Why Some Demand Plans "Burst" into Wildfires in Your Location Channels

Sometimes in retail, we feel like all we are doing is putting out fires. Little things pop up every day that are urgent but maybe not all that important. This store is out of that, this vendor short shipped something else, and your boss’s boss wants to know why sales were down in this class. We get bogged down in this week’s problems so much so that we forget to prevent next month’s or next season’s fires. Your time should be spent on seasonal planning, demand forecasting, vendor collaboration, and other proactive activities. When do you take off your fireman’s hat and let the small fire burn for the greater good?

Many of you may be familiar with the Eisenhower Decision Matrix. Attributed to President Dwight D. Eisenhower, this matrix helps you prioritize tasks by judging whether they are urgent or important. It looks like this:

Important & Urgent	Important & Not Urgent
Not Important & Urgent	Not Important & Not Urgent

The key to using this matrix is to realize that what is urgent is usually not important and what is important is rarely urgent. By focusing on what is urgent, we forget about what is important and we turn into firefighters. Smokey the Bear would want you to live in the Important & Not Urgent section (fire prevention). If you take care of the important things before they become urgent, you can stop being reactive and start being proactive.

So how do you prevent fires in your retail business?

Demand forecasting instead of sales forecasting – Don’t just look at what you sold last year and be satisfied with adding a percent increase. You need to plan for lost sales, promotional sales, calendar changes, and market trends to reduce the chances of fire drills. Don’t repeat last year’s mistakes.
Measure Forecast Accuracy – Your demand forecast influences the timing and amount of your orders. A bad demand forecast is like an ember waiting for a good breeze. It will have negative effects on your orders, your in-stocks, your open to buy, and more, growing into a greedy blaze before you know it. Prioritizing demand forecast accuracy will prevent all kinds of fires.
Lead Time Forecasting – Don’t take chances with quoted lead times. Even the best laid plans often go awry. Help yourself, and your vendors, to some fire prevention with lead time forecasting. (Check out our Lead Time Forecasting Slide Share for more info)
Exception management – Use tools to help you filter thru the piles of information and define what is important to you. The best part of the Eisenhower Matrix is that you are supposed to delegate. Let technology take the lead on the Not Important and only show you the Important.

What’s important to you? Let us help you find it! Our iKIS™ demand forecasting and supply chain solution has robust exception management and collaboration tools to help you and your team ditch the firefighter equipment for good. Contact us today to Tighten the Links in Your Chain™.

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Stuart D

Stuart Dunkin is a strategic visionary who leads by calling on his broad range of experience as a former retail executive as well as a consultant for top retailers and for the E3/JDA software company. He founded Data Profits to solve a real-world problem plaguing retailers today – the disjointed relationship between supply chain data, people and business goals. He has experienced first-hand the challenges and frustrations that occur when decisions are made based on wrong data, which often leads to the wrong actions being taken with crippling results like overstock, out-of-stock, and increased working capital.
Stuart graduated from Auburn University, with bachelor of science in business administration.