The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.

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January 02, 2009

Ownership of forecasting function

Organizations treat forecasting function differently based on their maturity levels; with a lagging organization having an ad-hoc approach to the entire process. There is hardly any focus on forecasting process and a dominant function decides the final numbers that also keeps changing and always remains a moving target. On the other hand, a mature supply chain organization would try to incorporate systems in place to ensure that forecasting as a process works fine and achieves the overall business objectives. I have seen and experienced that “right ownership” of this process is a very important and critical element to ensure that the forecasts are not biased and serves its desired purpose.

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January 01, 2009

Attribution Analysis in Supply Chain

Supply Chain function in most organizations is multi-faceted and requires management through a complex hierarchical organizational structure. At one end are Forecasters who manage the most upstream function and at the other end are executioners (production and procurement managers) who manage the most downstream function of supply chain. These functions have evolved over a period of time, found to be most optimal and is based on simple principle of segregation of duties.

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November 22, 2008

The Other Side of Supply Chain

Supply chains have been traditionally linear in nature. Let me explain what I mean by a linear chain.

Raw materials are procured from sources such as vendors, transformed into a sub-assembly and/or into a finished good again at  factory and transported to a distribution center or a warehouse. The number of echelons in the chain vary based on industry structure and resulting dynamics. Each echelon adds a finite value by either transforming the product into something more worthy of consumption or moving it closer to a consumer. This chain quickly became a network when organizations felt strongly about leveraging core-competencies of other organizations and developing one of their own.

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October 09, 2008

The Closed-loop Supply Chain Strategy

OK, what came first - the chicken or an egg? Well, for most it does not matter and as for others – they probably don’t care, though the question continues to draw quite an attention from many a curious mind. However, what’s interesting is that one cannot live without the other, and in fact one emanates from the other as a never ending inter-looping hierarchical chain. This chain is a logical chain and is also a genetic chain. The DNA of the chain keeps evolving getting refined and in many ways better as the right feedback gets factored into the chain. No wonder then the “chickens” of today are probably smarter than their predecessors.

 

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September 20, 2008

The Right Level for measuring the Right Forecast Errors

Many organizations have complex multi-level hierarchies for forecasting not only in the product dimension but also in geographical dimension. One of the standard practicies in most organizations is to do Bottom-up forecasting, followed by Middle-out forecasting and Top-down forecasting. The forecasting done at lower level of detail is very crucial since it determines the proportional factors for forecasts done at higher level. In other words, forecasts at lower level of detail helps come up with the right mix. Forecasting done at higher level helps come up with the right volume.

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September 16, 2008

Criteria in choosing the holistic Forecasting System

Forecasting has been rated as one of the top supply chain issues in the globalized world. Organizations are striving to predict customer demand as accurately as possible. Accurate forecasting kick-starts demand and supply chain planning. A large number of products-geography-customer combinations require system enabled forecasting capabilities. A holistic forecasting system brings in Statistical Rigour and Modeling, Dashboards and Simulation capabilities and automatically tunes its models to suit changing business requirements. Sharing here excerpts from one of our working paper – the criteria in choosing the holistic forecasting system.

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September 01, 2008

Caveats in a Forecasting System implementation project

Let me start with a clichéd statement - forecasting drives supply in your network. It sets the tone of supply chain planning. In many different contexts, we have heard about what different proponents of forecasting are saying- a one percent improvement in forecast accuracy saves sometimes millions of dollars in inventory and other short-term working capital requirements. Granted all this holds lot of water and consequently, we will probably have millions of dollars spent in forecasting and related consulting projects in coming years.

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Effectiveness of Planning

Accuracy of the supply and demand planning forecasts for direct sourcing and allocation is very important for an integrated and effective Supply Chain.We run into many scenarios when the forecast figures at a company level are either too conservative or inaccurate and that leads to lots of issues while planning for the downstream activities.One process consulting approach could be to slice and dice the historical data and present the output of the analysis to the planning team to adjust or if needed revamp the planning models and approach used.What can be the variety of approaches that can be used to streamline the planning processes in this scenario?