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Is your Demand Forecasting Ready for the Year of the Monkey?– 3 Things to Check

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Chinese New Year: Its Coming, Is Your Supply Chain Ready?

Chinese New Year starts on February 8, 2016. Most retailers are familiar with Chinese New Year because every year their Chinese suppliers and factories shut down for a few weeks. Chinese New Year is a huge celebration for China and many surrounding countries. Workers head home for a much deserved vacation that can last 4 weeks or more, leaving quiet offices and empty factories. That means nothing is shipping and that can result in empty shelves or managing the cost of overstocks- if your Inventory Replenishment software bought the right products.
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The Unseen Biggest Dangers of Lost Sales

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Lost Sales are just a KPI, Right?!?

Lost sales are a perpetual worry for all retailers. If your shelves are empty, customers go home empty-handed, and you won’t make your sales plan. Most replenishment systems and demand forecasting systems offer a lost sales calculation to help retailers manage this key business problem. But is your lost sales calculation actually helping you as much as you thought? Are you still watching sales slip through your fingers and wondering why?
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Demand Driven Do's and Don’ts: 3 Keys to Retail Success

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Demand Driven Supply Chain Don’ts

Demand Driven retail/ wholesale companies stay ahead of the competition by focusing on three key areas in their supply chain. In addition, demand driven retailers and wholesalers know you will resist change and stay focused on sales and gross margin, failing to allow GMROI to impact operating decisions. Demand driven retail / wholesale companies understand you and the competition stay focused on fast profits, growing sales and increased customer counts without reviewing the cost of acquiring those customers or learning why existing customers didn’t spend more due to out of stocks resulting from lost sales. Demand Driven retail / wholesale companies know the things to avoid by watching the competition’s mistakes. Resisting change and staying focused on old business concepts and numbers doesn’t work in the marketplace anymore.
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Great Sales Forecasting Equals Out of Stock

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Sales Forecasting is a measure of the market response; it is not a measure of market demand. The problem with sales forecasting is that simple; the most accurate sales forecast is only a measure of market response to what you had available. This is not accurate when considering future market demand. Issues with constrained supply, service levels, price and promotion are not analyzed correctly in Sales Forecasting. This is why sales forecasting is responsible for out of stocks and overstocks in many companies.
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LeadTime and Seasonality: Top 5 Replenishment Blogs of Summer

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Hottest Summer Topics of 2013: LeadTime and Seasonality

LeadTime, Lead Time Forecasting and Seasonality /Market Trends are the top interest blogs (stories) from Summer 2013. Based on the number of blog viewers and average time each viewer spent on each page, the following five blogs are 3-1 favorites from Summer 2013. These blogs indicate the key areas that companies want to improve going into the key fall sales season in 2013.

 

LeadTime and Lead Time Forecasting Do’s and Don’ts

LeadTime and Lead Time Forecasting (LT) are critical in the supply chain today. Tracking lead time variance and vendor fill rates may make a nice report; but reports don’t help you manage product service levels. We have customers who grew their gross margin over a million dollars from implementing our Lead Time Forecasting module; the ROI from effective Lead Time Forecasting is huge. While knowing when lead times change is important, most of you agree that how you use your lead time variance and fill rate (you are tracking lead time variance and fill rates right?) to improve your product/location service attained is the real goal in your supply chain
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A little Demand Forecasting Mistake that Cost a Retailer >$250,000

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A little Demand forecasting mistake costs retailers and wholesalers significant profits each year. While the mistake seems small, in reality, over the course of one year, the total dollars in lost profits will be significant. How? Demand forecasting impacts your largest asset, your inventory. Also, Demand Forecasting is an integral part of many of your business processes, poor processes cost you money. While the mistake may sound old and obvious, in reality, most businesses do not account for these and this provides you an opportunity over your competition.

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Seasonal Indexes Serve Up Lost Sales and Low Service

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Seasonal Indexes are a great tool that can be easily used to manage inventory and improve replenishment, allocations and new product releases. Seasonal Indexes used correctly result in sales growth and fewer out-of-stocks. Hello,Captain Obvious. The unfortunate truth is many of you fail to use seasonal indexes where you should today. The small group that does use seasonal indexes often fails to adjust the indexes when calendar events happen in different business fiscal weeks this year compared to the year the index was created. Last, Seasonal Indexes fail when you use the wrong math formula to create the seasonal index or you or your software use the wrong demand sales data to build the seasonal index. The results from these issues are out-of-stocks, lost sales and mis-spent inventory dollars. Read more

Little Known Leverage Strategies for Lost Sales Reductions – Part 3

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Leverage Your Lost Sales Data to Grow Profits

The key to successful Demand Driven retail is leveraging the right data in the right places. Lost Sales data has a lot of leverage that, when ignored, can be your demise; however, those that successfully measure and leverage Lost Sales data will see sales and profit gains. Our Lost Sales blog today outlines how lost sales data can be used to improve inventory optimization and highlights how all the pieces are interconnected. We also dive into the differences between lost opportunity and lost sales, the differences and impacts between the two, and close with some sobering statistics from Lost Sales data collected from the industry.

Our first blog on Lost Sales highlighted the staggering impact of Lost Sales in most businesses today. We outlined some of the methods used to calculate lost sales, and why these methods do not deliver value. Our second Lost Sales blog reviewed how lost sales can add value to demand forecasting and improve the accuracy and value for the service attained calculation.
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Truth, Lies, and Strategies for Lost Sales – Part 2

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Why Lost Sales are Ignored

Our last blog highlighted the staggering impact of Lost Sales in most businesses. We outlined some of the methods used to calculate lost sales, and why these methods do not deliver value. We touched on in-stock and Service Attained as two measures that in the past were acceptable inventory ROI measures but, in the market place today, these methods are dated and focus retail in the wrong direction.

With the advancement of inexpensive hardware, we can calculate a very accurate demand forecast across any block of products in our assortment and measure the business at any individual (or group of) product / locations. We can easily track available inventory for any product/location at a moment’s notice. This makes calculating lost sales a simple calculation: sum demand for the days where available inventory <=0. Today, we will review how lost sales impact demand forecasting, service attained, and inventory optimization.
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The 7 Most Frightening Lost Sales Facts – Part 1

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Companies Miss the Staggering Impact of their Lost Sales

Most companies are totally blind to the amount of lost sales they accumulate each year. Without a Lost Sales measure, a company loses significant opportunities to the competition in the forms of repeat business and gross margin dollars. The real impact of lost sales is often further hidden by the false securities of in-stock reports and service level measures that are based on fill rate.

How often do you review a lost sales report? Do you know how the lost sales are calculated and if they are accurate? Most legacy systems lack a true measure of ‘Lost Sales’ for the many reasons listed above. Many companies miss out due to the age of legacy software (often more than 5 years). The hardware cost to run product/location data even 5 years ago would prevent most companies from buying software that needed mega expensive hardware. Legacy software left out these types of calculations as the customer market that could afford to pay for mainframe hardware was extremely small.
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