and reconciling demand and supply for the purpose of placing orders.

10 Best Inventory Book for All Experience Levels

Supply Chain Opz

Inventory Management Overview Many people think inventory management is a clerical task but they're absolutely wrong. Citation count is a metric we use to separate great inventory book from their peers - Lastly, we carefully review each inventory book and make a final cut Results Drum roll please! Clive (Material Management) 5) RFID For Dummies by Patrick J. What inventory book can help you to cut inventory costs?

How Can You Seize Opportunity If You Cannot Manage Risk?

Supply Chain Shaman

Public markets reward growth; and as year-over-year revenues slow, companies attempt to grow using tactics like new product launch, price incentives and trade promotion management. In the digital world, traditional broad-brush marketing programs become less effective, but have residual effects on the supply chain of higher demand error and increased complexity. Companies with the lower score on the Index are driving faster rates of metrics improvement.

The Fight of the Titans

Supply Chain Shaman

The field of supply chain management–combining source, make and deliver–into a common process started in 1982. Figure 1: Supply Chain Metrics Are a Balancing Act. The metrics shown in Figure 1 are difficult to improve together. Most companies improve singular metrics but are not able to drive portfolio. An orbit chart is the linking of data across years at the intersection of two metrics.

Supply Chain Diagnostic: A Four-Step Process

Supply Chain Shaman

In Figure 1, we show the aggregate trend of the chemical industry in an orbit chart format showing year-over-year results at the intersection of two metrics operating margin and inventory turns. I am often asked to benchmark demand. Profile volume segments by coefficient of variation by demand flow. Divide the analysis into categories: High volume, very predictable demand. Medium volume products, predictable demand. Medium volume, inconsistent demand.

Help Supply Chain Planners Be More Successful In These Uncertain Times

Supply Chain Shaman

The order is a poor proxy for demand and few supply chains have access to consumption data. With the downturn in the financial markets, the looming recession, and the fundamental shifts in demand—less travel and stay at home work policies—demand is changing. Demand latency is the translation of market consumption to an order signal. Supply chain management, as a cross-functional process, to align source, make and deliver processes, evolved in 1982.

Defining and Implementing an Effective Transportation Strategy

Talking Logistics

In the first episode of this educational series focused on the link between transportation management and supply chain excellence, Chris Timmer of LeanLogistics (a Talking Logistics sponsor) outlined the attributes of a strong transportation management foundation and how to build it. Key questions include, what is the variability of your demand and supply? How predictable is your demand and supply?

How Do I Know If I Am Ready?

Supply Chain Shaman

Especially demand sensing and shaping?” ” A Demand Planner for a Large Multinational Pharmaceutical Company. I also continued to work on the manuscript for the book Metrics That Matter to publish in the fall of 2014. Especially demand sensing?” So, I am going to focus here and share my answer: Demand sensing is the application of analytic technologies to detect short-term patterns in channel data and translate it into distribution requirements.

After your product ships (Part 1): Data retailers share and why it’s important


But out of that weekly or daily data deluge, what are the crucial metrics? This metric is the best indicator of true demand because it measures when an end consumer actually buys a product, not just when a retailer places an orders, or sell-in. With that important distinction in mind, Net Unit Sales is what all brands should be using to measure performance, forecast demand, manage replenishment, and many other day-to-day sales and supply chain execution activities.

Will the Downturn Signal an Upturn?

Supply Chain Shaman

Demand redefined. As the markets plummet, it is time to remind ourselves that demand is not a forecast. The supply chain needs to respond to market demand and consumer sentiment. Shifts in market demand and the response to volatility define winners and losers. Demand processes are evolving. Smiling, I shared insights on the data available in the market to sense true market demand and the principles of the bullwhip effect as shown in Figure 1. Volatility.

Making Cents Out of Demand Sensing


This is especially true for those that work in and manage the demand planning process. Sometimes demand planners focus too much on forecast accuracy and miss seeing the forest for the trees. I was guilty of this from time to time when I led a demand-planning group because we were evaluated on forecast accuracy as one of our key metrics. Here in lays the crux of the issue with demand sensing. This sounds a lot like the definition for demand planning to me.

Good People Can Make A Difference In Outcomes

Supply Chain Shaman

Based on a research study, the management team decided that Marriott would no longer have room service. Each day, I also wrote a personal letter to Marriott management on their corporate site telling the story of a Marriott Platinum member sick on the 20 th floor of the Marriott Marquis trying to get a bowl of chicken soup. Here are some insights from my work week: Too Few Understand Demand Planning. Together, We Need to Manage Hype Cycles.

Adventures in Forecasting in the Supply Chain

Supply Chain Opz

One of the principle aims of supply chain management is managing uncertainty. And no function is more at the forefront of that endeavor than demand forecasting. The challenge of effective supply chain management is to deliver on ever-increasing customer demands for excellent service while simultaneously managing costs. Given that demand can change every day, forecasting becomes the ultimate adventure.

A Toast to the Shaman

Supply Chain Shaman

The most popular posts are on demand management and Supply Chain Metrics that Matter. The focus of this conference will be the evolution of Supply Chain Metrics that Matter and the launch of the Supply Chain Index (a formulaic representation of supply chain excellence by peer group). The event will be made available to the wider population through a videocast during the event, and we will publish an ebook on the evolution of Supply Chain Metrics that Matter.

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Speed up your eCommerce Business with Inventory Management Software


Inventory management plays a vital role in building a sustainable, scalable and profitable eCommerce business. No matter how expert you are, how bigger or smaller your business may be, what products you sell, or who do you serve, lack in your inventory management can bring bigger challenges in your business success. Thus, inventory Management Software is really an essential tool for your business to gear itself up. What is Inventory Management System?

Decline In Performance in Consumer Products. Are You To Blame?

Supply Chain Shaman

Marketing invests in new product launch and traditional demand shaping programs. New products and demand shaping programs increase complexity and demand variability. Over the years, the supply chain capabilities increase for high volume and very predictable products, but not for the shift in product mix for higher demand variability. The only companies bucking this trend are managing the supply chain as a capability. Management of Complexity.

My Take: E2open Buys Terra Technology

Supply Chain Shaman

The product naming convention changed to Demand Sensing (DS) in 2005. Over the last decade the use of Terra Technology’s DS product improved short-term demand forecasts by 37% at 13 consumer products, and food and beverage companies. In 2007-2014 Terra added inventory management, multi-tier demand sensing, transportation forecasting, and long-term forecasting. This is an opportunity to define true demand-driven network capabilities.

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No Easter Bunny?

Supply Chain Shaman

Designed to make the traditional supply chain more efficient, today’s IT investments struggle to balance demand and supply, and drive profitability. In the digital transformation these traditional applications manage low-velocity transactional data. Is it the use of sentiment data in combination with demand sensing pattern recognition to redefine demand? Traditional demand planning uses great statistical modeling to predict the future using order patterns.

Reduce Lead Time in Your Global Supply Chain with Lean Thinking

Material Handling & Logistics

Many companies try to overcome this problem using ERP systems, demand management tools and other advanced software. The future state map will also define improvement metrics and set clear improvement targets for those metrics. This will include things such as the process for ordering and shipment, inventory, obsolescence, mutual accountabilities and key supply chain metrics (including lead time). Leveling your demand.

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Beyond Spend Analytics: Supplier Life Cycle Data

Supply Chain View from the Field

The scope of the datasets his team was working on was limited to supply management, but the sheer volume of data was staggering in its complexity and fragmentation. And an active supplier will also start sending you things – but are they doing it on time, and what are the metrics with the delivery of the contracted product or service. But does the invoice manage the contract – and who is checking that?

The DNA of a Digital Supply Chain

Aera Technology

Today, we tend to manage and optimize businesses in silos. Having a set of standardized metrics that are accurate and in real-time can deliver tangible benefits across entire organizations in terms of inventory reduction, service level improvement and agility. Today we’re launching three new Cognitive Skills — Cognitive Demand Management, Cognitive Manufacturing Performance and Supply Chain 360 — that will power our customers’ transformation journey.

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Supply Chain Case Study: the Executive's Guide

Supply Chain Opz

Professionals in supply chain management use various methods to identify best practices to improve the operations. Analysis of case study is certainly one of the most popular methods for people from business management background. In order to cope with changing customers'' demand, they decide to undertake Mass Customization strategy. The nature of this industry is the short product life cycle, low profit margin, high competition and demand fluctuation.

The Pressure is Rising for CPG Companies to Improve Order Delivery Performance

Aera Technology

Manufacturers are facing SKU proliferation to go to new markets and to answer consumer demand for more personalized products. Demand forecasting miscalculations, raw materials and finished goods inventory shortages, manufacturing interruptions and transportation delays are among the many factors that can conspire to send OTIF into a tailspin. Supply chain managers are able to make faster, more informed decisions to correct a problem before it cascades into a disaster.

A Five-Step Approach to Effective Demand Planning Implementation


Good handling of market demand data is one of the most vital concepts in any supply chain. The correct management of demand information can greatly influence the level of integration and responsiveness, and has a direct impact on customer service and inventory levels. But how to create powerful demand planning implementation? Start with a demand analysis. Strive for a collaborative demand planning implementation process. Invest in performance management.

Analytics and S&OP: What is Analytics, and how to spot Buzzwords


To learn more, please read my previous blog ‘ A Guide to Supply Chain Management: Making Intuition More Valuable ’. Middle aged: areas such as dashboard, business intelligence, and drill down (Keen 1976, “ Interactive Computer Systems for Managers: A Modest Proposal “, Sloan Management Review, MIT, Vol. We might use “availability in Excel directly or with Add-ons” as an “age metric’.). Demand Management. Identify latent demand opportunities.