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Procurement and supply chain management are often used interchangeably—but in practice, the lines between them can blur in ways that create real friction. Misaligned priorities, siloed systems, and unclear ownership can directly impact key performance indicators like cost savings percentage and procurement cycle time.
Machine learning (ML)a specialized field within artificial intelligence (AI)is revolutionizing demandplanning and supply chain management. According to McKinsey , organizations implementing AI-driven demand forecasting solutions can reduce forecast errors by 30% to 50%.
In follow-up qualitative interviews, one of the largest issues with organizational alignment was metric definition and a clear definition of supply chain excellence. In my post Mea Culpa, I reference my work with the Gartner Supply Chain Hierarchy of Metrics. Error is error, but is it the most important metric? My answer is no.
Good forecasting leads to good demandplanning —and good demandplanning means better profitability. That’s why it’s essential to be sure you’re equipping your organization with the right demandplanningsoftware. To find the best solution for your business, you need the “what” and the “why”.
The Failure of Existing DemandPlanningSolutions. During the pandemic, supply chain leaders turned off their demandplanningsolutions. Also, the solutions lacked flexibility. No company interviewed was able to successfully use their current what-if solutions to model pandemic impacts.
Understanding how your Procurement and Supply Chain KPIs are performing isn’t just a nice-to-have; it’s essential for survival and growth. But what if you could get a clear, birds-eye view of your core performance without investing in complex, expensive software? Why You Need Visibility of Supply Chain and Procurement KPIs?
When it comes to implementing supply chain planning and operations solutions, success relies heavily upon an organization’s ability to identify and document its desired value measures and outcomes, and to align those with its solutions provider. 1 Co-develop a business case with vendors. 3 Align on goals and KPIs.
Lower-income consumers and those using food assistance programs care the most about food waste as a purchase driver—again, suggesting it is a response to higher prices.” The same “If” statement was repeated for a host of financial and operational metrics.
Businesses often use it in retail and purchasing. Category management isn’t just another procurement trend. It’s a way for companies to group similar goods or services (like IT infrastructure, facilities, or raw materials) and manage them holistically instead of handling every purchase in isolation.
Depending on the nature of your business, your trading partners or your location, this could include procurement strategies, demandplanning, logistics, and global trade management among others. Mastering Direct Spend Management Procurement teams generally do not report to the chief supply chain officer.
The increasing need for constantly analyzing these trade-offs across the supply chain networks has highlighted the need for digital twins and what-if capabilities in network design solutions. This means they are more likely to focus on value and affordability and change their priorities and brand preferences when making purchases.
ABC Analysis for Inventory Planning : Clustering products that behave similarly highlights issues, challenges, and opportunities for serving customers better. ABC analysis creates product segments by grouping products with similar sales volume or purchase frequency to enable category managers to focus on what matters most. and Europe.
Stakeholders who care about forecasting in demandplanning care about accuracy, and usually will not accept a new forecasting method unless it is rigorously validated against known forecasting benchmarks with proven accuracy. In this way, forecast accuracy trends can be leveraged in adjusting demandplanning.
Procurement has never played such an important role in the increasingly globalised economy. Has procurement fundamentally changed itself in the past 10 years? Strategic Procurement can mean totally different things in different industries and sectors. The time when Procurement was almost a synonym to Purchasing has long gone.
I had worked hard to teach the team presenting to talk the language of demand , but it was not understood at the board-room level. The group is cross-functional and serves the business by mining demand insights, sensing market patterns based on channel data, and recommends demand shaping programs based on analysis of revenue management.
Digital commerce efficiently requires the digitalization of many customer-facing operations and sourcing and procurement. For businesses of all sizes, the digital transformation of supply chain planning became the most important initiative. . Planning platforms can pull data from multiple internal and external data sources.
It has matured as new algorithms and techniques were introduced that took into account lost sales, seasonality, lumpy demand, promotions, etc. DemandPlanning. A multi-step operational supply chain planning process used to create reliable forecasts. Demandplanning improves on demand forecasting in two key ways.
When making discretionary purchases, I could look at my projection to make sure that if I made that purchase, I would have enough money in the bank, not only now, but at the end of the month when my mortgage and car loan came out. You create a new scenario within the tool and modify the forecast for the time period of the promotion.
This means we need more agile, flexible, and scalable planning platforms to process and consolidate new data sources, drive insights using advanced analytics such as AI/ML to drive autonomous decisions, and expand collaboration within and outside our organizations. Step 4 – Closing the Loop and Getting Real-time Visibility. and Europe.
Supplier scorecards are globally accepted as a key tool for managing a more profitable supply chain. A good scorecard helps identify which vendors deliver the best value, explains the drivers of performance, and is a preferred collaboration tool for improving supplier relationships. Consider using software to automate data integration.
For Greater Product Performance Visibility and Improved Sales & DemandPlanning Consumer Packaged Goods (CPG) manufacturers operate in an increasingly competitive environment, where the ability to access and analyze timely, accurate data can make or break a company’s success.
However, two decades later, there is still no technology solution to enable demand visibility or help companies use channel data to translate demand into an inventory, replenishment, or manufacturing strategy. End-to-End Definition Implementation of enterprise data architectures to improve order-to-cash and procure-to-pay.
Leveraging advanced analytics : You can use analytics to identify top-performing suppliers as well as address any issues based on supplier performance metrics. Seeing past Tier 1 can be challenging for many companies, even with the most advanced planning platforms. Integration is another challenge.
The regulation is designed to provide European consumers with extensive data about the provenance of the items they purchase, all the way back to the sourcing of raw materials. The DPP “represents a significant advance in product transparency and sustainability,” according to an EU report published in September of 2024.
It is just not enough to do a software upgrade or slowly push continuous improvement projects. Shell operates as a single-instance of SAP Enterprise Resource Planning (ERP). Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. He needed to find new solutions.
Weve even included some examples of these KPIs using pre-built views for inventory reporting from our Stratum business intelligence solution. Available to Promise (ATP) Available to Promise (ATP) is a real-time inventory management metric that tells you how much of a product you can promise to customers without overcommitting.
For example, Infor purchased GT Nexus in 2015; OpenText purchased GXS in 2014, GHX purchased H-Card, LLC today; E2open purchased Terra Technology in May 2016 and Orchestro on Monday. Thoma Bravo purchased Elemica in June 2016. The solutions evolved from different funding models. The problems are many.
” At the other end of the continuum is the argument that “ Forecast error is the most important metric to improve.” I do believe in demandplanning, but most companies overstate forecast improvements. Many companies implemented demand management processes as a technology project. Everyone has a bias.
Accurate forecasts help minimize inventory, maximize production efficiency, streamline purchasing, optimize distribution, maximize customer service, ensure confidence in company financial projections. As you can imagine, automation and artificial intelligence driven processes are significantly changing the demandplanning process.
Efficient purchasing is conducive to healthy cash flow. The more effective your purchasing processes, the more profitable your business becomes. In this guide we explore the process of purchase order management, its role in a wider supply chain management strategy , and the best practices for optimised purchasing workflows.
The onset of COVID and the rapidly changing environment of a pandemic-hit world has meant demandplanning has become more difficult – and as a result, more critical – than ever. What is demandplanning? Demandplanning is the process of predicting what customer demand will be for a certain product.
It has matured as new algorithms and techniques were introduced that took into account lost sales, seasonality, lumpy demand, promotions, etc. DemandPlanning. A multi-step operational supply chain planning process used to create reliable forecasts. Demandplanning improves on demand forecasting in two key ways.
As shown in Figure 1, users are more satisfied, the implementations are shorter and there is greater Return on Investment of solutions from Best-of-Breed solution providers—especially if the best-of-breed solution providers used are industry-specific. The use of best-of-breed planning technologies was small at 15%.
Science Direct ) Predictive demand analytics gives retailers the visibility they need to proactively adjust planning, allocation and replenishment decisions based on when, where, and how much changes in the weather will influence purchasing. Proven Retailer ROI: The Business Case for a Comprehensive Retail PlanningSolution.
Surveys have shown that consumers are 71% more likely to make a purchase based on social media referrals, and 47% of millennials’ purchases are influenced by social media1. Examples are: customer experience metrics, feedback on new product features and pricing, customer satisfaction and loyalty, and competitive intelligence.
As I read the literature, I felt out of touch and old-fashioned. “How could I not know about supply chain planningsoftware?” On the plane to my interview, I read everything I could about planningsoftware and thought about the simple spreadsheet challenge that was the genesis of my journey. I was a skeptic.
Thriving In ‘The New Normal’ With 5 DemandPlanning & Forecasting Methods. Do you remember the time when the COVID-19 pandemic lockdowns were announced across the world, followed by the panic purchase of essentials to the point where supermarkets and grocery stores were left with empty shelves?
This is especially true for those that work in and manage the demandplanning process. Sometimes demand planners focus too much on forecast accuracy and miss seeing the forest for the trees. This sounds a lot like the definition for demandplanning to me. And now back to that crux.
Supply chain key performance indicators and metrics are ways in which someone can quantify the performance of their company’s supply chain to gain a better understanding of its strengths and weaknesses. Procurement Cost. Product Management KPIs! Get Our EBOOK HERE. Inventory Turnover (Cash). Cash to Cash Cycle Time (Cash).
Earlier in the day, demandplanning was a guessing game that relied more on intuition, instinct, and inclination. Companies that leveraged the data they collected to enable more accurate demandplanning, distinguished themselves from their competitors. Why do you Need Modern Demand Sensing to Solve Modern Problems?
Earlier in the day, demandplanning was a guessing game that relied more on intuition, instinct, and inclination. Companies that leveraged the data they collected to enable more accurate demandplanning, distinguished themselves from their competitors. Why do you need new-age demand sensing to solve modern problems?
They help minimize inventory, streamline purchasing, optimize distribution, and enhance production efficiency while ensuring the highest level of customer service. Forecast Value Add (FVA) FVA is a potent metric measuring whether the forecasting process adds value by improving accuracy.
Assortments are increasingly built to address customer need and ensure a pleasant customer experience — the product exists where the shopper wants to purchase it — but there is more to it than just providing a satisfying retail experience. Shifting focus from store metrics to satisfying customer need is only possible through shared data.
Learn how to: Keep your logistics on time and prepared Maintain your replenishment goals Properly forecast and redefine your demandplan Use technology to help. Shortages, extreme demand, and panic buying are causing issues up and down supply chains. A more conservative plan might see it ending at the end of the fourth quarter.
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