Part three of our blog series on improved supply chain demand planning using cognitive insights
Boosting your supply chain demand planning capability will allow you to improve the quality of your demand plan, quickly sense plan deviations, and effectively take action to get a grip on demand. But where to start? Many companies find it difficult to pinpoint the root causes limiting current performance, evaluate whether performance issues are related to the enrichment process, and how to prioritize improvement initiatives.
What you need is an objective assessment. This is one of the key steps of our cognitive insights approach to improve your forecast by nudging the planner to make better enrichment decisions:
- Create awareness
- Assess previously performed enrichments
- Activate planners in providing effective enrichments
- Automate predictable enrichments where possible
A clear overview and concrete action steps to improve your supply chain demand planning capability
We help customers by objectively assessing their current demand planning capability including the impact on supply planning and inventory management. The outcome of the assessment is a clear view of current strengths and weaknesses, identification of quick wins and a signed-off roadmap that describes concrete steps to improve the demand planning capability.
Depending on the needs of your company, the assessment can entail a number of components: a quantitative demand and forecasting benchmark based on a statistical data analysis, or a qualitative demand management review based on the actual state and interviews. You can find more details on the forecasting and demand planning assessment on our website.
The cognitive component in the forecasting and demand planning assessment
In our forecasting and demand planning assessment we focus on the cognitive component. We have a structured approach to assess where planners add value to the supply chain demand planning process. With our assessments, we leverage our dashboards focusing on cognitive insights using forecast performance metrics such as forecast value add. With these dashboards, we provide the planning community with insights into which enrichments were effective in the past and which did not lead to increased forecasting performance.
The following insights can be derived from the dashboards:
- What is the overall impact of the enrichments on the quality of the forecast;
- For which products the forecast deteriorates with enrichments;
- Where does Sales and/or Marketing improve the performance;
- Is there a structural bias under- or overshoot?
Our visualisations in PowerBi will turn the demand data into actionable insights that enable the full planning team to focus and take high quality decisions. By analysing past performance, the dashboards provide advice that can be used in the current demand planning cycle.
We focus on the following insights:
- Impact: We show the planning team the impact of the enrichments performed in previous cycles. We indicate how many products have been enriched, the impact on forecasting performance and the type of adjustments made (negative, positive or no enrichment). By providing these insights, the planning team is able to get insight into their past actions and the effect it has on forecasting performance.
- Ineffectiveness: By focusing on the top products, customers or regions, a planner can find out which groups’ forecast accuracy decreased, how many products where changed and what kind of changes were made. By showing the ineffective enrichments, we are able to bring focus in the enrichment process. These products shouldn’t have been enriched as the enrichments had a negative effect on forecasting performance.
- Classification: By using ABC / XYZ analysis, we determine where to focus enrichments on and what products to leave to statistical forecasting. For each of the ABC/XYZ categories, we show the impact on forecast accuracy. By highlighting this, we help the planning team to focus on the products that are difficult to forecast and need human attention.
Whether it’s during the assessment or as part of our planning service, we make sure to discuss together with your planning team how to use the insights on cognitive enrichment. This way we take your team along in how to make effective enrichments, enabling you to overcome human biases such as optimism in the planning process.
Read part four of this blog series where we talk about how decisional guidance can help planners make effective enrichments.