Forecasting
Forecasting
- Update forecasts based on early sales data
- Track and predict forecasts accuracy
- Get the product testing right
- Use a variety of forecasting approaches
THANK YOU!
by Edmund Schäfer & Tabea Tripke
The System at the Core
Most retailers realize that
- inventory levels should be reduced toward the end of a product’s life cycle
- forecasts should be updated
But most inventory-planning tools are inappropriate
- for products with short life cycles
- for life cycles which are measured in months
Every decade a retailer innovates so
powerfully that it rewrites the rules for other retailers and for all companies in the supply chain
The next retail innovator will be the one that best combines consumer data with the ability to turn that information into action!
Marriage of art and science
Supply Chain - Speed
- Critical component for products with short life cycle
- Can reduce the the likelihood of selling out of hot items
Right-brainers
intuition types
rely on premonition
Left-brainers
technical types
rely on information
How to achieve short response time?
- No finished goods at inventory
- Troubleshoot production problems
- Employees are able to make decisions on their own
Rocket Science Retailing Is Almost Here
- Right-brained planner looks at sales data
- Left-brained buyer looks beyond numbers and identifies sales patterns
Right product
in the right place
at the right time
for the right price!
Inventory Planning
- Deciding when and how much to order
- How much to produce, of various raw materials, components, and finished goods
- Most retailers dont' track stockouts and lost sales
Available Data
How to know how much of a product would have been sold if supply had been plentiful?
1. Calculate demand rate for a product that has been on stock
2. Combine the estimated demand rate with the duration of stockout
Costs, Customer Satisfaction and Morale
- Retailers vary in their ability to store and access their sales data
- Data contains information about sales patterns
- seasonality
- consumer reaction to a promotion
- differences in sales patterns at different stores
It is important to not just deal with metrics, but also with the variables that drive those measures. Visible and accurate tracking of:
- products and market segments that tend to have inaccurate forecasts
- forecast accuracy change over time
- customer satisfaction
- employee morale
Rocket Science Retailing
Accurate Data
- Considerable difficulties of capturing and maintaining accurate sales data
- Reasons are
- Improper handling of returns
- Huge volume and similar goods
- not yet open shops
Zero Balance Walk
Each day, one employee walks trough the store looking for SKU that are out of stock
For each item that is out of stock, a stockout card is generated and a sticker is placed on the shelve
by Marshall L. Fisher, Ananth Raman,
and Anna Sheen McClelland