REanalyze This!: Forecasting

Showing posts with label Forecasting. Show all posts

Thursday, April 5, 2012

Rob Ende Guest Blogging at INFORMS Business Analytics Conference

I am very excited that I've been selected as a guest blogger for the INFORMS 2012 Conference on Business Analytics & Operations Research.

The conference takes place April 15-17 in Huntington Beach, CA, and is the leading venue where world-class organizations showcase the strategic use of business analytics and O.R.

The conference blog can be found here, and the blog will replace the conference home page once the conference begins. I will also mirror my posts right here on REanalyze This!

In addition to taking in some great presentations on the success of Business Analytics in areas such as Supply Chain and Forecasting, I will be co-facilitating a discussion group on best practices in spreadsheet modeling:

Garbage In, Gospel Out? Join Rob Ende, CEO of REanalyze Inc. and SPRIG President Rick Carter, CEO of Equation, in a discussion of tips and tricks on spreadsheet design, development and auditing to prevent errors, reduce risk and ensure quality results.

Please check back for conference updates starting April 15. Until next time...

Rob

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Rob Ende is Founder and President of REanalyze Inc., a Supply Chain, Inventory Management and Analytics consultancy based on Long Island, New York. Rob can be reached at 631-807-2339 or rende@reanalyzeinc.com.

Friday, December 2, 2011

In Supply Chain Planning, One Size Does Not Fit All

Supply Chain leaders recognize that their planning processes need to be tailored to the attributes or characteristics of specific items. However, many manufacturing and distribution companies still use"one-size-fits-all" approaches to Demand and Supply Planning. This often results in too much inventory on some items, and not enough inventory on others which can cause shortages and stock-outs.

A number of years ago, at Arrow Electronics, we implemented a Categorization approach that applied different forecasting and inventory policies to each item based on the item's demand characteristics, e.g., sales volume, variability of demand and risk profile (mainly, how much of the demand was concentrated with one or a few customers). This allowed planners to focus on the right items to ensure we had the right amount of inventory in the right place at the right time. It was a key element of an inventory strategy that improved inventory turns from 3.5 to 6 while improving customer service levels.

Ask yourself these questions:

Do you use the same forecasting process for all items? Or do you vary the process based on an item's demand characteristics such as volume, variability or risk? How about life-cycle stage, i.e., do you forecast new items differently from mature or end-of-life items?

Do you set your inventory targets or reorder points based on consistent rules-of-thumb, e.g., 30 days coverage ? Or do you set them based on each item's demand variability, lead time and variability of lead time?

Do you set lot sizes or MOQ's for production or purchasing based on "gut feel"? Or do you employ some sort of Economic Order Quantity or Total Cost of Ownership approach to minimize total supply chain costs?

For a good example of what I'm talking about, check out this video from SupplyChainBrain, featuring Tim Conrad of Gates Corporation. Gates implemented a process called "Plan for Every Part" or PFEP, which tailors Supply Chain and inventory strategies based on each item's unique DNA. Click here to watch the video.

How well does your company align its Supply Chain Planning processes with the unique characteristics of each item? Have you thought about the inventory, service and cost benefits of a more tailored approach?

Until next time…

Rob

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Rob Ende is Founder and President of REanalyze Inc., a Supply Chain, Inventory Management and Analytics consultancy based on Long Island, New York. Rob can be reached at 631-807-2339 or rende@reanalyzeinc.com.

Tuesday, November 8, 2011

Talking to Students About Supply Chain Careers

Last week I was invited to speak to the APICS student chapter at Farmingdale State College. It’s always great to talk to an audience of budding supply chain professionals, and I let them know they are entering a great field. Even in these challenging economic times, they have skills that are in demand and they have bright futures ahead of them. Manufacturing and Distribution companies hire a lot of supply chain talent – even in tough times.

As I typically do with an audience like this, I described my career journey in Supply Chain Management, Inventory Management and Analytics, peppered with some real-life examples. I also shared some lessons-learned for career-management. This is certainly not an exhaustive list, but a few things to remind yourself of periodically…

You have a long career ahead of you. Try different things. Do what you enjoy. Don’t chase money. If you do what you enjoy and are good at, the rewards will come.
Make an impact. Apply what you learn in school and on the job. Tie ideas back to a business case – how will you make the company more profitable?
Look out for #1. Don’t expect someone else to manage your career. Nobody cares about it more than you do. Keep developing and learning.

Nothing earth-shattering here, but it’s amazing how often people (myself included!) don’t consistently adhere to these relatively simple concepts.

I have posted the entire presentation at on the Resources page at REanalyzeinc.com - click here. It includes a bunch of project examples and some lessons-learned that are more functionally-oriented (as opposed to career-oriented).

What are your most important career-management lessons?

Until next time…

Rob

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