Demand Planning & Forecasting

The Business Planning / Budgeting Process
Review of the current situation
Root cause analysis of the different issues and metrics
How will the current year be finished
Plans for the next year / coming periods

The Sales Forecasting Process
Risk / Uncertainity Management
Truisms about Forecasting

Qualitative Modelling
For new products, new geographies – no historical information
Executive opinions
Delphi technique
Sales force polling
Consumer surveys

Quantitative Modelling
Historical Data Forecasts
Naive methods
Moving average
Exponential smoothing
Trend analysis
Decomposition of time series
Causal Forecast Methods
Simple regression
Multiple regression
Econometric modeling

Sales and Marketing Plan
Product lifecycle for each product
Growth Plans over the organic growth
Ansoff’s Matrix
Various marketing initiatives based on the 4 P’

The Toyota Model
Concept of elimination of wastage – Toyota concept

Location Planning
Various factors like govt incentives, availability of resources
Break-Even Analysis
Weighted score of the factors
Centre of Gravity Transportation cost

Manufacturing Layout Planning
Product / Line, Fixed Location, Process, Cell manufacturing.

Manufacturing Planning
Multi-Plant / Multi-Location / Multi-Product Planning
Aggregate Planning based on capacities, setup time, downtime etc.
Seasonality factor
Inventory buildup, Key parameters like inventory turns, near expiry products etc.
Production scheduling on a short term basis

Warehouse Planning
Layout planning - size of pallettes, number of bays, space between them
Various areas for inbound materials, QC checking, storage, outbound items etc.
Special storage conditions like cold storage for expiry sensitive items etc.
Agreements to rent additional space, if needed

Procurement Planning
Inventory availability for manufacture – BOM. MRP
Concept of JIT
Activity depends on the manufacturing plans since there are lead times for materials
Order Quantities
Capacities of suppliers needs to be assessed.
Multiple Vendor Development / Management 

Logistics Planning
Number of vehicles required
Own vehicles / rented / leased
Size of vehicles
Personnel requirement

Final Sales Budget
Joint agreement between all departments
It is the minimum that can be achieved by any of the departments

Sales and Operations Planning
Achieving the overall yearly target through monthly planning
Rolling forecasts based on changed circumstances
Setting the expectations for the short term to achieve the long term

Selling Process
Sales Forecast has a direct bearing on each one of these
Various methods of selling
Direct selling (Route selling)
Tel-Sell / Pre-Sell
Retail Sale
Bulk sale
Vendor Managed Inventory
Various channels of selling
Direct customers (Physical location / Online)
Big customers, medium customers, small customers
Various products
Various geographies
For direct selling to analyse the forecast by each customer
Management of AR

Selling Location Replenishment
Push v/s Pull strategy
Automatic “internal” orders creation
Order tracking from supply points
Forecasted ETA v/s actual arrival

Human Resources Planning
All personnel / admin requirements
Re-skilling of existing staff
Recruitment process, On-boarding / training of personnel as per requirements

Financial Planning
Financial analysis of all requirements for the future forecasts
Preparation of forecasted and actual P&L, BS and Cashflow statements including rolling forecasts
Forecast of factors like Interest Rates, Exchange Rates etc.
Hedging mechanisms, Banking transactions
Preparation of agreed Financial KPI’s to track the actual v/s forecasted

Information Technology
Various technology initiatives to achieve the forecasted figures
Making the operations as effective and efficient as possible