There’s a good article in Teradata Magazine entitled “Assembling the data-driven supply chain.”  Among other good insights, the article features a case study on Cisco under a section entitled Consensus forecasts blend analytics and insiders’ insight. The article discusses how Cisco is leveraging powerful analytics to create better forecasts.  The new process has given the Cisco supply chain organization a complete, unit-level demand forecast for a two-year planning horizon, a more transparent work process and noticeable reductions in forecast error and bias.

This process is then married to a very robust demand management process that facilitates rapid demand-supply balancing.  In an environment like Cisco, where change is a constant, this is essential to keeping alignment – which ultimately drives higher customer satisfaction while mitigating supply chain costs.

The importance of the demand management process – of rapidly aligning demand and supply – is of increasing importance to every company we speak to.  Especially in this economic environment where volatility is so high and demand predictability is so low, the ability to rapidly align demand and supply is the key to success right now.

We’re seeing a growing emphasis in these capabilities both in the short and medium-term time horizons as companies struggle to deal with the unprecedented levels of uncertainty in their businesses.  As the article notes, the key to rapid response in these situations is to blend analytics and insider insight.  Analytics provide the sophisticated analysis of the current situation and an undersanding of the inter-relationships between demand and supply.  Analytics can instantly show you what an impact of a change in demand can have on supply, up and down the supply chain.  Insider insight is equally important, as most of the time misalignments require a tradeoff to be made.  Your people have the needed insight to know what real tolerance exists and can factor in the appropriate insights into the decision making process.  The combination of analytics and human insight are uniquely able to help you quickly realize the right course corrections to make for the business.

TrackBack • Digg This • Add to del.icio.us
Tags: Demand management, Supply chain
Posted in Demand management
You can leave a response, or trackback from your own site.