A regular scenario from Sales to Supply Chain is that they need to over-forecast sales in order to achieve their Sales Targets, since Supply Chain does not deliver a 100% Case Fill Rate. In this way, over-forecasting is believed to “force” Supply Chain to meet their commercial targets. How do you address this?

772 viewscircle icon2 Upvotescircle icon2 Comments
Sort by:
Supply Chain Professional in Consumer Goods3 days ago

This is a usual issue between sales & supply chain. 

To address this issue, you need to initiate an S&OP process first, then S&OE, and after that you'd have the key KPIs run every week and month to measure essential perfomance such as, forecasting accuracy, forecasting bias, and customer service (case fill rate in this case). 

Further, you can adopt what's called a Forecast Value Added measure, which is a measure that compare each forecast you have (sales forecast, statisitcal forecast, .. etc) vs the actual orders, so that you see which forecast was more accurate than the other and, as a result, which forecast is adding more value to your overall demand plan. 

Finally, you'd use these KPIs in your monthly S&OP meeting to healthy challenge the sales peers about these KPIs, so that you control the supply side much more efficiently.

VP Global Supply Chain in Consumer Goods22 days ago

Design an S&OE process that includes a deal pipeline, use a run rate average for consistency, add safety stock for a buffer and use a kanban inventory system with the supplier (so you have an option of pulling in material if needed, and have LLT material on hand).

Lightbulb on1

Content you might like

Inevitable4%

Highly likely14%

Somewhat likely16%

Somewhat unlikely18%

Very unlikely43%

Impossible4%

View Results